ITBPM sector still ‘cautiously optimistic’ despite pockets of growth

Pockets of growth are seen in some areas of the IT-business process management (IT-BPM) industry although cautious optimism remained as the overall sentiment among top executives.

Rey Untal, President and CEO of the IT and Business Process Association of the Philippines (IBPAP)

Rey Untal, President and CEO of the IT and Business Process Association of the Philippines (IBPAP), said that country heads of IT-BPM companies in the country are still dealing with “a lot of cautious optimism.”

He said this only indicates that “We are not out of the woods just yet, we cannot relax in terms of processes and policies while trying to deliver work either through the work-from-home arrangement or through office based.”

But Untal said that IBPAP has seen surges of demand in the areas of commerce, logistics, and healthcare.

“One area that has really added a lot of headcount is in the healthcare. This is not a surprise because of the way the global pandemic has manifested,” he said adding that more push is given by incumbents to increase capacities.

Surges in demand are also seen in the areas of commerce and in logistics. He shared that about a month ago, two huge BPO players have announced the hiring a total of 17,000 workers. One firm requires 10,000 employees in three months and the other firm needs 7,000 in the next four months. Untal said he cannot divulge the identities of the two firms.

 Untal also cited data from the Philippine Economic Zone Authority, which reported of a 30 to 35 percent rise in IT investments as of August this versus the same period last year.

But Untal agreed that most companies may not be investing in terms of hiring additional workers, rather in purchases of new essentials, transportation and digitalization of their operations to ensure they can deliver their work to clients overseas.

He believes the investment pledges are going mostly to enablement part of ITBPM firms noting that the work from home arrangement has required the procurement of a number of work essentials that were not necessary before.  

” One company is managing a fleet close to a thousand shuttles for one company. So, that kind of investment is being poured here to sustain that operation,” he said. 

IT-BPM firms are investing in transportation to shuttle workers from office to their residences as public mass transportation is not yet fully opened. In addition, these firms are investing in the digitalization of their processes to strengthen their capabilities and reliability to deliver work either from work from home or from their offices.

“So, a lot of investments go to stabilization of operations but I would not be surprised that some are doing so for them to be positioning these investments in terms of future growth that they are now realizing.”

IBPAP Board of Trustee Celeste Ilagan also noted that these investments are the kind of expenses that companies do not normally report to the Philippine Economic Zone Authority.

IBPAP also expects that the shift to work from home arrangement is going to grow higher.

According to Untal, the current work from home share went up to a high of 67 percent to 70 percent of total work from only 5 to 10 percent before the pandemic 7-8 months ago.

 “Can you imagine the pivot from where we are now and its huge implication on infrastructure, management of transportation and productivity, and even the way we manage culture. These evolve almost overnight,” he said.

 He attributed the successful pivot to the industry, support industries like the telco and power. Ilagan also projected that many of the companies are now planning of permanent work from home strategies. “Many are going to expand that way because work from home is a viable option,” she said.