BPM companies told English fluency ‘won’t make the cut anymore’

By Krista A. M. Montealegre, Businessworld, Nov 8, 2017

THE Philippines is putting a brave face in the fight to preserve its place among the world’s top outsourcing destinations, as it looks at an uncertain future due to automation and artificial intelligence (AI).

The International IT and Business Process Management (IT-BPM) Summit in Makati City on Tuesday marked the launch of a new country brand and narrative — The Philippines:Innovative Human+Tech — that will showcase the synergy between world-class Filipino talent and technology breathing life into augmented intelligence.

“Combined, that’s a unique value proposition that will simply be a game-changer,” said Rey E. Untal, president and chief executive officer of the IT and Business Process Association of the Philippines.

“If we are able to increase amount of productivity of the Filipino talent, with all the traits and attributes that are so positive, then who can compete with us?”

AI will cost the IT-BPM sector, one of the strongest legs of the Philippine economy, some 40,000-50,000 low-skill jobs, Mr. Untal said.

The industry is projecting revenues of $38.9 billion by 2022 when its work force will hit 1.8 million.

The Contact Center Association of the Philippines is “recalibrating” the initiatives in its own road map that will take into account the latest development in AI, its president, Jojo J. Uligan, said.

In the past several years, the IT-BPM sector has relied on the Filipino talent’s inherent strength of providing unparalleled customer experience to lure locators here.

FINDING OPPORTUNITIES

With the game shifting to technology, IBPAP believes the Philippines can find opportunities for growth even if China and India lead the innovation race.

“The global business is so big that it gives us a lot of addressable market to play into and that lot is not going to be immediately susceptible to advances in technology,” Mr. Untal said.

Competition has caught up with the Philippines, which fell to the third spot in the Tholons Services Globalization Index 2017, after China rose to second place behind India.

To stay competitive, IBPAP Board of Trustees Vice-Chairperson Catherine Salceda-Ileto stressed the importance of embarking on an innovation pivot as well as re-skilling and up-skilling the work force.

“Fluency in English won’t make the cut anymore. The future is skills that are highly specialized,” Ms. Salceda-Ileto said.

The IBPAP has formed a “Skills of the Future Task Force” — a high impact program in partnership with the academe that will identify the jobs of the future, demystify the career path in the industry, implement company-specific and industry-wide efforts to up-skill the work force and prepare graduates for the jobs of the future.

While some jobs may become obsolete and the remaining work will require higher order skills, Eric Simonson, managing partner of research at consulting firm Everest Group, said AI will also create new jobs and value chains due to changes in cost structures, speed, quality and flexibility.

“Power comes from integration of these technologies. It is not wholesale replacement. As technology changes, the roles of humans change,” Mr. Simonson said.

Businesses that can successfully integrate AI could increase profitability by an average of 38% by 2035, translating to an economic boost of $14 trillion in additional gross value added across 16 industries in 12 developed economies, according to a report from Accenture presented in the forum.

Of the industries studied, information and communication, manufacturing and financial services are the three sectors that will see the highest annual gross value added growth rates in an AI scenario.

AI may be at the nascent stage but the pace of development has accelerated. The ultimate question is if the market is ready for it.

“Cars came in but the horses didn’t vanish overnight…” said Rajneesh Tiwary, chief delivery officer at Sutherland.

“It’s not yet economically viable. Our jobs are being impacted, but it’s going to take a while before we start seeing jobs being eliminated.”

Aside from the AI wave, perception is one of the major challenges of the industry, with stakeholders urging the government to help the IT-BPM industry in its aggressive marketing campaign to “change the narrative” to encourage global investors to come here.

“Perception is everything. It is even more important than reality,” IBPAP’s Ms. Salceda-Ileto said.