Information technology outsourcing (ITO), which involves more complex and higher level outsourcing work, is expected to boom in the next few years and may eventually catch up, if not surpass, its more popular sibling BPO (business process outsourcing), which refers largely to call center operations.
This is according to ICT players, as well as the government who noted that the country’s gradual shift from BPO to ITO is a good indication of the industry’s growth path.
This is the same direction, observers said, that outsourcing colossus India has treaded in the past. Although India has been eclipsed by the Philippines as the “call center capital of the world”, the sub-continent is still regarded as the largest destination for higher value IT outsourcing.
For instance, outsourcing firm arvato said it inaugurated its new facility in Libis, Quezon City on Tuesday to accommodate the growth of IT outsourcing, which has outpaced its voice business.
For the Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO), it sees the country’s IT outsourcing doubling its global market share by 2016.
“We are currently one of the lowest cost destinations for IT outsourcing. Combined with the extensive IT work experience of our workforce, the wide variety of IT skills available and a growing global branding rivaling that of our doctors and nurses, we have the tools and the talent to be a major player in IT outsourcing,” said Alejandro Melchor III, deputy executive director for industry development of the ICTO during a recent membership meeting of the Philippine Software Industry Association (PSIA).
Next to China and India, the Philippines has the third largest annual supply of technical talent for IT in the Asia Pacific region. The country has also consistently ranked number one in the availability of knowledge-based workers worldwide, based on surveys done by US research firm Meta Group.
Melchor said ITO is being driven by converging global megatrends such as the growth of the knowledge economy and the global technology revolution.
DOST Secretary Mario G. Montejo has also cited the local ITO industry as one of the star performers of the past year. He noted joint industry-government statistics showing that the sector grew by 37 percent in 2011, generating around 50,000 full time employees and generating almost $1 billion in revenues.
He added that Filipino IT workers have a wide range of skill sets that include software development, programming, mobile platform expertise, mainframe skills and database platform proficiency.
ICTO chief Louis N. Casambre said the Philippines is on trach to achieve its goal in the next three years. “[With out] current momentum, we are confident that we can double our market share in ITO by 2016. Through ICT Public Private Partnerships (iPPP) like we have with the PSIA we are developing programs to accelerate growth in this sector.”
For her part, PSIA President Nora Terrado said the industry is adequately getting support from the government.
“We are confident with the quantity and quality of Filipino IT talent to support the ITO industry and with continued support from the government, particularly in the areas of talent development and industry promotion, we foresee that the Philippines will soon become an ITO powerhouse,” she said.