ITBPM sector incurs P120-B missed opportunities

Published November 5, 2020, 2:35 PM

by Bernie Cahiles-Magkilat

The Philippines’ IT-business process management (IT-BPM) sector has estimated to have lost P120 billion in the form of missed opportunities and unplanned costs during this pandemic as companies implemented responses to pivot operations to continue servicing global clients amid hard and long lockdowns being implemented by the government.

Rey Untal, president and CEO of the IT-Business Process Association of the Philippines (IBPAP), reported at the International Innovation Summit 2020, a flagship project of the group, that the  ITBPM sector’s responses to the COVID-19 situation has resulted in missed opportunities and unplanned costs amounting to P120 billion.

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

During the past 7 to 8 months, Untal said, the industry has spent a sizable sum on accommodations primarily during the early days of the quarantine continuing provisions of shuttle services, and other work from home in a moment, and execution of expenses, as well as missed opportunities arising from lost revenue, due to reduced capacity.

“This expectedly took a huge toll as the industry had to take on extraordinary unplanned costs,” said Untal.

Despite the less than ideal circumstances, and the different obstacles, Untal said that the ITBPM sector continued to be resilient especially after it was declared by the Inter Agency Task Force as an essential industry during the pandemic these companies to operate albeit at restrained capacity.

The categorization of ITBPM players as an essential industry has led to increase in its productive capacity from just 50 percent in March to 73 percent in May. As restrictions started to ease in June, this figure gradually went up to 90 percent and operating in excess of 95 percent productive capacity through a blended service delivery model.

“Our ability to render essential services to both domestic and international clients is indeed a welcome sign of the sector’s recovery,” he said.

Untal also expressed confidence of a recovery following a report by the Philippine Economic Zone Authority that investment pledges in the ITBPM sector grew 43 percent from January to September this year to P14.1 billion from only P9.9 billion in the same period last year.

“Many organizations, continue to identify our sector to be a prime driver of real estate,” he said citing property management consultancy firms’ reports of its share in the occupied office spaces in the country.

There are also huge job opportunities within the industry, including 30,000 job openings across different sub sectors.

Despite the encouraging data, most industry leaders are not convinced they would be growing at the earlier projected growth rates of between 3.5 percent to 7.5 percent in revenues due to the impact of the pandemic and the global economic contraction.

“Despite this, they acknowledge that although the overall market decline, the labor requirements of

ITBPM industries or companies here in the Philippines remain stable,” he said.  

To get a clearer view of the next two years, Untal said IBPAP has initiated a recalibration an imperative study with a global research and consulting firm to be unveiled on the fifth day of the International Innovation Summit. The recalibrated growth targets will serve as a vital input to the  sector’s playbook on how to optimize the country’s capabilities in ITBPM services, accelerate recovery and facilitate further expansions.

So far, the ITBPM sector would be heavily influenced by several factors. These are a higher focus on technology; again, accelerated adoption of automation and digital transformation; an uptick in demand from key geographies, investment in higher value services, customer experience beyond traditional contact centers as an example, cloud and cybersecurity as well as robust ecosystem comprising of telecoms other infrastructures and enhanced regulations.

“Obviously, the need for a strong, very strong government support is needed, and an improved and predictable business landscape. As we continue to strengthen our response to the pandemic, I assure you that we have not lost sight of the industry’s key priorities. In fact, IBPAP has embarked on several programs and initiatives in conjunction with everything else,” he said.

IBPAP has also some initiatives to drive growth. He cited the  Digital Cities strategy 25, which was launched in June 2020,  aimed at driving inclusive growth in the countryside by selecting being high potential areas throughout the country and transforming them into bustling ITBPM hubs in the next five years.

Through the collaborative efforts between IBPAP and DICT, IBPAP has identified 25 new locations to add on to our expanding portfolio of thriving businesses that support ITBPM ecosystem, create jobs, spur the development of other industries, reduce Metro Manila concentration and boost the local economy.

As part to the city’s 2025 program, these new digital cities will receive support from DICT, other government executive agencies, local government units industry leaders and academic institutions. In an effort to ensure that Philippine ITBPM industry and its workforce are ready to answer the growing and shifting demands of the global marketplace, IBPAP has been focusing on upskilling and reskilling framework that when fully funded is seen as skills development for a million Filipinos over a period of five years.

In addition, the sector in partnership with the government and the academe is also accelerating all efforts to upskill workers.

“This is one very important area where the industry, its stakeholders and the government will need to jointly work together at speed, and at scale.  The natural talent upskilling and reskilling program framework focuses on three learning tracks,” he said.

IBPAP has also an initiative in the pipeline for digital skills learning track that aims to establish partnerships with institutions and other enablers to provide for skilling programs for digital skills, across different sub sectors again of the IBM BPM industry. Under the leadership skills learning track, IBPAP is partnering with leadership development institutions and resource parties in conducting leadership building sessions.