PH earned almost $1B from software services outsourcing in 2011

The software services outsourcing industry in the Philippines grew by 37 percent in 2011, generating some $993 million in revenues for the local software sector.

This is according to a recent study conducted by the Philippine Software Industry Association (PSIA), which also noted the industry’s 11-percent growth rate on employment or addition of about 50,000 information technology (IT) professionals in the workforce last year.

The nearly $1-billion revenues is attributed to an increase in demand from international clients eager to tap local firms for their specific IT and software requirements.

PSIA president Nora Terrado said improved utilization of the current talent pool enabled companies to increase efficiency and revenue per full-time employee (FTE), while close collaboration between industry players and the government in training fresh graduates and career switchers helped augment the much-needed technical workforce.

“With an increased demand for IT services in 2011, these trainees found themselves tapped into the IT mainstream services. This, coupled with process optimizations and innovation, improved the quality of the IT outsourcing revenue,” Terrado said in a statement.

Moreover, some local players are seen to be transitioning from full services to product development companies. Given this trend, PSIA has created a special interest group on product development (PD/SIG) which aims to help the local software development industry create and commercialize at least 10 globally recognized software products in various categories by 2016, each generating at least $1 million annually from offshore customers.

Country marketing also contributed to the revenue growth, the PSIA said. The industry group is active in participating in annual trade missions abroad such as the recently concluded Software Development Expo in Japan and the ongoing CeBIT in Australia and Microsoft World Partners Conference in the US.

Regular networking and business-matching sessions are also organized to promote a dynamic, as well as collaborative ecosystem in the sector, through membership meetings, inbound missions to maintain partnerships with neighboring countries such as Japan, Singapore, and Thailand, and regular dialogues with partners in the industry, academe, and the government.

According to Terrado, the sector is looking forward to achieving new opportunities as well as preparing for new challenges in the years ahead.

Among the areas of potential growth for the industry seen for 2012 are on application enhancement, maintenance and support, independent software testing, and remote infrastructure services.

The PSIA represents some 150 companies in the country engaged in software development and IT outsourcing, and is among the five independent organizations that make up the Business Processing Association of the Philippines (BPAP).

According to a BPAP report, the IT-BPO industry in the country is also gaining ground as revenues for 2011 reached an all-time high of $11 billion, 24-percent higher than the previous year with $8.9 billion.

Employees count has reached 638,319, up eight percent from 525,000 in 2010. The voice sector has the most people hired at 416,000 followed by the knowledge process outsourcing sector with 128,650 people.

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