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Outsourcing and Bangladesh |
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What is Outsourcing ?
Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees. Often the tasks that are outsourced could be performed by the company itself, but in many cases there are financial advantages that come from outsourcing. Many large companies now outsource jobs such as call center services, e-mail services, and payroll. These jobs are handled by separate companies that specialize in each service, and are often located overseas.
There are many reasons that companies outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money. Many of the companies that provide outsourcing services are able to do the work for considerably less money, as they don't have to provide benefits to their workers and have fewer overhead expenses to worry about. Depending on location, it may also be more affordable to outsource to companies located in different countries.
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Outsourcing and Bangladesh
Bangladesh has carved its place among the world's best destinations for IT outsourcing, largely thanks to its low cost, according to a study by a leading research and consulting firm.
Bangladesh usually offers an attractive cost proposition for the investors, as its low salary level and low-cost of living are ideal for jobs that are commoditised and have low risk, said the study conducted by Gartner in its annual listing of top countries for IT outsourcing globally. They also said “Bangladesh is an emerging country from an offshore location perspective, but ranks poorly in language, infrastructure and data and intellectual property security,” the research said.
“Although it offers a good cost proposition, the government has to address many issues such as education, infrastructure and data security or IP protection in order to propel the top ranks,” said Gartner, who has put Bangladesh on its list of top 30 destinations for global IT outsourcing for 2010-11.
This is the first time that Bangladesh has been listed in the top ranking by any global research company on IT outsourcing and has been placed on par with China, India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam in Asia. Bangladesh has debuted in the list along with eight other countries that have made it for the first time to the Top 30 of the Gartner ranking.
“The country offers an attractive cost proposition, given its low salary levels and low cost of living,” said the study, which took into account ten separate criteria for rating the individual destinations.
Bangladesh Association of Software and Information Services (BASIS) estimates there are about 15,000 freelancers doing outsourced work for technology companies from across the globe. The country also has about 500 registered IT outsourcing companies which collectively employ an additional 20,000 workers.
Compared with neighboring India, which accounts for about 55 percent of the US$3.4 trillion global market and employs 2.54 million people directly in the sector, Bangladesh is an outsourcing minnow.
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Future Opportunity for Bangladesh.
Bangladesh began developing outsourcing sector in 2004 and it is now worth about US$120 million. The country exported about US$36 million worth of IT services last year, according to BASIS figures. As outsourcing costs are gradually rising in the countries like India, China and Philippine, Bangladesh can capture the market using low cost labor and other infrastructure
Bangladesh among best spots for IT outsourcing.
Last year , leading technology research company Gartner ranked Bangladesh for the first time in its annual list as one of its top 30 countries for IT services outsourcing for 2010-11 and thanks to its low costs and huge labor pool.
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The average wage of an outsourced IT sector employee is about US$8 per hour in Bangladesh compared with US$20 per hour in India and US$10 to US$15 an hour in the Philippines.
The government has declared that developing the IT outsourcing industry is to be a key priority, which fits with their ongoing campaign to create a “Digital Bangladesh” by 2020. Major challenges which must be addressed before the industry can flourish: Gartner gave Bangladesh a “poor” rating in three vital areas — infrastructure, language skills and data, and intellectual property security. |
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Bangladesh : Outsourcing Rating |
Criterian
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Rating
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Language Govt. Support Labour pool Infrastructure Educational Sustem Cost Political and Economic Environment Cultural Compatibility Global and Legal maturity Data and Intellectual Property Security and Privacy |
Poor Fair Fair Poor Fair Very good
Fair Fair Fair
Poor |
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Poor infrastructure, including frequent power crises and slow and unreliable Internet connections are the most immediate problems in this sector. 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.
Government Steps in this sector.
Bangladesh government has taken initiatives to build an ICT-driven nation comprising of knowledge-based society. In view of this, a country-wide ICT-infrastructure is being developed to ensure access to information by every citizen to facilitate empowerment of people and enhance democratic values and norms for sustainable economic development by using the infrastructure for human resources development, governance, e-commerce, banking, public utility services and all sorts of on-line ICT-enabled services. To achieve these, all required laws and policies are in place. Government has identified ICT as a thrust sector.
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