TechFocusOutsourcing
Golden opportunities for local companies
Programmers engrossed in software development at different local software companies. Manpower is Bangladesh's biggest strength and it should be properly utilised to flourish industries such as ICT.
The landscape of the local ICT industry is systematically changing day by day. The government's proactive role, public private partnership and foreign investment are the underlying reasons for the progressive move of native ICT industry. But nowadays the sustainable development of the ICT industry totally depends on the amount of business it draws from the global market. In this regard, the role of outsourcing is invaluable to expedite the overall development process and at the same time give a boost to national economy. Bangladesh has nearly all the ingredients to become a unique outsourcing destination in this region. According to Basis (Bangladesh Software Information Services) nearly 500 software and ITES (Information Technology Enabled Services) companies are operational in this country. Among them, 100 companies currently export their products to more than 30 countries. A majority of the clients of Bangladeshi companies are in North America, EU countries, East Asian countries and Japan. The size of the local IT market is USD 300 million, of which software and ITES industry has 29 percent share and remaining 61 percent belongs to hardware/network services. In 2007, the value of exported software and ITES from Bangladesh reached USD 27 million. Although these figures are not massive compared to the neighbouring countries, Bangladesh has several success stories that, in effect, energised the entire IT industry to line-up with the global competitors. GraphicPeople, a software company, achieved resounding success in work with Danish companies. The Danish communication house PeopleGroup founded this company in 2004. Since then, this company has offered cost-effective service without sacrificing the quality. The service portfolio of this company includes full range Desktop Publishing or DTP solutions that mainly encompass brochure, catalogues, magazines, advertisements, POS/POP, web-banners, direct mailers, postcards, flyers, folders, newsletters, promotional publications and packaging etc. Another software development company is Visual Magic Corporation (VMC), that is presently working with a Japanese IT company to develop algorithms, applications, solutions and products for patented "Dot Pattern Technology (DPT)". DPT is a kind of technology that allows an input device to read information from the specially printed books, magazines, catalogues etc. VMC offers various offshore relationship models for software development, embedded programming and hardware device development companies to start and build an outsourcing partnership. VMC is also working with Polygon Magic Inc. a Japan-based video game development company that is providing services on 3DCG since 1996. In addition, VMC is also involved in the development process of a 3D game engine for Xbox and PS2 with Polygon Magic since 2003. eGeneration is a software services company with tested and matured software development processes like eGen SDP, CMMI, ISO and RUP. With its comprehensive understanding of diverse business verticals and wide resources, eGeneration mobilises the right people, skills, and technologies to help organisations enhance its performance and transform cost burdens into competitive business assets. BJIT (Bangladesh Japan Information Technology) Limited is also playing a significant role in outsourcing activities. BIJT offers services such as software development, software testing, CAD/CAE and technology consulting for its clients. So far, BJIT has successfully completed more than one hundred software projects and proved its expertise in embedded software development. Outsourcing services provided by Bangladeshi companies are offshore software development (business applications, web services, games, cell phone applications, embedded software, VLSI etc), animation (2D & 3D-cartoon, web publication, advertisement, 3D modelling), IT enabled services (GIS, CAD/CAE, architectural visualisation, network maintenance, desktop publication, document conversion), BPO (call centre, e-accounting, HR/payroll), software testing and verification service etc. Global outsourcing market has a tremendous growth rate. XMG a market analysis firm appraised that the size of the global outsourcing market was USD 297 billion in 2007 with a growth rate of 19.31 percent, and forecast that it would reach USD 450 billion by 2010. Bangladesh can grab a significant portion of the global market if it successfully mobilise its resources and takes proper decision at the right time. Habibullah N Karim, president, Basis told StarTech said: "We need a good telecommunication infrastructure including uninterrupted power supply to leverage outsourcing activities in the country. On the other hand sufficient IT educated human resource is an important consideration to deliver best quality service to our foreign clients." TIM Nurul Kabir, chief executive officer (CEO), Spinnovation said, "There is acute demand for skilled human resources in Europe and the USA. Only European countries require near about 6 million IT skilled people. It is a great opportunity for Bangladesh. So time has come to utilise this opportunity and mobilise resources to make this land into a unique outsourcing destination." Asia's prominent outsourcing destinations are India, China, Philippines and Malaysia. In 2007, Indian outsourcing market reached at USD 34.1 billion at 29.5% CAGR. India will claim an estimated 11.5% share of the global market. XMG estimates India will continue to lead the offshore segment through 2010 with at least 15% share. Chinese outsourcing market reached at USD 13.1 billion at 47.9% CAGR by the end of 2008. China is on track to have a 4.4% share of the global market, based on 2007 total revenue figures forecasted. In 2007, Philippines outsourcing market reached at USD 4.1 billion and it has 1.4% of the global market share, whereas Malaysia is estimated to finish the year at US $3.6 billion, achieving 1.2% of the global market share. The government can think of building up an "outsourcing zone" where foreign companies will shift their offshore development centres. This specialized area will be dedicated only for the outsourcing companies and it will incorporate modern technological facilities including uninterrupted power supply. This outsourcing zone can follow EPZ operational model to offer services. Foreign companies can enjoy tax holiday for a certain period to kick-start their business. This initiative also generates huge employment opportunity for the IT graduates.
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