Software development eyed as niche for BPO

Business process outsourcing is one of the industries eyed to have a huge growth potential for the country’s economic and business environment; however, a CEDF-IT official discussed that several segment of its market is yet to be explored and developed to properly gauge the country’s work pool competency.

In an interview with Cebu Educational Development Foundation for Information Technology (CEDFIT) president Engr. Jose Mari T. Bigornia, he pointed out that due to the emerging Information and Communication Technology sector of Cebu we were able to generate 100% employment as many BPO have located in the province mostly composed of call centers that demand and hire several agents every quarter.

The demand according to Bigornia peaked up during 2005 and because ICT is a promising industry, its movement will still continue this year and the coming years.

But despite this continuous rapid growth of the sector he pointed out that BPOs should start exploring other services that will translate more financial opportunities as well as more job opportunities for the Filipinos such as high end software development.

For the meantime, BPO sectors and engine such as legal transcription, medical transcription, logistics, accounting, animation industry and design engineering and business  processing (back-office operations) like administrative service, personnel and payroll management services are some of the rooster of services that are catered by BPOs operating in the country collectively called as non-voice sector.

However, most of the business mix in the BPO industry sector is still captured by call centers in the voice segment that comprises 70% of the whole ICT businesses.

“Our BPO industry is still open to a lot of opportunities and possibilities because we still have not focused on one aspect of the industry that we can capitalize on,” said Bigornia.

The high-end software development segment of the BPO industry composes only about less than 10% of the whole sector but Bigornia stressed that it is actually one big market that we can bank into.

“High-end software development ensures a huge income with less workload and this is one niche market that we can develop,” Bigornia said.

At the moment, only a few players have started to develop operations in the high-end software development segment and among which include IBM and Oracle, both are big ICT players.

“The needs of the BPO sector kept on increasing but pretty sure the manpower and skills we have will also continue to improve to address these needs. The Philippines especially Cebu is already becoming a metropolitan destination because we have slowly raised the bar notch higher in terms of business process outsourcing sector is concerned,” Bigornia stressed.

High-end software development entails software development that is based on client’s requirements. Bigornia revealed that as of the moment, this industry has a big market especially abroad but most of the practitioners are private individuals known as “cross borders” which are hired by clients abroad but works on their home-base.

These practitioners as Bigornia said are not registered but they earn a minimum average income of about 3, 000 dollars every month. As of the moment, CEDFIT is still making ways to get these practitioners together and be organized for their own protection.

By 2010, the Business Process Association of the Philippines (BPA/P), the industry’s major association, in an article reported that industry expects revenues to triple to 12. 1 billion dollars and estimated call center revenues to reach at 5. 29 billion dollars in 2010 with 97% increase over three years but lesser than 45% of the total BPO industry revenues. BPA/P believes that outsourcing could be a 12 billion dollar industry that will employ 900, 000 personnel.

Consulting firm A. T. Kearney recently ranked the Philippines as the fourth in the world for the most desirable global services locations that are competitive for BPOs behind countries like India, China and Malaysia but three years ago, Philippines was outside the top three.