ICT industry sets sights on $62-B outsourcing market

Information technology (IT) industry leaders have launched a drive to develop and promote the Philippines as a hub for offshore business process outsourcing (BPO), which is seen to fuel global IT growth and become a $62-billion market in five years.

"The country is uniquely placed to capture a lot of this growth because of its deep pool of knowledge workers who speak English and are IT-proficient," said Roberto Romulo, chairman of the private Digital Philippines foundation, which is leading the drive.

In his remarks before the recent CEO Forum on BPO organized by the foundation, Romulo said outsourcing represents the next growth area that could bolster and strengthen the country’s export sector, which is now heavily geared towards electronic products.

Outsourcing by companies of various non-core corporate services was valued at $100 billion worldwide in 2000 and is estimated by Gartner Inc. to reach $178 billion by 2008. Of this amount at least $62 billion will go to offshore providers in such countries like India, Ireland, Canada and the Philippines.

Digital Philippines has launched a campaign to lure more of this offshore outsourcing into the country, creating a marketing arm, Outsource Philippines Inc., to promote Filipino capability in BPO to the world. The campaign kicked off Feb. 13 at the CEO Forum attended by top executives from local and transnational companies, ICT organizations and the diplomatic community.

Romulo and the head of the RP-US Business Council, Ramon del Rosario Jr., are organizing a BPO roadshow coinciding with the impending state visit of President Arroyo to the US, during which Outsource Philippines Inc. will be formally launched in the US.

Through Digital Philippines, the private sector is spearheading the BPO marketing drive to complement a strong government effort to develop the ICT sector. Representing the private sector, Romulo sits as co-chairman in the Information Technology and e-Commerce Council.

In his remarks at the forum, Outsource Philippines and head Ramon Dimacali Jr. said the country enjoys many strategic advantages besides its knowledge workers that make it ideal as an outsourcing hub in Asia, where many western companies are looking for outsourcing providers.

It is the right time-zone to offer round-the-clock services to western clients, has strong logistics capabilities as hub of global cargo carriers, and has efficient telecoms provider with falling bandwidth costs, Dimacali said.

The former president of IBM Philippines and chairman of the pioneering outsourcing firm Software Ventures International, reported that Filipino firms generated revenues of $349 million in 2001 in four key outsourcing services, which figure could grow to $1.7 billion by 2004.

The firms have proven the Philippines’ delivery capability in the areas of customer care, medical transcription, application development and maintenance, and animation, all of which are high-growth fields.