Monday, July 23, 2012

Bangladesh as a Garden of Paradise for Outsourcing(Scope of outsourcing in Bangladesh)

  " The following observations will illustrate as to why Bangladesh can be a paradise for outsourcing"


Bangladesh has a large English- speaking (not by native but by knowledge acquisition) population; English is the medium of instruction in all major Universities. English is the foremost means of communication for the business transactions in Bangladesh. The globalization and the demand for smooth communication to keep abreast with others; English is becoming an incessant need of communication.Bangladesh is rich in human resource, with an estimated population of 150 million people; has a large and the fast promising pool of technical manpower. High availability of Computer literacy, English speaking and educated customer care professionals. Bangladesh has the lowest manpower cost. Manpower cost is approximately one tenth of what it is in West Europe and USA. The annual cost per agent in USA is approximately $40,000 while in Bangladesh it is around $4000.Notably, there has been noteworthy numbers of Private Universities registered in recent years offering various Degrees in Business & Technology in joint collaboration with reputed Foreign Universities from the U.S./ U.K./ Canada/ Australia. This has created a 'Standard' in the Under Graduate & Post Graduate Education System. In addition, the Secondary and Higher Secondary Education Board has been conducting Board Examination in English, besides the local language. Least to mention, there is an increasing trend of Students appearing for 'Ordinary' & 'Advance' Level Exams under Edexcel and Cambridge controlled by reputed Universities at London, this undoubtedly setting a global standard in their educational aptitude. 


 Bangladesh has a huge pool of talented ICT professionals. It is known as source of high quality and competitive labour force in regard to cost. Bangladesh is preparing itself to compete effectively in the global ICT market. As the demand for skilled manpower in ICT is growing world-wide, the country feels the need to produce a large number of ICT professionals. In the year 2002, 2,354 students from Public Universities and 1,625 Students from Private Universities have graduated in Computer Science. Universities, both in the public and private sectors are producing ICT graduates in four-year Computer Science and/or Engineering courses. Government is in the final stage to offer Diploma and Trade courses in ICT will in both public and private institutes including Polytechnics. 17 public and more than 45 private universities offer ICT courses.
                                                                             Knowledge in ICT is an asset to Bangladesh

This vast pool of educated workforce, all of whom can read write and understand spoken English is shaping a new industry in Bangladesh i.e. the information technology industry. Use of computers in Bangladesh as a research and data manipulation tool dates back more than 30 years. Today computers are widely used in offices, businesses, educational institutions, at home and in the filed. In one of the most progressive policy orientation towards IT of any nation on earth today, Bangladesh allows 100% duty-and-tax-free import of all computer hardware and software. The state provides many other fiscal and infra-structural facilities to accelerate the use of computers and the growth of the IT industry.
The IT industry is represented by two industry bodies, namely Bangladesh Association of Software and Information Services (BASIS) and Bangladesh Computer Samity (BCS). BASIS, established in 1998, is a relatively new industry association whose membership count stands at 34 today and is growing steadily. All major software development and data processing firms of the country are its members. BCS on the other hand was formed in 1988 and represents computer business firms in general; its membership stands at more than 100 today. All major hardware and software manufacturers such as Acer, Compaq, Dell, Digital, HP, IBM, ICL-Fujitsu, Microsoft, Novell, Oracle, SCO, Sun Microsystems, Unisys and others are represented for long in Bangladesh.
The size of the IT industry is estimated at around USD 150 million which is growing at more than 20% each year. The following pie chart will illustrate the contribution of IT sector in Outsourcing which is quite encouraging. This piechart will after 10 years illustrate a very big difference in IT’s contribution.

Among the major IT projects already done/undertaken in Bangladesh are:

  • Preparing a National Voter Database of 60 million people and producing computerized ID cards for each voter which successfully played a key role in the National Parliamentary Election 2008.
  • Implementing the computerized nationwide seat reservation and ticketing system for Bangladesh Railway. The system was completed in 1996 serves nearly one million passengers each month.
  • Preparing and administering the motor vehicles and drivers registration database. The nationwide system handles more than one million registrations/renewals each year. Establishing a National Data Bank. This on-going state-funded project started in 1995 plans to be the ultimate repository of all information of Bangladesh.
  • Establishing Bangladesh Computer Council. This state-sponsored statutory body formed in 1989, works to promote computerization in the country and provide all necessary assistance to the IT industry. It has been lately entrusted with the task of preparing a national IT policy and producing at least 10,000 IT professionals and trainers each year.
  • Supervisory Control and Data Acquisition (SCADA) systems. All national utility bodies (power, gas, telephony etc.) have implemented or are implementing SCADA systems over their national grid networks.
  • Securities exchanges automation. There are two stock exchanges in the country both of which have implemented automated securities trading systems in 1998. The Securities and Exchange Commission have undertaken the task of dematerializing securities and adopting an electronic central depository of securities within 1999.
  • DC10 spares inventory for Biman Bangladesh Airlines.
  • National pre-university examination system automation. The boards of secondary and higher secondary education process more than 30 million examination papers each year through the automated OMR based computer system.
  • Multimedia multilingual encyclopedia. This national projects started in 1997 when completed will have a multimedia and hard copy versions of encyclopedias in Bangla with English translation. The software and data processing industry in Bangladesh has had a successful track record of exporting to the USA and Europe for more than a decade now. The areas of competency of the IT industry in Bangladesh are as follows:
  • Web-page design and web-enable software development
    Multi-media design and publishing
    Alphanumeric data processing (from paper documents, scanned images and verbal recordings)
  • Relational database applications development. Front-end tools used are Visual BASIC, Developer 2000, Power Builder, Access, FoxPro and others. Back-end systems used are Oracle, Informix, Sybase, DB2 and others.
  • Human resources for the IT industry have been growing rapidly since the govt. declared this industry as a thrust sector and has embarked on a mission to make the industry a substantial part of the USD 36 Billion economy. The vital statistics for this sector are : More than 300,000 IT professionals are engaged in the industry. 
                   Reliability and Security
The work force is highly trustworthy and can convey world-class quality and ensure rapid delivery of service. Bangladeshi companies are also increasingly adapting to international quality and security standards.
Bangladesh is outfitted with well-connected telecommunication systems on a world-class scale. High availability of infrastructure resources – Submarine fiber, connectivity made possible quality and efficient voice and data communication.
Bangladesh's satellite-based telecommunication network enables almost instantaneous high-speed transfer of voice and data across the globe.

                                                 Infrastructure investments
Bangladesh didn't even have high-speed cable until two years ago, but the European Union's recent investment in technology infrastructure there has given rise to a wave of startups specializing in Web and software development.
Many of these ventures have ties to New York's growing Bangladeshi population—about 25,000, and the city's sixth-fastest-growing immigrant group, according to estimates based on 2000 U.S. Census data.
"The Bangladeshi diaspora is a big reason a lot of the offshore business is coming out of New York, just as it did with India about five years ago," says Baruch's Ms. Nahram. One such member of that diaspora, Sharef Ramed, launched Periscope Technology Solutions in 2004. To get a jump on the competition, he decided to have offices in both Manhattan and Dhaka.Mr. Ramed's network in the expatriate Bangladeshi business community here and his global contacts has helped Periscope grow from three accounts early on to 12 this year.But Bangladesh-based IT firms are finding plenty of clients here even without local connections. Web site developer Level 10 Solutions, which opened in Dhaka in 2003, has grown its business 30% in the past year and now has more than 200 U.S. clients. It gets a lot of business through New York-based partners like Bincode New Media.
"We have to do that because it's so hard to get U.S. visas," says Level 10 Chief Executive Rahman Maqsood. "But they are finding us anyway."
                              Legislative Framework
Encouraging and highly liberal Government policies on Call- center operations.
Sustain high cost-competitiveness in service sectors
Proactive Government - 3-5 years Tax holiday
Duty free import of capital machinery and software.

                                      Cost Benefits

As wages and other costs in India continue to escalate at rates as high as 15% a year, more New York companies are going next door to Bangladesh. The country may be known for having extreme poverty, horrific floods and a corrupt military government, but it also has a relatively high number of educated, skilled workers who speak English, work long hours and can design a killer Web page. 
"Bangladesh is definitely emerging as the next center for outsourcing," says Lilach Nachum, a professor at Baruch College's Zicklin School of Business. 
Wages in major Indian cities are still about a fifth of New York salaries, but the rupee has risen about 15% against the dollar in the past year. Real estate prices are also surging, taking a further bite out of the cost savings.
In Bangladesh, information technology staffers get $5 to $10 an hour, versus $10 to $20 in India. As a result, switching can reduce overhead by as much as half. Some Indian companies that get U.S. outsourcing business are moving their own work to Bangladesh, and their New York clients are happy to follow. 
"India is almost oversaturated, but Bangladesh is up-and-coming," observes Arman Rousta, co-founder and principal of Blueliner Marketing, a New York online-marketing consultant with operations in Dhaka, the capital. "People there are hungry.

                                               Time Zone

Advantage of time difference is also a big factor here, people from Europe/ America (for example) place order when they close their office and on the other hand office time starts in Bangladesh/ India and complete the job ASAP. So, the people are getting services while they are sleeping.

Not only that, Bangladesh/ India are also offering overnight services, that means that they are working 24 X 7 in three shifts just to provide quick/ best service. These things have made the clients amazed worldwide.

                                  Pro-Active Government
Bangladesh Telecommunications Regulatory Commission (BTRC), the telecom regulatory wing of the Government of Bangladesh has given a special thrust to the industry by reducing the prices of high-speed international private leased circuits. The recent IT boom has prompted the Government of Bangladesh to announce exemptions from income tax and customs for the exports of IT enabled services. The Government has put emphasis to set up state-of-the art infrastructure for IT enabled services. Private Internet gateways are in operation now. Foreign direct investments are now welcome in Call Center and telecom industry in Bangladesh.