With the continuous growth of the information and communication technology (ICT) - business process outsourcing (BPO) sector of the country, the government is optimistic that it will reach the revenue target of $50 billion by 2016.
PH ICT-BPO Seen to Generate $50B in Revenues
During the recently concluded Cebu ICT and BPO Summit, ICT Office Executive Director Luis Casambre said with the current growth rate of the sector, the revenue target can be met easily. He added that the projected $50 billion will be able to provide more jobs for Filipinos.
Furthermore, Casambre said the BPO sector is the second largest revenue contributor last year, adding $10.9 billion to the country’s Gross National Product.
During the first year of the ICT Office as an attached agency of the Department of Science and Technology (DOST), it has managed to continue operations and implement projects. These include continuation of the E-government project, creation of a Cyber Security Program, as well as the continued development of industries related to ICT.
A study done by consultancy firm Forrester Research indicates that IT spending in Europe will decrease and possibly come to a standstill due to the weak economy and currency of the region.
IT spending to decrease as recession is imminent for some parts of Europe
Andrew Bartels, author of the report and Analyst at Forrester, said there is a possibility that recession is imminent for some parts of Europe. The worst thing that could happen would be the collapse of the euro currency. Bartels added that even if European officials exert additional effort to avert worst-case scenarios, it will be long before the region can recover and can only result to a 0.3 percent growth this year.
Moreover, he said IT leaders should base budgets according to the dull 2012 predictions, map out contingency plans in case of an economic emergency and collapse of the euro, and hope that all will be better in 2013.
Also in the report, technology is used differently in European countries, with regions like Greece, Italy, and other southern countries using less of it, in contrast to Denmark and Sweden.
PH BPO Roadmap Indicates Talent Shortage could Stunt Growth
The recent study commissioned by the Business Processing Association of the Philippines (BPAP) “IT-BPO Road Map 2011-2016” indicates that the country’s business process outsourcing (BPO) industry is capable of reaching $25-billion, employing 1.3 million Filipinos by 2016. This will be achieved only if the talent gap will be addressed.
BPAP President and CEO Benedict Hernandez, along with several analysts, said the country’s BPO industry can grow two-fold in the next five years. Moreover, the Philippines has surpassed India for voice-based services, and is catching up in key high-end areas as well. Hernandez noted that the number of current candidates now may not be enough come 2016 and that the sector should look into the matter closely, as this can affect the industry’s capability to reach the target.
The industry is growing rapidly and further developments are anticipated to rely on the country’s capacity to produce employable candidates. It directly employed 638,000 last year and was able to provide traditional to high-value services to international companies from delivery centers across the country.
BPAP is said to be working on several projects and is partnering with key government organizations, private institutions, and other companies to address the challenges. Their goal is to improve the talent line-up by tapping new talent pools, including near-hires, and developing their skills to increase the volume of credible applicants. Hernandez added that some of the candidates fail to make the cut in the BPO sector because they fall short on certain qualifications and expertise.
Data Privacy Law in the Philippines Backed by BPAP
Outsourcing industry body Business Processing Association of the Philippines (BPAP) supports the Data Privacy Act, stating that once it is approved by President Benigno Aquino III, it can help propel the IT-BPO sector.
The measure is believed to help the Philippines to be at par with other countries that are following international standards of data protection, said BPAP President and CEO Benedict Hernandez. He added that it will help promote the country as a mature business process outsourcing (BPO) destination for investors.
The act is patterned on the standards of the European Parliament and aligned with the Asia Pacific Economic Cooperation (APEC) Information Privacy Framework.
He also noted that the IT-BPO industry of the Philippines is maturing rapidly as it is now providing different services other than voice-based processes to a variety of segments. In fact, high end services now contribute 30 percent to the industry’s revenues. It is seen to help sustain growth for non-voice, high-end services.
In the annual Asia Pacific Property Awards held in Kuala Lumpur, Malaysia last April 27, SM Land’s TwoE-comCenter at the Mall of Asia Complex (MOAC) in Pasay City was named as the best office development for 2012. This was organized by UK-based organization International Property Awards Group.
The Asia Pacific Property Awards aims to identify the best in real estate development and professionals worldwide.
David Rafael, SM Land Senior Vice-president and Head of Commercial Properties Group, said they were honored to receive the award, and their clients push them for the best and reach for success. Rafael noted that with their latest five-star win, SM Land prides itself for helping the Philippines become known all over the world for developing commercial properties.
E-com buildings home to business process outsourcing operations
The E-com buildings are geared for business process outsourcing (BPO) operations, equipped with high-technology facilities, capabilities, and unique design features.
The designers of TwoE-com are Arquitectonica, a Miami-based international design firm, and FS Lim & Associates which is the local architect counterpart.
One of the delivery centers of MicroSourcing is at the 10th floor of TwoE-comCenter.
In a study on outsourcing trends done by advisory firm KPMG, more than half (52%) of the companies based in Asia, Europe, and North America capitalized on shared services in the last three months. The demand for other segments such as IT outsourcing (ITO) and business process outsourcing (BPO) have grown only 37% and 27%, respectively.
The report also states that IT, finance and accounting, and HR functions are the most commonly outsourced processes by the banking and healthcare sectors.
Shared Services or Traditional Outsourcing?
Samus Rae, Partner at KPMG’s shared services and advisory team, said the weak projections for BPO growth are parallel to the reduced demand for traditional, generic, and transaction-oriented outsourcing deals particularly for finance and accounting compared to non-traditional BPO.
Moreover, 68% of IT vendors are confident about their pipelines and the potential growth in the next three months. Meanwhile, half of the vendors anticipate growth in the demand for bundled packages such as business and IT services.
ICT-BPO Conference 2012
The ICT-BPO industry in Cebu does not have to focus solely on the US market when it comes to outsourcing opportunities. Jun Sa-a, chairman of the ICT-BPO Conference 2012, stated in a press conference that here are a lot of opportunities for the ICT-BPO industry, particularly the market prospects in nearby countries such as Australia and Singapore.
The ICT-BPO Conference 2012 is a two-day event that will be held on June 27-28 at Radisson Blu Hotel, Cebu City. Around eight ICT-BPO speakers from different countries such as Malaysia, Vietnam, China, Japan, Australia, Singapore, and Europe will join the summit and give lectures about opportunities in markets apart from the US.
Meanwhile, ICT-BPO Conference 2012 Vice-chairman Anthony Noel said they are considering markets that are nearer to the Philippines to take full advantage of the slight time differences for non-stop operations.