Study: Phl software services outsourcing up 37% in 2011

MANILA, Philippines - The software services outsourcing industry in the Philippines posted a positive growth as it reached a robust 37 percent in 2011, translating to $993 million with 11 percent growth rate on employment or some 50,000 information technology (IT) professionals, based on a recent study conducted by the Philippine Software Industry Association (PSIA).

The nearly $1-billion figure is attributed to an increase in demand from international clients to tap local firms for their specific IT and software requirements.

PSIA president Nora Terrado said improved utilization of the current talent pool enabled companies to increase efficiency and revenue per full-time employee (FTE), while close collaboration between industry players and the government in training fresh graduates and career switchers helped augment the much-needed technical workforce.

“With an increased demand for IT services in 2011, these trainees found themselves tapped into the IT mainstream services. This, coupled with process optimizations and innovations, improved the quality of the IT outsourcing revenue,” Terrado said.

Full services to product development

Moreover, some local players are seen to be transitioning from full services to product development companies. Given this trend, the PSIA has created a special interest group on product development (PD/SIG) which aims to help the local software development industry create and commercialize at least 10 globally recognized software products in various categories by 2016, each generating at least $1 million annually from offshore customers.

Country marketing also has a lot to do with it. The PSIA, for one, is active in participating in annual trade missions abroad like the recently concluded Software Development Expo in Japan and the upcoming CeBIT in Australia and Microsoft World Partners Conference in the US, to name a few, to promote the Philippines’ advantages and IT capabilities, coupled with local marketing through consistent public relations and IT evangelism.

Regular networking and business-matching sessions are also organized to promote a dynamic as well as collaborative ecosystem in the sector, through membership meetings, inbound missions to maintain partnerships with neighboring countries such as Japan, Singapore, and Thailand, and regular dialogues with partners in the industry, academe, and the government.

New challenges, opportunities

According to Terrado, the sector is looking forward to achieving new opportunities as well as preparing for new challenges in the years ahead.

“Capability development and product and services innovation are important factors to sustain this growth trend amid the globally competitive environment, the advent of cloud computing, and the convergence of BPO and IT services, among others,” Terrado said.

Terrado further noted that the positive growth of the industry in recent years has encouraged IT organization to offer more long-term programs to develop IT professionals through the initiatives of its capability development committee such as industry-academe linkages, skills development, near-hire scholarship program, and IT teacher development.

The PSIA also offers organizational development programs and a series of enablement seminars on various technology topics and best practices, to boost the local industry’s global competitiveness.

Among the areas of potential growth for the industry seen for 2012 are on application enhancement, maintenance and support, independent software testing, and remote infrastructure services.

The PSIA represents some 150 companies in the country engaged in software development and IT outsourcing, and is among the five independent organizations that make up the Business Processing Association of the Philippines (BPAP), which includes the Contact Center Association of the Philippines, Animation Council of the Philippines Inc., Healthcare Information Management Outsourcing Association of the Philippines, and the Game Developers Association of the Philippines.

According to a BPAP report, the IT-BPO industry in the country is also gaining ground as revenues for 2011 reached an all-time high of $11 billion, 24 percent higher than the previous year with $8.9 billion.

Employee count has reached 638,319, up eight percent from 525,000 in 2010. The voice sector has the most people hired at 416,000, followed by the knowledge process outsourcing sector with 128,650 people.