The IT Business Process Association of the Philippines (IBPAP) has vowed to compete by middle of next year the IT-Business Process Management (IT-BPM) Roadmap 2028, which is expected to prioritize strategies in digitization, talent, policy shaping, infrastructure, and country branding over the next six years.
“We aim to complete this in the middle of 2022,” said the new IBPAP President Jack Madrid in his closing remarks at the conclusion of the 13th International Innovation Summit on Wednesday, Nov. 24.
According to Madrid, the IT-BPM Roadmap 2028 will allow real time midpoint reviews along the six years to calibrate for any changes to keep the industry on track and address any speed bumps along the way.
Madrid said as he stressed that the IT-BPM industry is not a “sunset” and even “far from it” as evidenced by extra ordinary performance and growth despite the pandemic.
He reiterated of the expected growth of 7 to 8 percent in industry headcount and 8 to 12 percent in revenue for 2021 along with the upbeat projections for 2022.
With the accelerated digitalization, he cited the need to innovate and respond at a speed like never before. Innovation platforms are what would drive the future of work and jobs creation.
Thus, he said, “The war for talent has not been this fierce. And so the need to continuously upskill and rescale our people have never been this critical.”
He cited data presented by the Everest Group, an established player in the global ecosystem, showing that the country has huge opportunities to increase its share of global services.
Sakshi Garg, vice-president, Everest Group, in a presentation, cited the different trends in global services market growth in 2021 and 2022 where both revenue and headcount are on a path of recovery after the COVID induced slowdown in 2020.
According to Garg, there is more outsourcing/offshoring investments and the budgets are increasing as far as global services market is concerned. The key driver of this growth is the vaccine rollout that increases the confidence of employers and employees.
Another growth driver is the huge fiscal stimulus across different geographies and digital acceleration. He said that digital adoption is necessary amid pent up demand. “Definitely, there was an impact on the local services market in 2020, which has now led to the pent up demand for global services in 2021,” he said.
The last factor that drives growth is the need for cost optimization where offshore locations and the outsourcing model are one of the top choices to drive cost optimization, at least as far as the services segment is concerned.
Looking into delivery of services in terms of geographic perspective, Garg said, Asia Pacific continues to dominate the global services landscape for a five year show in Europe and Latin America.
APAC currently holds about 60 percent of the overall market share in the global service industry. India and Philippines are the top most locations for IT services and business process service and delivery, respectively.
The share of nearshore applications and Latin America is gradually increasing and the key locations are Poland, Ireland, Scotland, Mexico and so on. “We expect the demand for both IT services and business process services to continue to drive up demand for global services delivery from India, Philippines which will continue to be the topmost geographies,” he added.
In terms of next shore applications, Garg said this largely hinge on a number of factors focusing on business continuity, resilience and lower risk exposure. COVID has taught a big lesson to all the enterprises in all the companies globally and it also impacted almost every geography, he said.
As a result, he said, there is a significantly higher focus on enhancing the business continuity, enhancing the resilience and lowering the risk exposure.
Another aspect that investors consider, he said, is geopolitical and regulatory changes such as visas and data privacy norms that are also going to shape and affect changes in locations portfolio of various companies.
This means, he said, higher adoption and acceptance of flexible working models to include a shift in the way companies operate. “There is definitely a higher acceptance of work from home model, which is now impacting the delivery model,” he said.
With that, he said, this would push for greater demand for complex skills, which are not in great supply in many geographies. Finally, he said, the final factor is the cost pressure. Naturally, companies will go to a location that can provide cost arbitrage, which is sustainable, and where inflation rates are low to moderate.
Based on Everest’s survey, the top three choices showed that 88 percent of respondents believe that remote work will acquire a greater share in their delivery locations portfolio in tier three locations across various geographies where there is access to skilled workers at lower cost.