Cost and its reduction was a notion that fueled the Philippines’ IT-BPM growth over the last two decades as managed service centers providing outsourcing services offered competitive rates allotted for a workforce in skill substitution with linguistic expertise to serve the customer service forefront.
With disruptive technology shaping businesses worldwide and is dictating the delivery models for the outsourcing world’s blueprint of operations, agile services and the efficiency of the information handling chain are increasingly being guided by automation, analytics and artificial intelligence.
As the IT-BPM industry is bracing for changes, the IT and Business Process Association of the Philippines (IBPAP) is also taking measures to be in a position to be proactive in using key performance metrics to influence their policies. Part of the reform will have the IBPAP organization move from its traditional yearend review in favor of the midyear review. This allows the IBPAP to be in a better position to respond to changes, make key policy changes and allow its members to make midyear business decisions as well.
The key policy change employed and enacted by IBPAP is centered on value and its proposition towards its members and the country’s IT-BPM industry. Midyear performance review allows businesses, industries and executives to make key decisions in order to steer their respective organizations in meeting fiscal year targets.
More than a buzzword “value proposition” has emerged as a major factor when it comes to sourcing potential outsourcing service providers. Aside from the overall reduction of cost attributed to outsourcing, the value distilled and realized when it comes to service proposition, infrastructure, process management, insights and technology are dynamic factors that businesses are looking for when it comes to selecting a service provider.
According to the results published by Deloitte’s biannual Global Outsourcing Survey, the aspect of value proposition and its realism are ratified as a major factor when it comes to outsourcing – aside from cost reduction. Deloitte conducted a poll composed of organizations of various sizes across Americas, Europe, and Asia wherein majority of the decision makers and executives affirmed their expectations towards service providers — the realization of value through innovation and its application.
From Deloitte’s survey, the innovation is realized through the knowledge and transformative processes that transpose the standard operating procedures. 28% of survey responders are looking to acclimate with fundamental knowledge, basing on a provider’s intellectual equity.
Business decision makers are also more receptive to the concept of disruptive methodologies that go beyond the standard operating procedures in order to assert innovation and its transformative clout as 17% of survey responders are expecting service providers to take a pilot step towards innovation of their industry.
Businesses are also heavily investing in the probability of service vendors in utilizing platforms such as cloud computing, automation and artificial intelligence to improve the overall outsourcing setup.
Today, automation and artificial intelligence are increasingly being taken up as key business changes as 70% of businesses stated in the survey that they are looking for service providers who are employing the mentioned technology.
When it comes to the transition of servicing parts of the operation towards a co-managed service setup, 73% of businesses are wary of the IT risks and vulnerability within the shared systems between their department and the provider. IT risks and cyber vulnerabilities have such a profound effect on whether to outsource operations as 23% have reduced their outsourced operations by as much as 23% due to the IT vulnerabilities opened up by the cooperation.
The IT-BPM industry in the Philippines currently employs thousands of Filipinos and the industry accounts for a significant contributor for the country’s economic GDP growth. Through the sustained rate from 2010 to this year, the Philippine IT-BPM industry aims to employ 1.8 million Filipinos by 2022 and in terms of upskilling to scale with the industry’s learner and smarter model, the IT-BPM looks for its workforce to comprise 73% of the medium- to high-level skilled jobs.
For the Philippine’s IT-BPM industry, the disruptive changes brought on by technology and the increasing inclination of businesses towards value proposition when it comes to selecting an outsourcing vendor are factors that cannot be ignored as the country’s IT-BPM sector is aiming to be competitive in the modern market of global outsourcing that is fueled by technological advancement.
This means that key players within the country’s IT-BPM industry must be more accommodating, flexible and be able to scale with the ever changing business conditions under an executed service level agreements (SLAs) under the organization’s vendor management organization (VMO) arm.
- 28% said that they are always looking for a better SLA prior to the outsource operations
- 27% of businesses are looking for more integrity and flexibility when it comes to the VMO
Upon realization of value attained when it comes to the proposition of SLAs and VMOs, 43 percent claimed that they were able to meet significant cost reductions.
In such studies, outsourcing to cut operational costs is still a verifiable motive for businesses who seek to enter a managed service with an outsourcing provider. In the call for greater value from these providers, the market is expected to be more competitive and offer greater diversity when it comes to the value defined in service proposition, infrastructure, process management, insights and technology. In calling for greater value, service providers are positioning themselves to assume a verifiable business solution, thereby further improving the standards of the IT-BPM sector as a whole.
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