Philippine firms rate credibility as top vendor requirement

Enterprises seek IT suppliers able to guarantee completion of project without glitches, looking out for good track records and stable financial background.
Written by Melvin G. Calimag, Contributor

MANILA--When scouting for suppliers to implement IT projects, Philippine organizations still want--first and foremost--tech vendors with the credibility to guarantee it is able to finish a project without a hitch.

Analysts and local IT executives ZDNet Asia contacted said IT implementations are so crucial nowadays that an untested and dubious IT vendor can prove disastrous for one's investment and business.

"In a sense, you can subsume all other traits under 'credibility' since you cannot be credible without having a good track record and the financial standing to enter into an IT project," said Herman Gamboa, chief executive of IT vendor, Data Center Design Corporation (DCDC).

An IT veteran who is co-founder of computer school, STI, and former president of the Infocomm Technology Association of the Philippines (ITAP), Gamboa said an IT vendor's history is paramount and that any shenanigan it may have committed in its past dealings can put the company at a disadvantage.

Jubert Daniel Alberto, research manager at IDC Philippines, concurred, citing internal annual surveys which revealed that "past experience with a brand" had the greatest weight among local enterprises looking for an IT supplier.

"Organizations in the Philippines tend to favor products of the same brand due to familiarity and ease of use, especially as the Pinoys' concept of 'suki' (translated as favorite seller) also comes into play," Alberto said.

He said local companies tended to turn to IT vendors with which they had favorable experiences in the past. "Stronger patron-vendor relationship ensures reorders, either for replacement, upgrade or even a new project."

The IDC analyst said another consideration strongly linked with overall past experience with a brand is warranty, or service and after-sales support.

"It may be because a big chunk of companies in the Philippines do not have a large pool of dedicated IT staff, so companies put so much weight on an IT supplier's after-sales support, especially if it can deliver an efficient 'if and when required' kind of after-sales service," Alberto explained.

Other IT vendor selection criteria include lowest price, desired features and capabilities, and effective online support, he added,

Selection by reputation
Ultimately, however, it is the vendor's reputation that plays a significant role in its selection, he noted. According to IDC surveys, companies also look for first-hand information from other buyers who have experienced using a product or dealing with a vendor as a credible assessment.

This was validated by government-owned commercial bank, Land Bank of the Philippines (LBP), which said it consults with other companies for insights on "character reference" of a technology vendor.

Alan Bornas, senior vice president and head of the technology management group at LBP, said in a phone interview that all government projects also must pass through public bidding as required under the country's Republic Act 9184 or the Government Procurement Reform Act.

In the case of suppliers which previously had been involved in controversies in big-ticket government projects, Bornas said an IT company could still participate in the bidding process as long as it was not blacklisted and had passed certain eligibility requirements.

Ovum's chief IT analyst, Carter Lusher, said a reputable company's involvement in a previous controversy should not have any bearing or effect on its potential selection.

"All vendors get involved in controversy of one type or another," said Lusher. "By systematically gathering information on vendors and checking the current reputation, the risk of working with any vendor can be minimized... but never eliminated."

Even so, a fellow Ovum analyst said the selection of a vendor for IT project, sometimes, all boils down to credibility. Steve Hodgkinson, research director for the public sector, said: "While all organizations, particularly government agencies, have a range of formal assessment criteria that are used in a procurement exercise, the bottom line is trust.

"Can we trust the IT vendor to deliver what they promise, on time and on budget? Trustworthiness is a product of people, process and technology at a given price-point, so the assessment process needs to find practical ways to form a view of the vendor's capabilities from these three dimensions," Hodgkinson explained.

Telecom provider Globe Telecom, for its part, said it takes its role as a vendor seriously since its services can serve as the "lifeline" of a business or a government agency.

"Industry needs may be the same in other Asian markets, but may differ because of regulation," said Grace Jarin-Castillo, head for enterprise segments at Globe Business, which is a group within Globe Telecom that serves enterprises in the Philippines. "Thus, when we talk to them, we have to build credibility within our own market and use that as a success story or reference

The Philippine office of Taiwanese PC maker, Acer, meanwhile, said it works extensively with its local channels network when pitching for IT projects.

"We also always keep in mind certain values of the Filipino people which we try to incorporate in our branding campaigns," said Acer Philippine country manager, Manuel Wong. "For example, since Filipinos are very creative, we want to relay the message that our products and services will allow them to be creative."

Melvin G. Calimag is a freelance IT writer based in the Philippines.

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