2021: A rebound year for the Philippines’ BPO and shared services industry

We are now enjoying 2021. For many, the past year was a year of unparalleled disruption as the global pandemic sent the business world reeling from the shock and consequence. It was a phenomenon that has not been felt since the last century, involving the years 1918-1920 where global influenza swept across the western world. Keen survival instincts kicked into gear as businesses had to adapt, evolve, and equip themselves with the new healthcare protocols and protective equipment necessary for their employees to maintain operations and business continuity.

2021 as a rebound year for the BPO sector

Unlike the early months of 2020 where COVID-19 took us by surprise, 2021 has a more stable and optimistic outlook as the business world – and the BPO & Shared Services are better equipped to stabilize and adapt to a new working environment:

• Better healthcare protocols in the workplace
• Equipping employees with the knowledge and protective equipment
• Flexible working schedules
• On-site and Off-site delegation of teams
• A re-calibrated growth projection now that the pandemic has been factored in

According to IT Business Process Association of the Philippines (IBPAP) President and CEO Ray Untal, the Philippine BPO, IT and Shared Services industry missed a 120 Billion opportunity in this year. The factors include the global slowdown due to the pandemic, business disruption of key service points in the west, and investment plans towards the Philippines being halted due to the uncertain economic situation.

Local factors included the lockdown, which was mandated by the government. The lockdown is among the world’s lengthiest lockdown that spans from March and it gradually eased up only in July. The result in trying to contain the infection through the lockdown was that the economy contracted as businesses close and even the most resilient conglomerate and IT companies have hosted operating losses.

Outlook Points for the Philippine BPO & IT Services

Humanization

2021 is a promising year for all as the world, having learned its lessons from the 2020 global pandemic is in a better position to adapt, prosper and make good of the theme: great reset. The great reset is a principle unveiled by the World Economic Forum of the changing mindset and perspective after the pandemic, where we rethink our philosophy on business, economic participation, blueprints for social responsibility, and the scalability of solutions.

Within the context of the Philippines, BPO & IT companies alike have considerably done more and are doing so in the wake of the pandemic. Whereas:

• Workplace healthcare is the top priority
• Making work more flexible to comply with healthcare protocols
• Increasing Corporate Social Responsibility and Community Outreach
• More focus on mental health
• Championing workforce inclusion and diversity
• Employee welfare where coverage on HMO and insurance are offered over the years

In the coming decade, workplace culture and social responsibility will be huge factors in retaining and capturing talent from the workforce as millennials and Generation Z alike. Take into account the said factors as offered salary alone are no longer top indicators for career destinations.

Virtualization

The world’s increasing digitalization and virtualization will offer more outsourcing and shared services opportunities for BPO and IT. With non-core processes being made flexible by expanding their service lines – through apps, online portals, and device access, departments such as customer service, technical support and more resources for development/maintenance are facing more challenges in terms of their scalability and critical response times.

For Philippine IT & BPO companies, such small niche markets between API and network services have a relative opportunity to commercially expand. This, as running services, interim programs, and microservices are increasingly moving out of the niche market and into the wide commercially viable market, where shared services in terms of support and resources are being sought. In this case, we look at the Philippine workforce which is young, skilled, and highly adaptive to technology and its technical skill requirements. These encompass not only career opportunities in the form of long-term virtual employment but also service contracts for companies who offer development services.

Emerging technology such as Blockchain, Intelligence Automation (AI), and Robotic Process Automation (RPA) have been touted as technologies that could shatter the Philippines ’ status as a BPO and IT Shared Services destination. However, it is not the case in 2020, as associations like the IBPAP have been aware of the potential disruption of the said technologies and with the disruption come innovation and opportunities.

The transformation of the Philippine workforce in the BPO and IT Shared Services have been well documented to have transitioned from the back office, entry-level work to soft skill work displacement involving middleware interaction between people, systems, and intermediary services to help people and organizations navigate the complexities of the digital services world.

Decentralization

The current Duterte administration has focused on the decentralization of business hubs, commercial hubs, technology hubs, and economic zones to diversify and spread the growth of the Philippine regions when it comes to their status of being business-ready, which means a good destination for investments.

Now, when we say IT Parks, Economic Zones and Technology Hubs, we are no longer listing Metro Manila as the sole destination as regional cities across the provinces namely: Bacolod, Cebu, Cagayan De Oro, Davao, Angeles Pampanga, Iloilo and among others have been cited as rising destinations for commercial, business and investments to IT, BPO and Shared Services. This is a good sign to offer employment, improve the region’s commercial capabilities, tax income generation, and upskill the local workforce.