Government steps up for Philippine IT-BPO

Michael Alan Hamlin

Posted on October 28, 2011

IT-BPO industry executives and the consultant that led the development of the Philippines IT-BPO Road Map 2011-2016 say the Philippines’ IT-BPO industry got a major boost with President Benigno Aquino’s approval of a P500-million fund for the Technical Education and Skills Development Authority (TESDA). The funding will provide short-term training for “near-hire” applicants who require remedial training.

But why does the fast-growing IT-BPO industry need help from government? According to Alfredo I. Ayala, who is chairman of the Business Processing Association of the Philippines and president of IT-BPO holding company LiveIT, the private sector is doing its part by investing in the Philippines, creating jobs, and increasing demand for talent. Government’s role is to ensure the talent pool. Short term, that means remedial training.

“Ensuring a qualified labor supply is the number one task for the industry,” Everest Group managing consultant for India Gaurav Gupta said following Mr. Aquino’s announcement. The funding approved by the president will provide remedial training for the voice, software development, animation, and health care services sectors. Aquino announced his approval of the special training fund during the 3rd International Outsourcing Summit (IOS).

The Philippines, considered the “rock” of global IT-BPO after analysts ranked it first in global voice services last year, shows great potential to become the next leader in the growing non-voice, complex services sector, according to Summit delegates. The IOS is considered by many to be an indicator of the country’s success and influence. The annual event attracted hundreds of the world’s top IT-BPO executives.

“The Filipino knowledge worker is internationally recognized as world-class, and we are now universally recognized as number one in the world in voice services. Our big opportunity is leveraging this success to become the number one destination for IT-BPO in general, especially in important segments of non-voice services such as finance, accounting, legal, health care, creative, engineering, and targeted IT areas,” Mr. Ayala says.

According to Mr. Ayala, global demand for high-quality Filipino talent could increase industry generated jobs from 1.8 million in 2010 to 4.5 million in 2016; of those, 30% are direct jobs in the industry, and 70% in indirect jobs. “We have assumed that each direct job of the industry generates 2.5 indirect jobs such as construction and restaurant workers, whereas other countries assume a ratio of 3:1 or greater,” he explains.

“The administration’s strong support in helping the industry address HR supply is very much appreciated by BPAP and its members. The funding will have a dramatic impact not just on the industry but the Filipino people as well as it will generate tens of thousands of jobs,” he said.

Over 400 delegates and speakers attended the summit and Aquino’s keynote address. Delegates remarked that the high number of international delegates demonstrated the Philippines’ dominant position in the industry, and its impact on the development of global IT-BPO. The summit was organized around discussions on emerging markets, increasing sophistication of the industry, and addressing HR requirements.

Other discussions focused on growth and development potential and new sources of revenue generated by increased levels of fundamental innovation or research and development taken on by services providers. Panelists and delegates alike seemed to agree that non-voice, complex services will be the primary engine of growth for the industry, and the skill sets required to fill these jobs are increasingly sophisticated.

“The summit’s role is to bring together industry players around the world, share our expertise to assist other global IT-BPO centers, and keep us on track to meet our goals,” BPAP senior executive director Gigi Virata said.

“This year’s summit provided a very nice mix of end customers and services providers–a very healthy mix. Various countries were well-represented; there were delegates and speakers not only from the Philippines, India, and the US, but also IT-BPO leaders from Russia and Jordan among others. This clearly demonstrates that the Philippines has become a very credible BPO destination for the world to take note of,” Aegis Global Managing Director and Global CEO Aparup Sengupta said.

“BPAP has done a great job of bringing together people from all over the world, not just the industry here in the Philippines, to compare notes to really get at the substance of some of the issues, and that breath of dialogue is refreshing,” Yahoo! Executive Vice President and Chief Customer Officer Jeff Russakow said. (Disclosure: My firm is engaged by BPAP to organize IOS).

“The summit ended on a high note with President Aquino’s good news. We hope to have an even greater level of success at the next summit and to bring in more support for our industry partners as well,” BPAP executive director for Industry Affairs Raymond Lacdao said. With that outcome in mind, planning for next year’s Summit, which will take place October 8-10, 2012 is already underway according to Mr. Lacdao.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn. Copyright © 2011 Michael Alan Hamlin. All Rights Reserved.)

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