Beyond call centers: Philippines ready to move up the value chain

Officials of the Information Technology and Business Process Association of the Philippines (IBPAP) explains the industry roadmap through 2016 during the International Outsourcing Summit held in Manila.

With $13 billion in revenues last year, the Philippine IT-Business Process Outsourcing (BPO) industry is ready to move up the value chain, eyeing a huge jump in revenue to $25 billion by 2016, and employing 1.8 million people.

Officials of the Information Technology and Business Process Association of the Philippines (IBPAP) said at the recently concluded International Outsourcing Summit that they are looking at high-value services such as financial services, healthcare, applications and software development, animation, game development an IT services as the next driving force of the industry.

“It is time for us to lead through new views and new ideas,” Jose Mari Mercado, President and Chief Executive Officer, IBPAP.

Currently, the local IT-BPO industry is still dominated by voice or call center services. As the country actually started with customer relations management (CRM) services, it’s current pool of 500,000 employees in the sector brings in over $8 billion in revenue an the largest in the world.

However, the move to offer other services has been started years ago to complement existing competencies and leverage on the capacity of the Filipino knowledge workers to other kinds of services.

Danilo Sebastian Reyes, Chairman, IBPAP, said part of the initiatives of the government is to look at new markets for the country to become a full service IT-BPO hub.

The 2013 International Outsourcing Summit held in Manila attracted participants from 14 countries around the world, which IBPAP officials said is proof of the interest of global players in the Philippines as an outsourcing destination.

“The government continues to create the conditions that will further bolster our human capital through structural reforms. The government is also very active in developing ecosystem for this industry,” said Monchito Ibrahim, Deputy Executive Director, ICTO-DOST.

The push is more robust now, he said, as the Association of Southeast Asian Nations (ASEAN) is preparing for the launch of the ASEAN Community 2015.

As early as five years ago, he said an agreement was forged among ICT Ministers of the 10 member countries to help market the region as an IT-BPO hub and the Philippines is taking the lead in the initiative.

“Instead of competing with one another, we will actually be collaborating w taking the lead in marketing ASEAN as one IT-BPO hub.

Gillian Virata, Senior Executive Director, IBPAP, sees the summit as a significant step not only for the Philippines but also for the ASEAN to explore opportunities in the IT-BPO sector.

“The global market for IT-BPO is huge. There is enough for all players trying to participate in the market. Even in such a highly-competitive in the industry, the Philippines is very well positioned to find a niche,” she said.

Ibrahim emphasized that the government is aware of these opportunities and developments in the industry and one of its goals is inclusive growth.

Currently, he said 73 percent of IT-BPO workers are in Metro Manila. However, by 2016 the President wants to see a 60-40 percent ratio of IT-BPO workers’ distribution in Metro Manila and the provinces.

This means approximately 520,000 call centers employees in the countryside by 2016, according to Ibrahim.

The current move of the education department to add two more years to basic education and make it on par with the rest of the world is a significant step in this inclusive growth initiative.

Under the new curriculum, high school graduates of the new K-12 program will be able to acquire the basic competencies needed to qualify entry to some of the IT-BPO jobs in the market. This is being complemented by strengthening the curriculum of colleges and universities and creating programs most useful to industries, including analytics and finance.

Mercado noted that the country produces approximately half a million graduates per year and this talent pool is a big competitive advantage for the Philippines, given the current and future demand for knowledge workers.

“We just need to make sure that they have the right skills,” he said. –Eden Estopace, http://enterpriseinnovation.net/article/beyond-call-centers-philippines-ready-move-value-chain-1207999699