IT-BPM industry counting on AI to defend global market share

By Justine Irish D. Tabile, Reporter

The information technology and business process management (IT-BPM) industry views artificial intelligence (AI) as an opportunity to maintain its position among the world’s top outsourcing destinations.

“We can’t stop it obviously, and we don’t want to stop it because it could be the biggest opportunity for us as we are a leader,” IT-BPM Association of the Philippines (IBPAP) President Jonathan R. Madrid told BusinessWorld.

He said the opportunity offered by AI lies in helping average-performing agents increase their overall productivity.

Citing an internal industry survey, he said member firms reported that the integration of AI in their processes has resulted in improved efficiency, overall productivity gains, and customer satisfaction.

“What that means is it has raised the standard of agent performance. The way AI improves our processes is by making an agent faster with more data, which allows the agent to deliver resolutions faster than before,” he said.

“This is really where the majority of the benefits we see from AI are. We don’t really see AI disrupting the industry or jobs significantly at this point. We see it as augmenting the work that we do,” he added.

He said the result is that IT-BPM companies end up processing more queries faster.

“That should result in better cost optimization since agents become more productive. If that trend continues, then it makes sense that at some point in time when demand and supply are better matched, there will be some plateauing of the number of jobs,” he added.

On the client side, he said there is an expectation of AI integration leading to better cost optimization.

“I would think that when they negotiate their contracts with our members, they will be expecting these higher efficiencies to be part of their performance metrics,” he added.

Philippine AI Business Association (PAIBA) Director for AI Ethics & Data Governance Dominic Vincent D. Ligot said that AI plays a “pivotal” role in sustaining the IT-BPM industry’s competitive advantage.

“Other markets are also accelerating their digital transformation, and AI is increasingly tied to higher productivity, client satisfaction, and operational value,” he said via Viber.

“Through robust governance and client-centric AI solutions, the Philippines can retain its status as a trusted IT-BPM destination in a very competitive market,” he added.

He said maintaining leadership will depend on rapid adoption of intelligent automation, continuous upskilling, and emphasizing innovation, ethics, and quality.

“AI is reshaping the sector, demanding rapid workforce transformation, and creating new areas of value,” he said.

“The readiness of the workforce will depend on urgent, broad-based efforts in education, reskilling, and regulation. AI, when integrated strategically and ethically, will help maintain the country’s position as a global leader in IT-BPM,” he added.

Contact Centers Association of the Philippines (CCAP) President Haidee C. Enriquez said that AI, particularly for the contact center and business process management (CC-BPM) segment of the industry, is a catalyst for growth.

“It allows the Philippines to move up the value chain by offering services that are more complex, more human, and more valuable,” she told BusinessWorld in an e-mail.

“Our people, who are known for their empathy, adaptability, and English fluency, are exactly what global companies need in an AI-augmented world,” she added.

She said that the rise of AI should not be seen as a threat to be feared but as a tool to be harnessed.

“At the heart of it, this is about creating better jobs and long-term careers in a tech-driven future. The CC-BPM sector is at a crucial point,” she said.

“With deliberate planning, a human-centered approach to AI, and strong public-private partnerships, the Philippines is poised to remain the global leader in customer experience,” she added.

She said the Philippines leads in voice-based customer experience services, holding over 40% of the market by headcount.

“This confirms our unmatched strength in delivering world-class customer care,” she added.

Fusion CX Co-Founder, Chairman, Managing Director, and Chief Executive Officer Pankaj Dhanuka said the Philippines needs to adopt AI faster to maintain its position.

“My advice to all the associations and the industry leaders is to promote adoption of AI, instead of ignoring it. Faster adoption will help the Philippines further grow the IT-BPM industry,” Mr. Dhanuka told BusinessWorld.

“AI per se will impact, but it will impact in a positive way. It will help humans to improve their productivity, train faster, make them more accurate, and improve the quality of their service,” he added.

SyCip Gorres Velayo & Co. (SGV) Technology Consulting Principal Lee Carlo B. Abadia said that since the Philippines already is known for outsourcing, it should further market the country as an AI destination.

“We already have that advantage of connections abroad. We just need to make sure that part of our repertoire in technology is data and analytics and AI. You need to make it the default, not side training,” Mr. Abadia told BusinessWorld.

“Since we have the network, then we focus on the training, we should be able to use that advantage to secure the market (position of) the Philippines as an AI destination. I think that’s also the dream of IBPAP as well. That’s why they’re doing agentic AI processes,” he added.

As of mid-2024, 56% of IBPAP member organizations said that they are actively implementing AI initiatives, with 11% reporting full implementation.

Meanwhile, Ms. Enriquez said that a recent survey among CCAP member companies revealed that all of the respondents are using AI in their operations.

These include intelligent virtual agents and chatbots being used to handle basic queries, agent assist tools being used for live support, and speech analytics and sentiment analysis employed in identifying customer pain points.

“These tools are already being used in many major hubs like Metro Manila and Cebu to empower frontline teams and elevate customer experience,” she added.

AI REPLACING TASKS, NOT JOBS
According to Mr. Madrid, the IBPAP survey revealed that 8% of the firms saw a reduction in headcount, while 13% saw an increase, reflecting how AI is reshaping workforce dynamics in the industry.

“So, while those jobs that the 8% corresponded to may have been affected. I believe that most of them, if not all, were redeployed to higher-value jobs. And that’s really what the industry wants to happen; we want higher value,” he said.

“The way that we’re going to measure our performance as an industry is by capability, by skill, rather than counting the number of jobs. What we want to grow more is revenue. That’s why we really want the higher-value jobs,” he added.

The industry’s goal for the year is a 5% increase in revenue to $40 billion and at least a 4% increase in staffing to 1.9 million.

He noted a stronger focus in the industry on global capability centers.

“Those tend to provide higher value, higher revenue, and actually less attrition than the traditional business process outsourcing business,” he said.

“Simple tasks that are, I would say, repetitive will be the first (to be phased out) and rightfully so. I really believe that tasks that are automatable should be automated. Especially now that we still continue to have more demand than supply of employable talent,” he added.

However, Mr. Madrid said that though the Philippines is keeping up with technology, the industry still faces a talent and skills gap.

“We are a world leader in IT-BPM. What we do drives a big part of the global industry. All the big players are here. I think whatever they do globally, they will need to deploy here in the Philippines, so I would say we are at the very least keeping up with technology,” he said.

“What we should be monitoring is really the quality of our talent. This is a very human capital-intensive industry, and with the expected changes in types of work, job functions, and processes, we need to prepare our people with better skills,” he added.

He said IBPAP members on average only hire 15-20% of the people they interview, which means 80-85 out of every 100 who get interviewed do not get the job they apply for.

“That’s a big concern, because those are job opportunities. When we ask our members why that is, most of the reasons for somebody not getting hired are communication or comprehension-related,” he said.

“Now, whether it’s banking, telecom, or healthcare, these are the fundamental problems. I think that’s what we should focus on,” he added.

PAIBA’s Mr. Ligot said that while job losses are a concern, AI’s main impact on the IT-BPM workforce has been “transformational rather than eliminative.”

“The workforce is at a turning point; reskilling and upskilling are urgently needed to keep pace with AI-driven workplace transformation,” he said. 

“The main challenges cited are a skills gap in advanced digital disciplines like AI, data analytics, and programming. Multiple studies highlight the critical need for workforce reskilling; 26% of firms see it as a primary challenge,” he added.

In the IBPAP survey, 26% of firms cited the need for significant reskilling, while 24% said they have experienced role shifts, indicating that “AI is more likely to augment and transform jobs rather than eliminate them.”

CCAP’s Ms. Enriquez said AI has significantly reshaped workforce planning, with routine jobs like data entry and simple transactions now being automated.

“But this shift is also opening up new, higher-value roles — those that require problem-solving, emotional intelligence, and digital skills,” she said.

“We now see more roles focused on data analysis, supervising AI systems, and delivering personalized customer experiences,” she added.

However, she said that such a transformation requires heavy investment in upskilling, reskilling, and cross-skilling programs.

At Fusion CX, Mr. Dhanuka said though AI helps in automating processes that were previously manual, humans are still needed to ensure the processes are working effectively.

“The balance part has to be done by a human. And humans will be able to do it better,” he added.

He said though AI can fulfill its promise in a controlled environment, it is less capable in real life.

“When the actual interactions are happening in our world, AI tools don’t work to the effectivity that they are claiming,” he added.

He said that a voice bot cannot perform as well when its conversations with clients are accompanied by television or other types of background noise, including children.

“I don’t see any foreseeable future that AI will be able to overcome that, and at such instances where AI does garbage output, customer confidence and trust in AI will go down. Where AI will function very well is in hybrid situations,” he added.

SGV’s Mr. Abadia said that AI is not replacing jobs but tasks, which are just a subset of a particular job.

“What happens is you have to streamline common tasks around a horizontal space and use data analytics or AI to automate that part,” he said.

He cited the need for staff to do data and analytics work, because aside from using technology to analyze trends and data, they become the operators of it.

“The principle we want to establish within the IT-BPM industry is the need for the ‘human in the loop.’ When you design tech automation, it must make sure to run the manual task, make it stop at one point, and have an actual person do a sense check of the output,” he said.

“My thinking is instead of replacing jobs, you free up capacity to accommodate new kinds of services within IT-BPM,” he added.

However, he said some jobs will be replaced, especially those dealing with menial tasks on a day-to-day basis.

“The encouragement is for people doing that right now to proactively upskill themselves. And as they demonstrate that within their organization, they are future-proofing their career,” he said.

“Again, there’s going to be a replacement, but it shouldn’t be that significant. It’s really more about freeing capacity,” he added.

INTERVENTIONS NEEDED
IBPAP’s Mr. Madrid said the talent base must be upskilled and reskilled, especially in the areas of comprehension and domain skills.

“I think the most important category, especially in working with AI, is really strengthening our level of comprehension. We’re dealing with the problems of our customers. We need better comprehension to better understand and analyze what these problems are,” he said.

“The other category, I would say, is domain skills. We all know that there is a shortage of nurses, accountants, and analysts. So, whatever the domain or sector is, we should double down on those specific domains,” he added.

However, he said upskilling should not just be the responsibility of government and the private sector, but also of any individual.

“We must protect our market share, so it is important to ensure that our existing workforce and the future generation of the digital workforce is upskilled and reskilled and our curriculum across our university system is updated to meet the new work types of the future,” he said.

“We really need to work on those fundamental qualitative skills… and I think taking personal responsibility for your upskilling and education is important. We cannot expect the government, the schools, and the private sector to do everything,” he added.

SGV’s Mr. Abadia said the government’s National AI Strategy Roadmap (NAISR) 2.0 is a step in the right direction.

“I think it’s really great that we already had the Department of Trade and Industry put up the NAISR. What the private sector can do is to look at the seven imperatives in that roadmap, and then wherever their specialty is, they should really reach out to that agency,” he said.

He said the NAISR’s seven strategic imperatives include building a robust connected and networked environment, improving data access and data value extraction, transforming education and nurturing future AI talent, and upskilling and reskilling the workforce.

The other imperatives are to master and push the boundaries of AI, accelerate innovation with AI, and build an AI ecosystem “conscience.”

PAIBA’s Mr. Ligot said that aside from building out the NAISR, the government can also help the IT-BPM industry invest in digital and AI skills development and champion ethical AI use and governance.

In particular, he cited the need to support education and training programs for AI, data science, and analytics to future-proof the workforce.

He called for public-private partnerships such as “collaboration among schools, industry, and government for relevant skills training and curriculum modernization.”

The government must also address infrastructure and cost barriers to make AI adoption more accessible to small firms.

These can be through incentives and infrastructure investment, he said.

CCAP’s Ms. Enriquez said the industry needs strong government support to keep pace with AI.

In particular, she said the government should expand measures like the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and the Enterprise-Based Education and Training (EBET) Law.

“We also need deeper partnerships with academia to develop future-ready talent and joint investments in workforce training,” she said.

“Finally, modernizing our infrastructure and data policy frameworks will be critical to support scalable and ethical AI integration,” she added.

On regulation, Fusion CX’s Mr. Dhanuka said that he doesn’t think any law is required addressing the use of AI from a customer experience perspective.

“As of now, I don’t think any law is required. Maybe, overall, AI law is required because we are seeing some bad things happening using AI… but when it comes to our industry, whatever we are doing in AI and machine learning, it’s all positive, so regulation is not needed,” he said.

“But if the overall AI regulation comes, we may also get impacted… I think all governments and society are waking up to this idea that there is a potential for misuse of AI, so something may come. As and when it comes, we will be ready to adapt and comply with those regulations,” he added.

Fusion CX Chief Marketing and Strategy Officer Manish Jain said more than regulation, he said the government must invest more in AI.

“For instance, in India, every major university has an incubation lab today doing stuff and creating tech. Rather than losing the message in regulation, I think the opportunity right now is to invest and lead,” he said.

“AI has a lot of positives. It is good to embrace the positives, rather than look at the negatives,” he added.

Mr. Dhanuka said that the government should regulate when needed. “Regulation is not bad. But think more of investing than just regulating.”