CICT downgrade stirred fears of stunted BPO growth in 2011

CEBU, Philippines - Just when the Business Process Outsourcing and Information Technology (BPO-IT) sector took a big leap in 2011, its fast moving pace was surprisingly welcomed by a critical issue with the downgrade of the Commission of Information and Communication Technology (CICT) to a mere division, under the Department of Science and Technology (DOST).

This development which was announced by the administration of President Benigno Aquino III towards the middle of 2011, has devastated the supposedly rosy and strong confidence of the BPO-IT industry players, inviting impression that the current government has not recognized the economic contribution brought about by the booming BPO-IT sector, which is now regarded as one of the largest industry-employers in the Philippines.

In fact, other industries have attributed BPO/IT’s good contribution to their growth, specifically the retail, real estate, among others.

An executive order EO 47 issued in the early part of this year, a presidential directive which renamed CICT as the Information and Communications Technology Office (ICTO), placed it under the supervision of the DOST.

However, despite this controversial issue, among others problems, such as foreign exchange instability, lack of manpower, players are still managed to grow in 2011, while the outsourcing advantage of the Philippines continues to gain popularity among outsourcing markets across the globe.

Cebu Chamber of Commerce and Industry (CCCI) BPO-IT committee chairman Jerry Rapes said while big names in the BPO/IT industry had decided to make their presence in Cebu and this year alone, most (if not all) of them announced to expand their operations— thereby needing more people.

“Everybody wants to expand, but we couldnt get enough qualified people,” said Rapes, who is also the president of Global eXist, a software and cloud computing solutions firm which offers cloud services and products to other countries like United States, Europe, and others.

Cebu’s BPO/IT industry is now employing over 60 thousand people, this number could have reached double or triple if there was enough qualified human resource available, Rapes said.

In October of 2011, the Cebu Educational Development Foundation for Information Technology Inc. (Cedfit) announced that it has gotten a P5 million budget from the Department of Budget and Management (DBM) to help arrest the shortage of manpower supply requirement for BPO and IT sector.

 Cedfit executive director Jun Sa-a said that the P5 million, which is part of the P500 million budget given by the government through the Technnical Education and Skills Development Authority (TESDA) and Business Process Association of the Philippines (BPAP) joint program called “Training-for-work-scholarship Program” or TWSP.

According to Sa-a, the budget, although way below the proposed P23 million ideal allocation for Cebu on this particular program, would already benefit at least 1,000 near-hire trainees of BPO and IT training programs.

The P5 million allocation for Cebu will come as “vouchers” to be awarded to Cedfit member BPOs and IT companies, that have existing near-hire training programs.

On the average, the cost per head for a BPO crash-course training is P5,000. Sa-a said if the proposed budget of P23 million for Cebu, were approved it could have benefited about 3,700 people.

Based on a survey done by Cedfit, Cebu’s major BPO companies, mostly call centers need at least 3,500 more workers between the months of October to December this year.

Sa-a hopes though that this will not be a one-time support from the government to aid the growing BPO sector and increase employment opportunities for Filipinos, including Cebuanos.

Cedfit is a consortium of industry, academe, government and non-government organizations (NGOs), which seeks to increase the quantity and improve the quality of professionals or practioners in the Information Technology and Communication (ICT), and ICT-enabled services industry through pro-active intervention in the human resource (HR) development sector.

Sa-a said leading BPO companies in Cebu, such as Aegis People Support, Qualfone, Convergys and Stream Global, are one of the identified beneficiaries of the fund, due to their existing TESDA-approved near-hire training program.

Because Cedfit is mandated to develop the HR capability of Cebu, to sustain the growth of ICT and BPO sectors, the organization also has existing training programs geared towards developing more skilled BPO workforce, not only for contact centers, but also in include the wide spectrum of outsourcing field like software and hardware development.

Based on stakeholders’ IT-BPO Road Map 2011-2016 which charts the course for our industry’s growth, the sector is seen to rake at least US$8.9 billion in revenues and 525,000 employees in 2010 to a target of US$25 billion in revenues and 1.3 million in 2016. (FREEMAN)