IT-BPM ‘continues to do well’

CONSIDERED one of the top growth drivers of Cebu and Central Visayas, the information technology and business process management industry has transformed many lives of locals. Although consistently showing huge growth numbers, the Cebu Educational Foundation for Information Technology (Cedf-IT) and the National Economic Development Authority (Neda) believe the official figures are still lower than what the industry produces.

Cedf-IT and Neda 7 are teaming up to better understand the local IT-BPM industry and validate actual employment and revenue figures being produced.

According to the Neda 7, the first quarter of 2014 employed 29,000 new workers while the second quarter employed about 30,000.
However, these figures were culled from firms registered with the Philippine Economic Zone Authority (Peza). “There are many IT-BPM companies that are not located in IT parks and are not part of the official reports right now,” said Neda 7 Director Efren Carreon.

Employment figures

He said there are legally registered, small-scale companies scattered about but are not included in the final reports because of their locations. He admitted these companies may be small, but he said even a startup with two to three employees could serve a large market and earn a substantial amount in revenue. He hopes, however, that these small companies are not staying out of Peza buildings just to avoid tax payments. “If we can include those located outside Peza zones, it will make the figures even bigger.”

The entire year’s figures were not yet available, but Carreon said even the first half figures are doing admirably against the whole year performance of 2013.

While 51,962 were directly employed in 2013, Carreon said the first half of 2014 already saw 65,303 employed directly. About $411 million in revenue has been earned for the first semester of 2014, already more than half of what was earned in 2013.

Number of companies

They plan to confirm the actual employment numbers and assess the industry’s impact on the local economy.

Cedf-IT managing director Wilfredo Sa-a Jr. assured that the local industry continued to do well, seeing new players in health information services and insurance management opening up offices in Cebu. These include EXL, UHG, Cognizant, Manulife and QBE. He added that existing players also continued expansion activities while two major acquisitions were noted in Convergys, which acquired Stream Global Services and Teleperformance acquiring Aegis People Support.

Overall, Peza records show between 150 and 200 companies are in Cebu while Tholons estimates about 120,000 directly employed in the industry.

The industry, however, is still dominated by foreign players that operate contact centers, health information services, insurance management, shared services and research and development centers. Sa-a said local entrepreneurs need to be encouraged to open up their own and that activities for startups and opening incubation centers will help them develop their own thriving enterprises.

Sa-a sees only good things for Cebu’s IT-BPM industry, saying it is a top location for expansion plans outside of Metro Manila, as shown by a survey done among delegates of the International IT-BPM Summit held in Manila last October. He believes it is because Cebu has now breached 100,000 workers and has the reliable infrastructure to support the operation of these companies.

“And we have always been perceived as a city where you work, live, and play because of the laid back yet cosmopolitan lifestyle. Preparing our talents for new opportunities and making our infrastructure better like the planned major upgrading of our international airport will help us compete globally.”

Big data, cloud

He also thinks Cebu can position itself for better opportunities by getting its workers skilled in big data analytics and cloud migration. He said Cedf-IT’s partnership with EMC Academic Alliance Program gas allowed them to train university teachers on cloud infrastructure services and big data analytics for free. The teachers are expected to share their trainings with students by offering these as electives. Sa-a said that with more workers exposed to these skills, the Philippines, through Cedf-IT could become EMC’s third largest partner after India and China.

The year ahead will see Cedf-IT and Neda 7 delving deeper into the IT-BPM industry.

“We both believe that this industry has permanently changed the skyline of Cebu and it has opened vast economic opportunities for both Cebuanos and non-Cebuanos alike.”