PH IT-BPM sector ‘uneasy’ with revenue
Credit to Author: Anna Leah E. Gonzales| Date: Tue, 12 Nov 2019 18:14:33 +0000
REVENUE of the information technology-business process management (IT-BPM) industry is projected to grow by 7.5 percent from 2020 to 2022, slower than the 9.2-percent average growth earlier projected by the Information Technology and Business Process Association of the Philippines (IBPAP) in its 2017 to 2022 road map.
The recalibrated growth projections in the IT-BPM road map was released by IBPAP at the 11th International Innovation Summit held on Tuesday at the Marriott Grand Ballroom in Pasay City.
Hanumantha Karthik of Everest Group that conducted the study said the revenue of the sector is projected to reach $28 billion by 2020, $30 billion by 2021 and $32 billion by 2022.
Under a “worst case scenario,” however, revenue is seen to grow by 3.5 percent annually to $27 billion in 2020, $28 billion in 2021, and $29 billion in 2022.
For 2019 alone, the industry’s revenue is projected to grow by 5.2 percent to $26 billion.
Karthik said employment, on the other hand, is forecast to grow by 7.0 percent to 1.37 million in 2020, 1.47 million in 2021 and 1.57 million in 2022. For a worst case scenario, it is projected to grow by 3.0 percent to 1.33 million in 2020, 1.37 million in 2021, and 1.42 million in 2022.
For 2019 alone, employment growth is estimated to hit 4.7 percent to 1.288 million.
Under the 2017 to 2022 road map for the IT-business process outsourcing (IT-BPO) industry crafted in 2016, the sector targets to be a $39-billion industry with workforce reaching 1.8 million by 2022.
“There are multiple factors that are affecting the global IT-BPM services,” said Kartnik, noting these include macroeconomic constraints, impact of digital and automation, talent shortage, geopolitical and regulatory challenges, rapid transformation of business models, and rising cost and margin pressures.
Kartnik said the industry in a global scope is experiencing slower growth with the slowdown more pronounced for contact center, business process, and IT services, as compared to health care, animation and game development.
In the Philippines, Kartnik said that in addition to global factors, talent shortage and uncertainty in incentives, especially in the last two years, are also factors to the projected slowdown.
“Can the Philippines achieve 7.5-percent of growth? It’s possible. However, this requires a lot of things from the industry to outperform itself and several things that need to also work in favor from a global perspective,” he said.
The Philippines’ IT-BPM industry, Karthik said, will also depend on the impact of the proposed rationalization of incentives, pace of infrastructure development in provinces, and its ability to support growth and ability of the Philippines to increase its share of new digital work through appropriate market positioning and talent development initiatives.
For his part, IBPAP President Rey Untal said the industry is committed to accelerate programs to achieve growth potential.
“The study gave us a lot of insights and from that, it is clear that we need to take both strategic and sustained actions in specific areas to achieve the maximum growth potential for the Philippine IT-BPM sector,” Untal said.
He added there is a need to promote infrastructure development for the growth of the IT-BPM services both within and outside Metro Manila.
“We can accomplish this through strong linkages between industry players and partners in ICT (information and communication technology) as well as local government units,” he said, adding that other programs include talent upskilling, pushing for growth in small and medium enterprises and startups and achieving competitiveness in the global marketplace.