Skills Development in IT-BPM Sector: Learning new languages and big data analytics

(Part 2)

In the Philippine IT-BPM Sector Roadmap 2022 (there has since been a new roadmap prepared for the duration of the Marcos Jr. Administration), there was already an advisory that the rapidly changing technological trends faced by the sector will result in two opposing forces upon the growth potential and services mix for the information technology and business process management (IT-BPM) industry in the coming years. These forces were iden-tified as: a.) Augmented growth driven by opportunities from new-enabled services that can be offered by the IT-BPM sector; and, b.) Dampened growth due to the automation and streamlining of some services. We have al-ready given examples of both trends in the first article of this series.

As regards augmented growth of the functions or services supported by IT-BPM, we have seen how the outsourcing market continues to grow, as in the case of the EU considering the Philippines for outsourcing their IT-BPM services, thus competing with the North American enterprises. We also saw how many new advanced services are being offered by the sector, such as AI and Big Data. As regards potential dampening of roles due to automation, low-skilled jobs, especially in the contact center sector, are being made redundant through automation. However, for more complex job categories, rather than sheer replacement, there is ample opportunity for upskilling and reskilling.

Based on a paper by two researchers from the Massachusetts Institute of Management (MIT), the 2022 Roadmap used a specific approach to understand the current task/role distribution of the IT-BPM services provided in the Philippines. The approach involved identifying several service categories across five IT-BPM subsectors, and three mutually exclusive categories of skill-based roles were defined. These were:

Low-skilled tasks/roles: Simple entry-level, process-driven tasks that require little abstract thinking or autonomy.

Mid-skilled tasks/role: Complicated tasks that require experience, abstract thinking, and situational response.

High-skilled tasks/roles: Complicated tasks that require specialized expertise, abstract thinking, and autonomy.

In a survey conducted among IT-BPM operators in the Philippines, it was discovered that roughly 45.8% of the IT-BPM workforce in the Philippines in 2016 were involved in low-skilled roles, 39.4% in mid-skilled roles, while 14.7% were working in high-end roles. This distribution of skills is generally aligned with the global IT-BPM sector, except for a slight skew in favor of mid-skilled roles in the Philippines. This can be attributed to the service mix of contact centers (which carried the highest weight by service type) in the Philippines. The Philippines has a competitive advantage in contact services because of its strong base of service-oriented talent (soft skills), affinity to Western (especially US) cultures and established base of BPM operators.

Let me add here that educated Filipinos have a great facility in learning foreign languages, compared to their Asian neighbors, because of the multilingual environment in which they live. Millions of Filipinos who have had at least a high school education have been exposed from childhood to at least three languages on the average, i.e., English, Filipino, and, for the majority outside the Tagalog-speaking regions, to the other languages like Cebuano, Ilocano, Ilonggo, Waray, etc. (these are not dialects but separate languages, more different from one another than Spanish, French, Italian, and Portuguese are different from one another). It is maintained by linguists that those who from childhood have been exposed to different sounds of several languages have greater facility in learning foreign languages than those who have been monolingual during their growing years, such as White Anglo-Saxon Americans. Thus, it will not be difficult for future generations of Filipinos to start servicing the IT-BPM needs of countries in the EU and in Northeast Asia who will surely have labor shortages as their very low fertility rates result in rapidly ageing populations and a lack of young workers.

For this reason, part of the reskilling and retooling efforts of the IT-BPM industry should be the offering of foreign language courses to the employees, especially Spanish, French, German, Japanese, and Mandarin. Already there are manpower recruiting agencies focused on the OFW sector offering these language courses. The experience of some of them, especially among nurses and caregivers, is that Filipino educated workers can learn the fundamentals to speak a foreign language in three months of intensive daily classes in a sort of language “boot camp.”

With its leadership position in the customer service sector (even surpassing India that has a population 10 times that of the Philippines), the country has been attracting a basket of contact center services that are relatively more complex (e.g., in the banking and utility sectors, simple calls would be ones servicing requests on information — such as inquiries on account balances, payment due dates for credit cards and the like; while complex calls could deal with management of complaints and the provision of solutions). For this reason, those who work for contact centers in the Philippines are classified under mid-skilled and are less likely to be completely replaced by AI or robots.

In the 2022 Roadmap, it was found that the propensity to automate is likely to be greater in low-skill-enabled, transactional service roles that are easier for computers, applying even simple constructs of AI and Robotics Pro-cess Automation (RPA) to emulate. It was estimated that in the subsequent three years, one out of three low-skilled IT-BPM tasks have a 40% to 60% likelihood of automation. With further development and willingness to adopt new technologies on the back of established use cases, automation is likely to go up to 80%.

As regards higher-skilled roles, as in game development, animation, system integration services, and infrastructure services, more complex forms of automation enabled through technologies like machine learning and natural lan-guage processing will take effect to replace or augment human jobs.

The dampening effect for mid-skilled roles is expected to be lower while for high-skilled roles, in addition to a lower extent of automation, a greater time lag is estimated. Among those with the highest propensity to be au-tomated are: Medical transcription, simple contact center services (many are already being handled via IVR systems), basic 2D animation services, parts of IT technical support and transactional mid- and back-office processes.

To the millennials and centennials (young professionals still in their twenties or thirties), my advice is for them to consider specializing in the IT needs of the expanding health sector and big data analytics. The evolution of the healthcare industry towards “connected wealth” will be experienced across the entire value chain and business processes. There will be changes in the ways health organizations operate, i.e., from a standalone set-up to more distributed, cloud-connected establishments. The IT-BPM sector is likely to emerge as the key enabler of connected healthcare through the provision of services and intelligence layers riding on core medical products. New service offerings include clini-cal data analytics, remote care enabled through m-health, and unlocking efficiencies in information processing and administrative services.

Considered to be low to non-existent across many business functions at the end of the first decade of this century, big data analytics has seen an almost explosive increase in demand in the last five years. The need for vital health-related information during the pandemic contributed to greater awareness among business, government, and civil society organizations about the value of analyzed data.

As an anecdotical illustration, the first realization that Secretary of Agriculture Francis Tiu Laurel had upon assuming office, was the lack of reliable data on the agricultural sector. His first priority was to build an accurate da-tabase on which to formulate more enlightened policies for the increase of agricultural (and aquacultural) productivity.

Emerging applications of big data analytics have driven dramatic changes across functional areas and have provided opportunities for cost reductions and strategic advantages. This is opening up opportunities across many functions currently serviced by the IT-BPM sector, especially in the areas of customer services, finance, and accounting, and also draw newer functions such as in engineering, design, and supply chain management into its realm. Already as large conglomerates are finally investing large sums of money into food security, this sector, which accounts for some 30% of GDP, will increasingly have need for IT-BPM services. Such enablement of technologically

driven services will inevitably require high-end (and more specialized) skill sets and know-how.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.