Philippines ups its ante in IT services outsourcing

Sep 23, 2014SHORE Blog

While the Philippines is acknowledged as an outsourcing powerhouse, it has yet to catch up with the overall industry leader, India, in information technology (IT) services outsourcing, which is sometimes lumped together with other services in the general business process outsourcing (BPO) category of services.

IT services is so important that last year, the Philippines’ foremost offshoring industry association, the Business Process Association of the Philippines (BPAP) formally changed its name to the Information Technology Business Process Association of the Philippines (IBPAP), incorporating IT due to IT services being a very important component of the industry as a whole.

Further underscoring the importance of IT services among outsourcing offerings, starting this year, IBPAP also revised the name of its annual industry event: what was formerly known as the International Outsourcing Summit (IOS) is now branded the International IT-BPM Summit.

What IT services are outsourced?

An entire spectrum of IT services is outsourced by companies from virtually all industries. Among the categories of IT services are the following:

  • Applications development and maintenance. These services are highly customized depending on the technologies clients use, and are based on different technology platforms (e.g. Java, HTML5, .NET, etc.). Once applications are built and developed, these are also supported and maintained. Applications are for hardware, software, mobile (such as Android and iOS), network, and other technologies.
  • Enterprise resource planning (ERP) business solutions. Some of the leading ERP and cloud-based platforms are SAP, Oracle and PeopleSoft. IT outsourcing services with ERP include implementations, maintenance and support in functional and technical consulting, design, upgrades, database administration, data conversion, and many more.
  • Internet services. This category of IT services includes Internet marketing and sales that entail a variety of services, such as: web design and development, including the use of scripting languages (HTML 5, PHP, etc.) and database management; linkbuilding; and, combining Search Engine Optimization (SEO), Search Engine Marketing (SEM) and Social Media Marketing (SMM) to leverage social media sites to market a business.
  • Testing and consulting services. Testing includes test scripting, data creation and execution, etc. Business process consulting services strive to advice clients on how to continuously improve their business processes or even to transform their businesses through better tools and methodologies in project management, information workflows, output environment, systems integration, etc.
  • Analytics services. Analytics as IT services outsourcing involves interpreting and applying data, statistics, operational research and applying computing resources to solve businesses’ issues, and formulate strategies and operational policies. The analytics outsourcing segments are in marketing, risk management, operations and data, fraud, finance and investment, and predictive and strategic science.
  • Industry-specific IT or niche services. Certain industries such as the healthcare industry have IT services outsourcing requirements specific to the industry. To illustrate, the healthcare industry requires medical transcription, medical billing and coding, and validation.

Whither the Philippines in the IT outsourcing market?

The IT-BPM market is currently one of the Philippine economy’s strongest growth drivers. To achieve the target revenue of US$25 billion by 2016, the industry’s movers and the local government crafted the Philippine IT-BPO Road Map 2011-2016. The Roadmap identifies priority areas such as greatly improving awareness in international markets, both existing and new ones, of our propositions in IT, voice and non-voice BPO services.

Another priority area that goes with increasing visibility in the IT services outsourcing market is ensuring that the Philippines has a steady supply of highly-skilled manpower to do the services. The available talent pool can be achieved by driving standards and accreditation for a better match between graduates’ skills with the industry’s requirements, along with aggressive domestic marketing of the industry to the local pool.

Considering that the Philippines has been hitting its outsourcing industry growth targets these past three years, the country has good prospects for sustaining its momentum on the global outsourcing stage, and possibly even dethroning India in the future.