Thailand has set an ambitious target to become one of the world's top three countries for outsourcing by 2013, building a 4-billion-baht industry and forming an outsourcing association.
The kingdom's potential to capture opportunities as an attractive international IT outsourcing destination has led the driving industries to form the Thai IT Outsourcing Association, or TITO, said association chairman Steven Kalayanamit. The association is comprised of 10 pioneering international outsourcing companies.
According to a recent study,"Global Services Location Index 2009" by AT Kearney, Thailand ranks number four worldwide for locating outsourcing activities, including IT services and support, contact centers and back-office support, following India, China and Malaysia, which have retained the top three spots since 2004. However, Steven believes that unifying IT outsourcing companies into "One Nation, One Com-pany" and offering unique, specialised skills will help Thailand surpass Malaysia at in number three by 2013.
Currently, there is no formal figure to show the scale of IT outsourcing in Thailand but rough estimates suggest a range of 800 million to 1.5 billon baht,with an average project value of 300 million baht. Within the next two years,the market should reach 4-5 billion baht.
"Thailand's attributes lie in its high talent level and good resources within a friendly business environment ,but there is still a need to boost confidence and awareness among the target market."
He added that "Within the next three months, the association will launch a web portal to facilitate searches and business matching by using short video clips to introduce each members including business matching."
There is a great demand for outsourcing in the world market, with the industry expected to be worth $1.4 trillion (47 trillion baht) by the end of this year.
Therefore there is no need to focus on generating new business, so the association is seeking to promote Thailand's capabilities and high valuefor-money to the existing market.
In the short term, Thailand can start with animation and digital content outsourcing, which fits in with Thailand's creativity profile, and others fields such as database management outsourcing services, accounting business process outsourcing and COBOL programming and development outsourcing.
In the long term, intelligent business outsourcing is an interesting area because there is a growing demand for customisation in this field, but it takes time to train new skill resources.
Hintendra Patil, Chief Operating Officer of Saraff Infotech, an accounting and taxing business outsourcing service located in Bangkok, said joining this association will help the company find more new customers and local subcontracting partners for its services to the US market.
"Thailand may not be the cheapest cost location but the accuracy and quality of services here help us to be competitive. However, high speed bandwidth and reasonable costs are important issues to address to strengthen Thailand's outsourcing capabilities because it is critical to the infrastructure of outsourcing services," he said.
Software Industry Promotion Agency (Sipa) director Rungreung Limshoopati-pha added that Thailand has flexibility and creativity as outstanding points in its outsourcing portfolio , along with the Government's policy to build a creative economy through its "Creative Thailand" strategy.
The government can play a role in facilitating business matching with international customers to increase confidence in outsourcing providers and setting standards or a methodology for outsourcing contracts.
This year has seen a lot of success for Thailand in the outsourcing field, with contracts ranging from accounting business processes,TV animation series and biometric-related services to medicalrelated services generating business worth more than 1 billion baht
An emerging service is COBOL programming outsourcing for the banking in Europe market, which, while still in need of maintenance, can boast a skills resource in Thailand of some 1,000 professionals.
"Over the next three to six months,Sipa will support the retraining of 200 COBOL developers.
"This should help to convince foreign investors to consider basing their outsourcing operations in Thailand," Rungreung concluded.
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