New report: Bangladesh beckons - an emerging destination for IT/ITeS outsourcing
Global IT outsourcing industry has been growing steadily in the last decade. The current global economic crisis has led to shrinking IT budgets for corporates, but there has been a continual growth in demand for global sourcing of IT services, with cost optimization being the primary driver for offshoring services. The increasing cost pressures, with new service delivery paradigms like cloud computing and multiple sourcing, is set to transform the outsourcing industry globally.
Over recent years, Bangladesh has made major strides in laying the groundwork for a diverse and successful outsourcing market. The IT services industry within Bangladesh has been growing serving international clients and domestic clients in the banking and telecom sectors. The industry now employs over 20,000 people, and is exporting services to European, North American and East Asian clients. Bangladesh’s emerging outsourcing players already have strong credentials. The Bangladeshi freelancer community has further supplemented the IT exports by close to US$7 million in 2010 - with Bangladesh appearing consistently in top freelance work locations on sites like oDesk and eLance amongst others.
Bangladesh offers a vast pool of young, trained and English speaking resources – available at costs almost 40% lower than established destinations like India and Philippines. Government authorities have demonstrated a determination to promote IT services industry in the country – providing cheaper bandwidth and alternate international cables, setting up Technology parks and providing tax holidays for export oriented industries. The “Digital Bangladesh” initiative of the government is helping setup infrastructure for enhanced connectivity, ICT based citizen service delivery and ICT based education system. There is evidence of many global players, like Samsung, AMD, VizRT, WorldBridge Global – setting up operations in Bangladesh.
For all the progress that has been made, this report illustrates some of the key challenges that still lie ahead. Many domestic business leaders recognize that the Bangladeshi outsourcing industry could better market its strengths to the international community. Also, negative perceptions about Bangladesh need to be countered. Additionally, the government needs to take a holistic approach towards promoting the IT/ITeS industry – including investment climate, taxation, remittances, legal framework and flexible working hours.
With today’s challenging economic conditions, more companies are looking at effective use of external providers to help them support and expand their operations. Bangladesh has positioned itself as a key location for consideration by enhancing delivery capability and skill availability, lower costs of operations, making focused investments in telecom and IT infrastructure, and highlighting success stories.
