Economy
Written by Alma Anonas-Carpio / Correspondent
Sunday, 19 October 2008 20:36

DESPITE the financial crises hitting both local and global financial markets, the information technology (IT) and back-office operations industries will continue to grow, the Business-Process Outsourcing Association of the Philippines (BPAP) said on Thursday.

“Yes, admittedly there will be a bit of ‘cooling down’ on our growth numbers but definitely, growth will still be there,” BPAP chief executive officer Oscar Sañez said.

“The local IT-BPO sector will continue to present itself to major US companies as part of the solution while they undergo their own restructuring to save on costs.”

Sañez also said that, in the short term, some of the local IT BPO industry’s existing clients may reassess their strategies. However, Sañez expects the underlying trend of increased outsourcing to continue.

“We will surely see some changes in our client scene as the banking and financial community undergo dramatic changes in their line-up and scale but these companies will need to look for cost-savings solutions, one of which is via outsourcing many of their corporate functions,” Sañez added.

He said investors from the United States, Europe, India, Singapore and Australia will continue to keep in close contact with the Philippines’ IT-BPO industry to explore possible investments in the country, particularly in companies that have not yet outsourced their functions.

BPAP chairman Alfredo Ayala, who is also president and chief executive officer of LiveIt Solutions, Ayala Corp.’s BPO investment arm, concurred with Sañez’s statements: “Industry leaders remain confident about the local IT-BPO industry. We expect the global outsourcing industry to follow the same patterns that it has in past global recessions.”

“In the very short term, there can be a deceleration of growth rates as volumes flatten due to the slowdown in economic activity and therefore customer interactions,” Ayala said. “But this is typically followed in the near and medium-term by a surge, as companies accelerate their cost-cutting efforts. Given the anticipated steepness of this downturn, we anticipate healthy growth next year.”

The size of the whole pie for outsourcing is big—around $450 billion—a significant part of which remains largely untapped because many companies have not really done any outsourcing.

According to Sañez, the IT-BPO industry now serves many industries—telecommunications, high technology, power, retail, utilities — and will soon target other “untapped industries.”

Early next year, the BPAP will market the country’s IT-BPO expertise globally, by going on extensive campaigns in the US and Australia with fresh marketing collaterals anchored on its new tagline “Experience Excellence, Experience the Philippines,” which was introduced recently. “The revitalized marketing collaterals will highlight the viability of clients moving their services to the Philippines,” Sañez said. “From our end, we will continue to improve on our operational efficiencies to ensure we drive competitiveness and value to our clients.”

Proof that the local IT-BPO industry is undaunted by the current global economic turmoil, said BPAP president Danilo Reyes, is that it will be “business as usual” for the IT-BPO industry here.

“Sure, we are aware of what’s happening globally, particularly in the US and in Europe,” Reyes said. “We’re constantly monitoring and keeping a close watch on the latest developments with keen interest,” Reyes said.

“But being true to the renowned Filipino trait of ‘resiliency’ amid the greatest of odds, we will remain undaunted and maintain a very positive perspective, yet keeping a watchful eye on what’s happening around us,” he added.