Global Training Center for IT and Health
- Pages: 17
- Word count: 4165
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The project is the establishment of Global Training Center for IT and Health in Cebu, Philippines. It is a tertiary educational institution and training center. It will address the growing tertiary education market segment on information technology and the increasing industry and business needs of computer literate business professionals in the world and provide practical training in practical nursing and care giving to address the demand for the growing market for health care workers around the globe especially in leading first world nations.
The product development and market penetration strategy will offer value-added innovation through modular courses leading to Associate degree and to Bachelor’s degree programs and specialized training-seminars designed for faculty and professionals. The training center will establish strong linkages and affiliations with leading IT training and health training providers in the USA to boost its educational service and to abreast curriculum and practice to international standards. The training center will also link with international business institutions, hospitals and health providers all over the world for the deployment or employment of its graduates.
Why the Philippines?
The Philippines is a leading source of cheap but highly skilled workers in information technology and healthcare in the world. An estimated ten million Filipinos are deployed in practically all corners of the world. In the US alone, Filipinos constitute the second biggest ethnical minority among Asian Americans estimated at 2.8 million. The potential for creating and developing more skilled workers in the IT and health industries for global employment remains high. What is needed is a training institution that can provide the critical training program and education at par with world standards in order to tap the potentials and bring them to fruition so as to provide the health and IT sectors around the world with continued supply of needed skilled workers.
Most Filipinos are well-versed in the English language. (Levinson, 1998) Considering the English is language for international business transactions, this will help facilitate easy communication and training of students as well as communication with potential employers. The country is also predominantly a Christian country, thus, the people exhibit strong moral and ethical values that most likely parallel to most western countries. Finally, the Filipinos are most easily adaptable to different cultures especially the western culture and are able to easily integrate with different countries because of their multicultural background. While they may be geographically located in East Asia, the Philippines’ major influences come from the West particularly Spain, Mexico and the United States. It is the East meets West kind of thing. This remarkable trait perhaps made their race easily adaptable to practically in most countries.
Economic Profile. The education industry in the Manila, the capital of the Philippines is already saturated. Cebu on the other hand, ranks second to its capital as a leading economic center in the country. It is the second largest city and fastest growing economy in the Philippines. It is located in Region 7 or Central Visayas. Cebu is the gateway and economic hub of the Central and Southern Philippines where 90% of Inter-island shipping companies are based. It has 3 Industrial Estates MEPZ, WCIP and Naga Township. Cebu is the second most populated province in the Philippines and has an average annual growth rate of 3.07%. Cebu was chose because of it is second most economically stable region in the country and its high population growth shows a high potential for enrollment for the proposed training center. Moreover, infrastructure development is balance, it basically has all the important components to be competitive and sustain investments.
Tertiary Education Profile. Cebu is the education and training center in the Visayas and Mindanao. The presence of some of the country’s outstanding education and training institutions in the Region plus the advent of fast sea crafts that made these institutions more accessible helps the region to cater the education needs of students from the Visayas and Mindanao. Cebu is envisioned to become a knowledge center in Asia. The quality of education offered by these academic institutions will encourage more investments in the sector, thus propelling its growth.
Target Market. The target market of the Global Training Center for IT and Health are the immediate high school graduates in Cebu, the whole region as well as Visayas and Mindanao in the Philippines, because Cebu prides itself as the economic center for the southern part of the Philippines. Because population continuously grows, it is expected that more high school students are able to graduate which will provide the Center a steady growth of market potential as well. Moreover, because the prospect for going abroad is very attractive to all Filipino citizens, the market can expand to include graduates and professionals who want to improve or learn new skills that is in demand abroad particularly in information technology and the health industry.
Competition. As of AY 2002-2003, there are 119 Higher Educational Institutions (HEI’s) in Region 7 (Cebu Region) of which 79.8% (95) are private and 63% (75) are in Cebu. In Cebu, of the 75 HEI’s, 63 are private and 38 are in Cebu City. According to CHED, 5 new HEI’s will be established for AY 2003-2004. The educational industry is highly concentrated in Cebu and mostly run as private institutions.
Higher Educational Institutions in Region VII (Central Visayas)
|Region 7||Cebu||The rest|
Competition to the Global Training Center will principally come from the 6 biggest universities in the region with the biggest tertiary enrollment. This means that they take the biggest bite among the high school graduates which is the Center’s primary potential market. These six universities are as follows: University of San Carlos, University of San Jose-Recolletos, Southwestern University, University of Cebu, University of Visayas and Cebu Institute of Technology (CIT). Incidentally, CIT has been recently recognized by the Commission on Higher Education as Center of Excellence in Information Technology. (CHED memo no 32, S 2007) These 6 Universities, which are all located in Cebu City account for almost 50% of the total tertiary enrollment in Region 7. University of Cebu has the highest enrollment, which is twice as much as the following HEI, University of San Carlos then University of Visayas. It also has the highest student population. Total freshmen enrollment for the 6 schools in AY 2002-2003 increased from 29,328 to 30,020.
Tuition fees. Tuition fees in the selected universities slightly vary by academic program. Among the top 6 universities, San Carlos University is the most expensive followed by University of San Jose Recolletos. The University of Cebu, which has the highest enrollment, charges an amount that is relatively balanced between the highest and lowest TF charges. This strategy allows it to cater both the upper and lower economic class of students. Incidentally, the 3 small schools that charge relatively higher tuition fee rates than the big universities are IT schools namely: AMA, STI and ACST. Data on tuition fee is important because the Center will based its tuition fee rate on existing rates.
Payment scheme. A semester in most HEIs in Cebu is divided into 4 exams, each of which has a corresponding payment of fees. Some Universities like the University of Cebu charges a very low down payment for registration. There exist installment options of paying fees. Full payment of fees often entitles student to a discount. These payment schemes will be used by Global Training center to adapt to the culture and trend to which its target market is used to. Incidentally, this is reflected in the presence of receivables in its computation of financial statements.
New schools/ Competitors. 28 new HEIs were established in Region 7 since 1991 of which 17 are in Cebu. This shows the high potential of enrollment in the region that’s why it continually attracts new educational business investments in the region. Hereunder are some of the schools that were recently establish: Saint Paul College Foundation, Inc. – Ramos (2002), University of Cebu – Banilad (2002), ABE International College of Business and Economics –Cebu, Benedicto College (2000), Northeastern Cebu Colleges (2000), Saint Paul College Foundation, Inc.-Mandaue (2000), and AMA Computer College Dumaguete (2000), etc. Most of this HEI’s are private non-stock corporations. Among the new schools, University of Cebu- Banilad generated the highest enrollment. AMA Computer College is the 3rd highest enrollment (313) despite its high tuition fee rate. It must be noted that these two schools specialized in information technology training.
Competitive Marketing Strategy
Product Innovations in Information Technology. The Global Training Center will offer courses that will integrate information technology with business and accountancy such as E-Business with Web Technology, Technopreneurship, E-Finance and E-Marketing. These are modular associate degree programs that can lead to bachelor degree programs as follows: BS in Computer Accounting and Management, BS in Office Administration Computer Systems and Office Management and BSBA Computer Management. It will also provide basic and advance computer training in Project Management, Systems Analysis, Design, Development, Implementation and Evaluation, Software Engineering, Expert Systems, Development of high end software packages used in the business industry
Robotics and Mechatronics. One of the Center’s future plans in line with its futuristic orientation is the inclusion of the latest modern technological advancement that is seen to drive human development to the future. This is robotics and mechatronics, which involves the scientific study, control, and invention of systems that integrate machine, electronics, and computer technology to create robots. A robot is basically a mechanical creature that function and operates using artificial intelligence which permits it to execute tasks within a human’s control and direction.
Product Innovations in Healthcare. Global Training Center will offer practical healthcare courses such as caregiving, practical nursing, and hospital technology. Because the training is designed for global employment, language and cultural training will be included in the program. The language and cultural training will be designed to the specific country to which there is current demand of healthcare workers. For instance, the current demand for healthcare workers in Japan would entail language training in Nihongo and the Japanese culture.
General Education. Information technology will be applied in all courses extensively. Modular approaches on all courses that can be terminal or a continuing program leading to a certificate or Bachelor’s degree will be implemented. Hence, such courses may be used for training professionals as well, who are in need of a specific skill to develop.
E-learning. Information technology will be integrated intensively in the education and instruction of students. Electronic communication has become an important enhancement to university classes. The Internet provided info-structures that serve as channels by which class discussion can be facilitated. The Center’s website will serve not only as its window to the virtual world but as serve as Virtual Learning Environment System (VLES) that will provide the framework through which e-learning will be implemented. A virtual learning system will facilitate interactions between students and teachers which include email, monitoring procedures for student learning progress, video tele-conferencing, forum for discussion and other online methods for communicating support and feedback among the students and teachers.
The integration of information technology in the educational system of the Center will serve as a demonstration or physical evidence of the advance educational instruction adopted by the school. The key features of this virtual learning system include the following:
- Computer-mediated classrooms: Aside from the traditional student and faculty face to face interaction and exchange, communication mediated by a computer technology via the Internet will be used through email, conferencing, etc. This will specially apply in instances when guest lecturers abroad are not available to visit the center. Their lectures can be facilitated via video-teleconferencing.
- Asynchronous communication: Teachers and students can exchange information (feedback) not in real time via email, forum, Ipod, and cellphone. The two latter technologies refer to mobile learning. Although real time communication can be established through chat, the disparities in the availability of the parties involved (i.e. students and teacher) would make it hard to arrange a common schedule.
- Online student services: Programs in the Center’s website will incorporate different forms of student services such as advising, counseling, accessing the library or downloading reference materials. In this way, students are empowered to communicate with their instructors whenever they need them for consultation.
Linkages: A critical product innovation of Global Training Center will be its strategic alliances with business/ industry, ICTC organizations, hospitals and recruitment agencies from abroad. Alliances with business and industry will help customize its programs to that which the industry currently needs. Affiliations with ICTC organizations (i.e. Microsoft, Cisco, etc) will provide the center with the necessary IT expertise and certification for global recognition of its graduates. Alliances with hospitals and other health centers will provide our health students with the opportunity for hands on practicum of their skills. Finally, partnerships with recruitment and other employment agencies will help bridge that gap of enrollment to employment opportunities. This will align our graduates to a ready market for their skills.
Certification. The Center will work with accredited institutions that provide certification of excellence and qualification. For instance, it will collaborate with Microsoft to avail of “Microsoft Certified Professional” title for its selected graduates.
Others. The Global Training Center for IT and Health needs to achieve the following to its viability and competitiveness:
- Lean organization, which minimizes overheads.
- Highly motivated, dedicated and competent faculty/ trainers. Specialized trainers will be invited to teach in the center.
- Periodic appraisal and continuing development of faculty.
- Full utilization of information technology. Computer Laboratories with state of art facilities will be provided.
- Affiliation with local hospitals for its health training center for collaborative hands on practicum for its students.
- Aggressive marketing strategy to inform all concerned about the existence of the Global Training Center e.g. website development, mobile marketing (SMS), creation of brochures and school to school visit.
Objectives, Mission/ Vision and Philosophy: The Center supports a credo and vision of providing high quality education of international standards to produce high quality skilled workers for global deployment while providing a fair return on stockholders’ investment.
The Global Training Center is dedicated to the development of its students as leaders. It aims to graduate vibrant and vigorous workers who are physically, intellectually and socially committed to achieve the premier quality of life. It will generate workers and leaders who excellently value the qualities of extending help to others across the world as vital ingredients to globalization building. The institution shall emerge as a premier learning center in southern Philippines which will hopefully spearhead a series of Training Centers to be established in other labor providing nations. More than just a training center, it shall take the role of a catalyst for human development in order to create a well rounded person. The Global Training Center believes that the successful integration of nations or globalization can be fostered through quality of the education and cooperation of the citizens of the world.
Global Training Center will advertise itself “a sure key to employment abroad”. Students who enroll in the Center are good as hired employees of the Center’s affiliates abroad. Hence, strategic alliances with business and industry and employment agencies are very critical. In the long run, the Center will act as a training center for its affiliates abroad who are looking for potential employees. The Training Center thus, will provide customized training services for these affiliates which will save them further costs of training at the same time supply them with the right qualified personnel they need for their operations.
Local Advertising. An aggressive marketing campaign for generating enrollment will be pursued in the region. School to school visit will be conducted in identified schools. Foreign correspondents will be used as speakers to create an impact among the locals. Scholarships and grants will also be provided for deserving students who do have the potential for making it “big” abroad.
Strategic Alliances. Alliances with business and industry will be aggressively pursued on a perpetual basis. It is important that the center creates a big network of potential employers for its students. Partnerships are also vital for providing the Center with the important expertise, mileage and international personality or character that school wants to project.
Web Advertising. With the advent of the virtual world however, the Internet, has become a new channel for conducting business. A company website is the most efficient and effective way to reach out the world.
Equity Participation. The project will require an investment of P23,205,000 over a period of two years, representing 100% share of project.
|Amount (000s) in Philippine Pesos||Phasing|
|Yr. 0||Yr. 1|
|Library Facilities (Books)||3,000|
|Total capital Expenditure||20,500|
|Other Commitments:(Working Capital)|
|Faculty training loan||128|
The project is profitable, providing stockholders a real-term earning power (RETP) as high as 26% way above the industry standards of 12% – minimum acceptable rate of return. Payback period is over three but less than five years (3.88years). Acceptable minimum rate of return is 12% (assumed industry standards), at 12% the project has a positive Net Present Value (NPV) amounting to P13.5M. At base case profitability, RTEP is at 26+%. Notice that using the minimum rate of return (industry rates) of 12% and using its potential earning power rate (26%), the project can already generate a positive cash flow in its second year of operations.
Base Case Assumptions
The base case assumptions for the project follow a conservative approach to allow for risks and in consideration of the financial/ economic crisis during the five-year plan. For simplicity of computations the following base case assumptions were used:
Enrollment is projected to increase as the Center takes a bigger bite of the market share of high school graduates in the region estimated at 2% on the first year, 4% in the second, 6% in the third year of operations and 8% for coming operations. Tuition fee rate was based on average industry standards increasing by 5% yearly. The Commission on Higher Education in the Philippines allows a 10% annual increase of tuition fees. For a conservative estimate, miscellaneous fees were not increased for the first five years. Increases in miscellaneous fees do not require consultation from students or any approval from government regulating agencies. Academic and Administrative Cost which pertains to the salaries of personnel or overhead is estimated to have a 3% annual increase. Faculty cost increases per year because of increase in the number of enrollees which in turn require hiring additional faculty and annual increases in faculty rates.
Projected Cash Flow and Income Statement
Alternatives Considered: Competitive strategy formulation matrix was used to have a balanced assessment of the upsides and downsides of the project including the external and internal assessment. There are three (3) options available: Acquisition of existing educational institution in Cebu, collaboration with an existing educational institution in Cebu or the establishment of a new school. The evaluation of the financial implication of the first two options is outside the scope of the study. The establishment of a new school is the most acceptable option based on a competitive strategy assessment, shown below:
In the establishment of the Global Training Center for IT and Health, two (2) options are available namely: Construct own building or Rent a Building
Rent a building is more acceptable because the payback period is more than 3 years but less than 5 years and at 12%, the NPV is P13.9M. Due to financial constraints and high risk involved in the fist option especially considering the global economic crisis, constructing ones own building is not a viable option whose financial implications are not considered in the study.
Risk and Robustness. The project’s viability was computed based on projected cash flows. The base case profitability and sensitivity analyses confirmed the robustness of the proposal. For simplicity of computations sensitivity factors only considered an increase or decrease of investment. A 10% decrease in investment yielded a 4% increase in internal rate of return or 30% while a 10% increase in investment yielded a 3% decrease of internal rate of return of 23%.
General and Administration. Manpower requirements are set to achieve a lean organization to minimize overheads and assume to increase over the years depending on total enrollment. The proponent of this project (I) will serve as the President and CEO of the corporation.
Below is the suggested chart for the very lean organization of the Center
Faculty: Fulltime and Part time. Highly motivated and competent faculty with Master’s degree and/ or equivalent experience in business and industry will be hired. Full time faculty shall be paid on a monthly basis. Part time faculty shall be categorized as lecturer will come from business and industry with which the Center has established alliances. Faculty rating will be based on points earned (which are results oriented) during the year. Rates will be based solely on individual competence and experience. Special trainers from international affiliates and partners (e.g. Microsoft and Cisco for IT training) will be invited to conduct short terms seminar and workshops.
Proper and intensive training will be conducted to all staff and personnel in order to ensure that they render service that is at par with the quality service that the Center will provide. All personnel should manifest unparalleled commitment, passion and knowledge for education. Every staff in the Center will be a reflection of excellence.
The President and CEO (the proponent) is the key player to the success of the project. He is primarily tasked to establish the strategic alliances with “yet to be identified business organizations” from among which he will also solicit or source funds for the financing the project. At the moment this affiliates include Microsoft, Cisco, and local hospitals in the region. From these affiliates will basically form the incorporators and stockholders of the Center. In the operations per se, the President and CEO might simply act as a figurehead of the organization. The bulk of the school operations will be designated to the academic heads and administrative heads of the Center.
Trainers and faculty including special lecturers that will come from abroad also plays a critical role in the provision of quality training and education in the Center. Practicing experts from business affiliates (including IT companies and Hospitals) will be invited to act as resource training guests. Curriculum to be adopted by the Center will follow international standards that will be modified and customized to meet local regulatory policies on education.
Educational institutions continue to thrive to address the growing need for education and continuing education in the globalizing economy marked by a rapid exchange of people and culture between nations and economies and by rampant technological changes. Education is necessary for the successful integration and operation between economies with cross cultural backgrounds, language barriers and different economic systems. On the other hand, continuing education allows professionals to equip themselves with new skills demanded by modern society as well as to keep them abreast with trends. Education had always been deemed as the key to reap the benefits and opportunities of globalization as well as to survive in the tightening competition.
Under these premises, the Global Training Center for IT and Health was conceptualized to bridge the gap of supply and demand. It was meant to provide the globalizing economy with their needed skilled workers which will benefit not only the industry but will provide employment to countries whose main export is manpower. The Global Training Center will ensure that academic institutions in labor providing countries will match the skills required by their employers abroad. And this can be done by establishing a close linkage between what employers need and what employees have. The Global Training Center will provide the necessary expertise and skills that is required by the business and industries abroad by directly consulting and collaborating with them. In the meantime, it also helps in providing the much needed employment that labor providers like the Philippines can supply, which keep their economies afloat.
Levinson, D. (1998). Ethnic groups worldwide: a ready reference handbook. Greenwood Publishing Group
www.ched.gov.ph. All materials pertaining to Higher Educational Institutions are downloaded from this site.
www.deped.gov.ph. All materials pertaining to Secondary (high school) institutions are downloaded from this site.