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The Information Economy

Bangladesh, despite being ranked among less developed countries, has been a pioneer in reaching out to the larger population through technology. Mobile phone penetration has been among one of the highest in the developing economies with a teledensity of over 40%.5 The internet penetration rate is estimated to be at 7% – with most people using mobile internet.6 The use of international bandwidth has risen 200% in 3 years to 2011 with capacity upgrades for international bandwidth of over 500% underway into 2012/13.7 The “Digital Bangladesh” program of the government has initiated the process of e-services for government service delivery and capacity building for the population at large. As in December 2011 , Bangladesh had over 2.1 million Facebook users.8

Over 600,000 computers (including laptops) were sold in Bangladesh in 2010, with estimates of around 3 million laptops/PC being available in the country.

 

The IT/ITeS industry in Bangladesh

The IT/ITeS sector in Bangladesh is over three decades old and has been catering to established clients both globally and in the domestic market. Most players initially targeted the IT potential in the domestic industry. The DANIDA aid program in 2003 was a major booster to the nascent homegrown industry, and enhanced access to Scandinavian markets created the first wave of IT companies serving global markets in Bangladesh. Many of these companies have now successfully extended their geographical reach to other regions like Europe and US. During the latter half of the last decade, the services sector (primarily BFSI and Telecom) in Bangladesh grew phenomenally. This led to a robust growth in the domestic IT /ITeS services demand, and currently the industry clocks almost twice the revenue from domestic IT services sector against the IT/ITeS exports. The growth of domestic industry has spurred a growth in the functional and technical knowledge of the resources – with deep domain understanding in the BFSI and Telecom sectors.

A lot of product based companies have also picked up steam to cater to the demands of the local and regional industry. Currently there are over 800 IT and Non-Voice ITeS companies in Bangladesh, out of which around 200 work on a global basis for outsourcing and project based delivery models.1
The availability of trained manpower at competitive prices – and well-established delivery capabilities, has led to many global players looking at Bangladesh for captive development centers in recent times. Notable among them is Samsung (having set up a 250 person R&D center with aggressive growth plans), VizRT (Acquiring product companies from Bangladesh and building scale) and media giant WPP (buying into GraphicPeople and developing it into a global delivery location).

In the recent years, Voice based BPO services are also evolving in Bangladesh. Bangladesh Call Center and Outsourcing (BACCO) – an association with over 70 members- claims over 15000 agents are working in the sector. Though small in comparison to IT services, these BPO services have clocked over 2 million USD in revenue in 2010, and are growing fast.2 WorldBridge Global- a US based outsourcer has expressed interest in setting up BPO operations with around 10000 seats in Bangladesh with a proposed investment of USD 150 million.3

 

Outsourcing the Bangladesh way

The development of Bangladesh’s outsourcing business has important implications for global customers seeking to explore it as a new destination for outsourcing work. Decision makers primarily judge outsourcing locations by cost, availability of skills and manpower, both current and future, and across all these areas, Bangladesh scores well.
Most of the work done by the Bangladeshi outsourcing pioneers comprises low- value add jobs such as graphics design and website development. Some companies also work on product development, mobile application development and software development. However, today many global companies – once clients of these pioneers, have bought into them, and are using them for mid range software and IT outsourcing projects. Companies like VizRT (Norway), Bording Data (Denmark) and WPP (Graphicpeople) are examples.

The Bangladeshi companies provide the parents with a range of services from back office administrative work, graphic designing, DTP and customer service requests, to high-end IT, product development and enhancement jobs. In recent years there has been a move towards Business Process Outsourcing also – a trend which will further strengthen with enhanced connectivity and bandwidth. “Hardworking resources, not shy to learn – at a fraction of European costs, there is huge talent pool in Bangladesh- they just need the opportunity ” says Hasan Fatheme, Executive Director of Nordic Chamber of Commerce and Industry in Bangladesh – the industry body of Nordic Businesses in Bangladesh which includes 11 IT/ITeS companies as its members.

Quality improvements in skill levels and delivery capabilities have been steady. Many of Bangladeshi outsourcing vendors have got certifications in CMM level 3 or higher over the last 3 years. Also, a few companies got themselves certified to robust information security processes by getting ISO:27001 certified.
Owing to a huge domestic market in BFSI and telecom sectors, Bangladeshi vendors have also advanced to offering specific business knowledge in areas such as Core Banking solutions, Micro credit solutions, Islamic Banking and Mobile application development and deployment. Such insights create closer links between vendor and client, resulting in higher productivity and profitability for both. In addition, Bangladeshi companies are working extensively on Desktop Publishing, Graphic design and content development for web applications.

Bangladesh at present is more suited for less complex projects such as website development, mobile content development, back office software development, 2D/3D animation, desktop publications and call centers.

Source: KPMG Report “Bangladesh Beckons” Jan 2012 (click to download)

 

Meet in Germany – German-Bangladeshi IT-Outsourcing Meeting

On December 11th a German-Bangladeshi-IT-Outsourcing meeting will take place in Berlin. Business and IT professionals from German companies will have the opportunity to meet in an independent environment with leading Bangladeshi IT- & business-service providers to learn more about the IT industry in Bangladesh and to discuss requirements, conditions and potential partnerships.

Date: 11.12.2012
Location: Berlin, Building of the Bundespressekonferenz
Fee: free of charge
Places: 25

> Anmeldung (kostenlos)

> Einladung (Deutsch / PDF)

 

 


Wenn Sie Interesse an mehr Informationen zum Thema Bangladesch-IT und Business Services haben, können Sie hier den KPMG Report sowie die Exporter Datenbank (pdf) herunterladen. Bei Fragen senden Sie bitte ein E-Mail an den Outsourcing Verband: office@outsourcing-verband.org

 

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