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AI’s impact on the Philippine IT-BPM and office sectors

November 5, 2024 / By  

Several firms, particularly in the Information Technology and Business Process Management (IT-BPM) industry, are undergoing substantial changes with the rapid adoption of Artificial Intelligence (AI) in the workplace. This technological advancement is redefining operational strategies and workforce dynamics, potentially affecting the office landscape and future office space requirements.

The Information Technology and Business Process Association of the Philippines (IBPAP) revealed at the recent IT-Business Process Management (IT-BPM) Summit 2024 that approximately 67% of IT-BPM operations use AI, primarily in customer support, data input, and quality assurance. IBPAP expects a largely favorable impact, including increased productivity, operational efficiency, service quality, and revenue generation. Meanwhile, the impact of AI on employment varied as 13% of firms that adopted it reported an increase in headcount, while only 8% experienced a reduction in workforce. IBPAP expects the IT-BPM industry as a whole to generate about US$38 billion in revenue by 2024, with a headcount of 1.82 million employees.

The integration of AI in the IT-BPM industry may affect jobs susceptible to automation, potentially reducing the workforce and impacting future office space demand. However, integrating AI and other technologies is likely to generate new job opportunities, balancing job losses, and may also increase office space requirements to support these advancements. Furthermore, AI development may require more advanced data centers, and improved connectivity infrastructure, leading to higher building standards in office developments.

IBPAP added that talent and skills gap remain the primary challenge in the market, particularly in advanced digital skills such as AI, data analytics and programming. With the continuous integration of AI, firms are focusing on reskilling and upskilling their workforce to complement AI capabilities. This shift is creating a demand for training facilities and learning spaces within office environments. Traditional office spaces may evolve to include collaborative workshop spaces.

The AI revolution in the workplace, particularly in the IT-BPM industry, brings a new era of workplace dynamics, transforming conventional office space utilisation. Despite concerns about job automations, the overall outlook indicates a transformative rather than reductive impact on the workforce and office real estate. The office market is expected to adapt and stay dynamic as AI continues to advance.

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