PH NOW A MATURE LOCATION FOR SOFTWARE SERVICES

The Philippines is now considered as one of the five “mature locations” for software services in the world. This was revealed by Philippine Software Industry Association (PSIA) president Nora Terrado during the PSIA’s first general membership meeting for 2012 held in Makati City recently.

Terrado cited a report by Everest Group that the Philippines is currently ranked with China, Brazil, India, and Poland as mature locations for having more than 50 software services operators.

The Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their front-, mid-, and back-office business services.

A combination of large scale campaigns to foreign markets as well as growing demand for outsourced work on software services have drummed up support for the Philippines’ software services sector. Couple this with the fact that new digital platforms, notably mobile phones and other handheld devices, are becoming more widely used by consumers, causing an influx of research and development into these areas, she added.

The Philippine software industry is growing at a sustained double-digit pace. In 2011, it grew 37 percent over the previous year and generated total revenue of US$993 million.

It is also among the fastest growing outsourcing sectors in the country, reporting a manpower growth of nearly 50,000 full-time employees last year.

Citing another report by research firm Gartner, Terrado said the Philippines can still compete against other countries that are offering software services, such as Vietnam, Ukraine, Argentina, and Chile largely because these countries are overcome by several challenges.

Among these are low wage rates, high employee attrition rates, visa issues, and increased financial and governance vendor scrutiny, among others.

“The countries that will overcome these hurdles will be the ones who will emerge to be more successful. The Philippines continues to surpass these concerns and we could emerge as among the most viable locations for outsourced software services,” Terrado said.

The IT executive added that there are certain trends in the information technology outsourcing (ITO) landscape that the software industry sector in the Philippines can take advantage of. For one, offshore clients are becoming smarter and are demanding more value-added services from their providers. 

This leads to bundling of services that provides customers with a broad range of selections that will allow them to choose one vendor for most, if not all, of their outsourcing needs.

In particular, cloud computing and mobile data are among the new platforms where software development and service provisioning are occurring at a rapid pace. This entails some new learning for software developers and applications providers to be assured of a place in the global software services industry.

“We see platforms being used as a base for IT-based service offerings are not just labor-intensive but IT-intensive. And technology is shifting as the trend now is moving towards more mature cloud computing and mobility.”

But Terrado said that, while the Philippines is enjoying unbridled positive perception from the global market, it does not mean industry players should stay complacent.

Software companies, according to her, must still focus on competitiveness, enhancing market share and positioning, develop better talent, and build a cooperative network among relevant stakeholders.

Emphasizing the need to innovate and improve its services delivery models, she said, “software companies also need to provide greater, if not the best offerings that will compel companies to choose them over providers from other countries. Value-added services that enable customers to become better providers create brand loyalty, as well as draw attention from other would-be customers.” 

“The Philippines is already in a leading position in the global sourcing market. To retain its position, the country’s software companies must anticipate, envision, maintain flexibility, think strategically, and make changes to create or sustain a viable future for the industry and the country,” she added.

Terrado said that PSIA targets to provide software services to other source geographies identified by the Everest report, which includes Canada, Australia, the United Kingdom, Norway, Sweden, Finland, France, Italy, and Germany.