The IT-BPM Industry
The Philippines’ Information Technology and Business Process Management (IT-BPM) sector is one of the best-performing and employment generating activities in the past four years. Its global leadership in voice-based services as well as continuing improvements in non-voice and complex process outsourcing show the promising growth trajectory of the IT-BPM sector.
The Philippines IT-BPM Industry
Looking to innovate and drive cost efficiencies, companies have looked to low cost countries such as the Philippines to outsource their non-core business processes to either specialized third-party providers or their own global in-house centres. The Philippines is considered a top tier destination for IT-BPM services, ranking third in Tholons’ Top Digital Nations Services Globalization Index in 2017, and is counted among the leaders in the market alongside India. In the past 10 years, the country has achieved significant growth and progress, increasing its share in the global market from 5 per cent in 2006 to 12.7 per cent in 2016. The Philippine IT-BPM sector has grown rapidly from 2010 to 2016, increasing revenue at a CAGR of 17 per cent (from US$ 8.9 billion in 2010 to US$ 22.9 billion in 2016). In terms of manpower, the sector has created an average of 100,000 new jobs every year, growing at a CAGR of 13.7 per cent (from 527,000 FTEs in 2010 to 1,150,000 FTEs in 2016).
The sector is also known to be one of the biggest employers of females in the country, where 53 per cent of its workforce are females, significantly higher than the national figure of 39.6 per cent. Apart from being the top destination for voice-based services, the Philippines has been expanding its horizontal BPM services in areas such as finance & accounting, animation and game development; as well as vertical-focused solutions such as health information management services.
Key Services Offered
Contact Center and BPO
Mature services: Customer Care, Helpdesk Growth services: ESO, Data Analytics, Performance Management, Legal Process Outsourcing
Information Technology Services
Mature service: Application Development, Infrastructure, Support
Growth services: System Integration, Automation Enablement, IoT Enablement Languages, Application Development Management (ADM)
Health Information Management Services
Mature services: Payer services Growth services: Preventive Health, Remote Healthcare Management, Provider Services
Mature services: 2D animation
Growth services: 3D animation
Game Development Services
Mature services: Game development
Growth services: AR/VR, Gamification
Global In-House Centers
Mature services: F&A
Growth services: Industry-specific Services for Telecom, Healthcare, Insurance and Pharmaceutical
Contact Center and BPO
The largest IT-BPM sub-sector in the country contributing US$12.7 billion in revenues (or 57 per cent of total sector revenues) and employing about 750,000 full time employees (FTEs) in 2016. Voice-based customer care is the most common service offering in this sub-sector, followed by helpdesk services, and outbound sales and marketing. There is also notable growth in the non-voice BPM market, driven by the demand for more complex tasks and higher value services in human resources, finance, and accounting. Outsourcing of vertical-specific processes (such as credit cards processing in the Banking sector for example) is also on the rise as companies look to outsource volume tasks that are close to their core business areas.
Revenues from IT outsourcing reached US$2.9 Billion (or 13 per cent of total sector revenues) in 2016. This sub-sector employed about 123,000 FTEs in the same year. IT services outsourcing refers to the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes. Large service providers typically use the Philippines as an alternate location for IT services contracts as part of their diversification and risk mitigation strategy. The Philippines, for a majority, offers support and application development functions. Technology, manufacturing, and BFSI are the largest customer segments, followed by retail and healthcare
Health Information Management Service
Health information management services (HIMS) is one of the fastest-growing emerging subsectors within the sector. It generated revenues of US$ 2.4 Billion (or 10 per cent of total sector revenues) and employed about 118,000 FTEs in 2016. It comprises three core areas—the payer or insurance segment, the provider, and the pharmaceuticals segments that constitute the overall healthcare outsourcing subsector. Initially, HIMS services in the country only offered medical transcription services, but in recent years the sector has begun offering a wider range of services including: infrastructure outsourcing (data center, network management, security), application outsourcing (application development and maintenance, testing, system integration and production support) and BPM outsourcing (claims management, provider management, etc).
Animation and Game Development
Revenues from IT outsourcing reached US$2.9 Billion (or 13 per cent of total sector revenues) in 2016. This sub-sector employed about 123,0The animation and game development sub-sectors generated revenues of US$0.6 billion (or 1 per cent of total sector revenues) in 2016. The industry is composed of a mix of companies as well as freelancers offering their services to clients directly through online portals. Excluding freelancers, the sub-sector employed 4,300 FTEs in 2016. Animation companies are usually tapped by international and local studios to do production and post-production services. Most of the animation revenue originates from 2D animation, with clients mainly from Disney, Warner Brothers, Nickelodeon and Cartoon Network, among others.
Global In-House Centers
The global in-house center (GIC) sub-sector contributed revenues of US$4.7 billion (or 20% of total sector revenues) and employed about 149,000 FTEs in 2016. Unlike other IT-BPM services outsourced to third-party service providers, GICs are managed internally by the same parent company. They are designed to offer a service or a group of services, either in a single or a specified number of delivery locations, for the benefit of the entire organization or group of organizations.The global in-house center (GIC) sub-sector contributed revenues of US$4.7 billion (or 20% of total sector revenues) and employed about 149,000 FTEs in 2016. Unlike other IT-BPM services outsourced to third-party service providers, GICs are managed internally by the same parent company. They are designed to offer a service or a group of services, either in a single or a specified number of delivery locations, for the benefit of the entire organization or group of organizations.