THE country’s business-process outsourcing (BPO) industry is seen to increase its annual revenues to $48 billion by 2020, based on its growth trajectory since the past decade.
Vikrant Khanna, principal at consulting firm Tholons, said the compounded average growth rate (CAGR) of the Philippines from 2004 to 2014 was in the range of 9 percent to 12 percent.
In a presentation at the Information Technology and Business Process Association of the Philippines (Ibpap) International Summit on Monday, Khanna said the global BPO industry’s CAGR, on the other hand, is at 5 percent to 7 percent during the same period.
If this CAGR continues in the coming years, Khanna said the Philippines could capture $48 billion in revenues from the global industry’s estimated value of $250 billion by 2020.
The Philippines’s $48-billion revenue projection by 2020 represents 20 percent of the global industry value.
The information technology and business-process management (IT-BPM) road map, crafted by the Department of Science and Technology with Ibpap, envisions revenues at $25 billion by 2016, with employment at 1.3 million.
The $25-billion revenues by 2016 will only represent 12 percent of the global industry.
According to Science Secretary Mario G. Montejo, the targets by 2016 are “easily achievable” and may be doubled by 2020. Ibpap, on the other hand, expressed confidence in reaching the road map’s goals by 2016.
Ibpap President Jose Mari Mercado clarified that the 9-percent-to-12-percent CAGR is the global outsourcing market projection of the Philippines’s CAGR across all sectors of the BPO industry.
The global outsourcing advisory firm added that in the surveyed period of 2004 to 2014, the Philippines had a twelve-fold growth in revenues and 10 times in terms of employment.
The consultancy company added that given the CAGR of the Philippines for the past decade, revenues this year would amount to $18.4 billion, coinciding with the target of the Ibpap for 2014.
Given the projection of Tholons for 2020, Mercado stressed the need to start building the IT-BPM Roadmap for 2020, with the view to disaggregate goals and targets per sector.
“The $48 billion is not my projection; it is Tholons’s. But the opportunity is there. Our capability to grab that opportunity and bring [revenues] to $48 billion is why we want to start working on a new revised road map with the government. Our current road map is at 2016, we want to update that to a road map 2020 with our own projections there,” Mercado said.
“When we complete the sectoral road maps such as the one for health care, for voice, for nonvoice, for example, when we total that, that’ll be the industry road map,” Mercado added.
A generic road map that is essentially a “one-size-fits-all” arrangement will not work because of specific requirements and changes per sector. “The success we have achieved so far is because of the road map and we have the whole industry rallying behind a single road map that will get us to where we want to go,” Mercado said.
Employee count in the BPO industry has already breached the 1-million mark as of September 2014, and according to the Ibpap president, the industry is upbeat on hitting the target of $18 billion by end-2014, a 16-percent rise from 2013’s revenue tally of $15.5 billion.
Image credits: Nonie Reyes