IT-BPM industry identifies outsourcing growth drivers

CEBU, Philippines —  The Cebu Information Technology-Business Process Management (IT-BPM) industry has identified growth drivers to sustain its lead in the changing outsourcing market.

Cebu Information Technology-Business Process Management Organization (CIB.O) President Pert Cabataña, in his talk at the 2021 Transformation Summit held recently, identified five battlegrounds for generating innovations that would sustain Cebu’s strength as a preferred outsourcing hub. These are RPA (Robotic Process Automation) for health management system, RPA for insurance, RPA for general finance, accounting, and operations, eGovernance, and AI (Artificial Intelligence) Research Center.

According to Cabataña, CIB.O recognizes the need to create weapons to fight the war of preventing industry stagnation and decline.

The CIB.O president said they seek to achieve superiority in 10 years and that innovation and ecosystem development are the overarching concerns of their organization.

Cabataña added that they are also preparing to build up the ecosystem by accelerating leading-edge technology acquisition, developing breadth and depth of domain expertise, and developing essential soft skills such as communication skills, analytical skills and teamwork.

Cebu is now experiencing a slow growth since 2016 and innovations and developing a strong ecosystem are identified as key to help renew the industry’s growth, he noted.

He explained the S Curve is a common phenomenon in business, industry and technology where it describes a growth pattern that starts low, later on gains momentum, shows growth accelerates but then growth will slow down and plateau as the markets get saturated.

“We have seen this (S Curve) in the Philippine Electronics Export Industry, we have also seen this in the Cebu Furniture Exports Industry. And inevitably, the same thing is happening to the IT-BPM industry,” Cabataña added.

Cebu’s IT-BPM industry was enjoying high growth from the years 2005 to 2010 with annual growth rates reaching 30-50%. But from 2010-2016, it was beginning to slow down at 10-15 percent level.

“After 2016, the industry was already experiencing further slowdown,” Cabataña said.

In 2019, the industry growth forecast for 2020 to 2022 was at 3-7 percent and in early 2020 it was adjusted to only 3-5 percent.

“But 2020 saw further deceleration to only 1.4 percent or $26.7B. No doubt, the pandemic contributed to the deceleration but even before the pandemic, we already saw the start of the slowdown. Therefore, the industry entered its slow growth stage,” he explained further.

When S Curve happens and the industry enters the slow growth stage, Cabataña said three possible futures can occur -- renewal, plateau and decline. The lack of innovation and absence of a strong ecosystem are causes for industry stagnation and decline. “Therefore, the way to promote renewed industry growth is to introduce new S Curves through innovation and ecosystem development”.

The five weapons that Cebu is going to leverage in fighting the slowdown is expected to sustain the industry’s strength moving forward, he concluded.