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Tuesday 25, Jul, 2017 | DHAKA Time: 06:39 AM
Why Bangladesh won't turn IT/ICT sector as a vibrant industry when scopes are there?
Starting from early 80s when British Airways initiated its back-office operations at New Delhi, American Express's back-office operations during 1985-86 and GE'sIndian outsourcing adventure in 1990; the humble beginning of IT Outsource has turned itself up into a huge operational Tsunami in India by 2012.IT outsource process is now a formidable industry contributing 7% to Indian GDP.

By contrast, although Bangladesh is a geo-political neighbor to India, although people are shaped by same mental-map sharing most common traits like merit, tenacity, zeal to learn new knowledge and absorb changes; although our socio-cultural norms are historically developed on the shores of same Ganges-Yamuna; although Bangladesh is sovereign and independent politically - still then IT/ICT in Bangladesh is caught up in its perennial infancy looking alike "cottage industry" rather than an Industry as in India.

Why it has to be so disparate is any one's guess, but it is a matter of grave concern if taken seriously. Why our IT/ICT sector looks alike "cottage industry" after two decades of progressive success just across the border? What could be wrong with our spirit?

Garments' industry initiatives in Bangladesh, ironically, started almost at the same time of the beginning of Indian IT outsourcing. Fortunately, Bangladesh has long been managed to turn Garments' as a formidable $14 Billion Industry as of 2011, while IT/ICT sector still limping mostly represented by small scale private enterprises under BASIS while Indian IT/ICT sector is worth one-fifth of total volume of outsourcing of the world-market.

It is evident that Bangladesh has been grossly neglecting the prospects and ignoring the importance of IT/ICT sector ever since either out of mis management or due to not adequately understanding the internal growth mechanism of IT/ICT sector in terms of Tire-1, small and medium sized organizational demands and conditionality of outsourcing. Exploration aspects of mining world-outsource-market were naively overlooked.

As a result, Bangladesh lost the momentum for internal growth in IT/ICT sector whichwould have otherwise developed an army of outsource-skilled IT/ICT workforce, not to mention about billions of dollars of lost-income over the years from outsourcing.

As of 2011, only specialized large Indian IT companies made a staggering $43 Billion from ITO segment of outsourcing market employing more than One Million skilled IT human resources, not to mention about other fifty billions in revenues from other segments of the industry by other specialized private enterprises.

Outsourcing is now a strategically pursued, industry specific segments oriented, deliberate specialized effort. Not every company is positioned or should pursue same segment of the industry. It is time that we begin to understand this salient point in relation to our prevailing infrastructural status in the milieu of IT/ITC sector.

Here is an interesting analogy which might elaborate the point for our micro understanding of the game-plan involving internal visionary 2021 emphasis vis a vis growth in outsourcing volume.

BASIS (Bangladesh Association of Software & Information Services) once projected in 2003, that, Bangladesh would secure outsource jobs worth about $2 Billion from IT Outsource Market from 2006 onwards. Ironically, even in 2011 that figure is a hallucinating illusion for us.

We may not ever reach that figure unless we change our clogged thought process in IT/ICT outsourcing. BASIS clearly stagnated reasons over realities and miscalculated essential steps necessary that could actually trigger growth in volume of outsourcing. BASIS might have looked into the world growth pattern of IT outsourcing and guessed that jobs would naturally trickle in as in the case of "water trickles down theory” even if we kept status quo in the IT/ICT sector. But, realities are starkly different ball-game in the fierce war on outsourcing market.

Countries like India, Thailand, Philippine, Malaysia, Vietnam, South Africa are continuously making deliberate efforts to "pump up outsourcing" to their economy.

And they are gaining for those efforts immensely. Imagine, even if we achieve $2Bn benchmark by 2015 as wished by BASIS in 2003 achievable by 2006, we would have created half a million extra employment in the economy. And we all know that one employment in IT/ICT is equal to 4/5 job creations in the Garments industry.

World volume for IT outsourcing was 199 Billion in 2000, 234 Billion in 2005, and 310 Billion in 2008. India managed to slice the Cake by 2.8 Billion in 2003, 3.9 Billion in 2004 and 5.7 Billion in 2005. By 2005, Indian companies created 1.3 million highvalue employments in the IT/ICT sector. India never allowed its share from the "outsourcing-pie" reduced in sizes nor stopped exploring the market aggressively niche by niche.

What then continued holding us back in IT/ICT sector while we did fairly well in Garments? All successive governments since 80s, especially from 1996, never failed to claim successes in infrastructural development and digitization. But none ever looked at the emergency of settingup a dedicated IT Park to augment outsourcing. All the supporting factors to square outsourcingin IT were never attacked with seriousness. Political rhetoric and expediencies did not bring about Indian success, honest leadership did. Even in 2012, someone promoting Vision 2021 promising 4G mobility to the people if and only voted back to power. When infrastructural development in the IT/ICT sector becomes conditional, we are yet to see the fate of our Vision.Unfortunately, increase of outsource to Bangladesh is also conditional to political matrix.

As against the backdrop mentioned above, consider the following scenario in terms of existing parameters in worldoutsourcing. World yearly volume of outsourcing now stands approximately$1.3 Trillion encompassing all segments in all categories. Out of this volume, 57% of outsourcing originates from USA, 25% from EU, 5% from Japan which mostly outflow to China. Balance13% originates from Asia- Pacific, Middle-East, and Africa.

It is imperative then, that, Bangladesh has to research, identify and decide decisively where and which segments of which categories of the outsource-market are logically feasible and viable to concentrate in terms of ROI given the infrastructural status in IT/ICT sector. Any wrong way driving will lead to results as frustrating as was in the case of 2003 BASIS prediction. Atleast we have to realize that market mechanisms in IT/ICT outsourcing are not anything similarto Garments' or manpowerexport. We need to learn the magical marketing mix in the right market with right product at the right time and speak the language understood by the outsource Paymasters. Is it not premature move for us if we try in the market where Tier-1 Indian giants like Wipro, Accenture, Tata Consultancy, Tech Mahindra, and Infosys are in control? Thousands of small and medium sized Indian IT/ICT enterprises are practically direct-marketing and holding onto clients like hawks. Can we really penetrate a place where gatekeeper is our competitor?

These are the factors we need to ponder upon seriously. We need to decide which format andwhat sizes of the business model workable for us in terms of market requirements. Do we needmore Corporations with stock market finances? Small scale enterprises what we have now arenot capable in penetrating US and EU large corporations, because, they don't fit in the vendor's criteria to be eligible for a try.

Outsourcing functions, by necessity, swims through its own inner-circles which are just die-hard tocrack open. Have we ever engaged our experienced people who might have clues to stand chancesas vendor in personal capacity thereby help some substantial outsource flow in? We haven't everorganized them nor tried to find them where they are. Our IT resources in the diaspora should becalled upon and put to task for developing outsource for the sake of employment creation. IndianIT experts in the diaspora are mostly credited for beginning and instigating IT boom in India.

Bangladesh experienced a forceful entry in computing and IT enterprises from the private sectorboth in hardware and software from the onset of 1990s, followed by spontaneous acceptances by mass population. But it took too long for infrastructural development to catch up which could support a more organized private sector initiating any meaningful outsourcing maneuvers. Our infrastructures in IT/ICT as of 2012 are still far below the benchmark any Tier-1 outsource organization would like to see before coming to table. Although our per capita mobile prevalence rate is relatively high, Facebook users are fastest growing field, internet-time consumption rate is going upward; still then services are costlier, slow and dampening. Politicized bureaucracy has become a shark-like shareholder with private sector in overall maintenance of IT/ICT technologyand its infrastructure. Services are given, as if privileges.

There are many more orchestrated bottlenecks inside Bangladesh which are covert hindrances to any kind of honest outsourcing effort over and above qualitative obstacles in the market itself. When compounded with "our limited and misinformed knowledge" in Outsource Marketing, result is nearer to zero percentage of the $1.3 Trillion yearly volume. Odds are stacked against us. Most of them are of our own making, and also of not making right moves during last two decades. Today, some are inevitable results of "competitive edges" which are in favor of India and other competitors .We have disadvantaged ourselves enough already.

Even in 2012, if we may look at it from another perspective and equate with "lost income" context, we do have a sizable IT/ICT skilled professionals already and many more adding up each year due to profound success in education sector over the period. Trumped up outsourcing activities could have absorbed this skilled manpower at "qualifying rate" and contribute to the economy. In our so called outsource marketing mindset, we have had approached and applied “cheap labor theory" even in high-end IT/ICT sector. Researches have strongly indicated that, no sane organization did ever outsourced their back-end complex core functions on the extreme benefits of availability of" cheap labor in Bangladesh". This mindset alone indicative of our impractical approaches to developing outsources volume by dollars and by employment creations.

Even after all the above anomalies, I do consider that Vision 2021 is good news; because, it is bound to grow and diversify the hinterland to a great extent which would invariably add value in the outsourcing efforts. But, preemptively speaking, what we are going to achieve by 2021 could actually be achieved decade earlier should we were mindful. Many of our competitors are poised to make us out distance again by their sheer speed of advancement. Indian IT giants are now busy innovating technological leverages for next generation BPO after extending functional growth into Rural BPO, not to mention about all IT parks are razing in full throttle. Whereas, we are yet to see even one dedicated IT Park in two decades of awareness.

If we want to plan to benefit more from the Vision 2021 infrastructural development, Bangladesh needs to identify its salient points in world BPO outsource space. Clear understanding of" what we can do and should do" and "what we cannot do" are of equal importance. Developing outsourcing in IT/ICT is more of a "strategic affair" for us now. Vision 2021's infrastructural development will naturally trickle down skill-sets growth in Bangladeshi Rural BPO. Corresponding efforts in developing our share in the BPO global market is urgent and worth the penny. We can gain both ways from the Vision 2021.

Global BPO outsourcing volume is now stands $130 Billion to $150 Billion. So, to get an access and set foot at the huge BPO global-pie, we must tune ourselves accordingly and be ready to induce more benefits out of Vision 2021 infrastructural investments. Any parallel initiative towards that end has become as imperative as necessity. We need to remove bottlenecks and systemic barriers inside and deploy workable technics in developing Bangladesh as a destination of secured outsource.

To receive certain kinds of outsourcing, we do require matching preparations. If we are not ready for ITO, we waste our time and resources even trying for it. Even all industries pertaining to BPO are not for us at the moment. STO or WMO? We need to think. We need to spread the net on easier fishing grounds while developing infrastructure for the next ones. This is where we lack as a nation in holistic understanding of the internal and external factors of outsource.

We are also short of "thought leadership" in the IT/ICT, at the same time do not recognize the importance of it either, as we are also lacking in "managerial" capacities. A deliberate move in developing ITO and "no go" segments of BPO can be taken should we try diligently into USA and EU market since it is worth 57% and EU 25% respectably. Bangladesh needs to develop a Mid-size Functional IT/ICT Organization as Model which will act as laboratory in producing" project managers" of large scale applications development in the field of ITO with the objective of populating private sector IT enterprises with skilled project managers. Only then we may turn out to be ready for ITO market by 2017 or so. We are missing the huge-pie (82%) which can only be served by large qualified organizations, not the ones we have now in Bangladesh under BASIS who are but too small for Fortune 500-1000 corporations.

Scale of economics is our natural barrier which we are not going to overcome applying traditional methods.

In this regard, a private Company can be created as part of Vision 2021 initiative with a paltry$10 million as seed money comprising Taskforce, BASIS and US-Bangladesh Technology Association under Board of IT experts who have direct working experiences, contacts and insights in the USA and EU outsource mechanism. This company will "Procure-Produce-Deliver "for profits as in the case of private business model. While paying the seed money back in few years, the company will employ not less than few thousands in its own operations, while hatching qualified managers in ITO/BPO for the private sector. The same company could also be a catalyst in changing outsource fortune in the country. It can also help overseas employment creation, large scale migration to greener pastures, educational scope creation, investment fund creation for supporting internal innovation, a lot of other related peripheral activities supporting outsource. We just have to be smart and extra creative by choice in our new approaches.

Unfortunately, Bangladesh has had been and still walking the path far away from the "highway "to outsourcing. We need to scrutinize, learn, and make tactical moves if we really want to cutout a worthwhile slice from the enormous "$1.3 Trillion Dollar outsourcing pie". This is the point I would like you to take heed of.

We have neglected a prolific sector for two decades. Let's do something about it now. We all have put our vision in Vision 2021. But, vision is not always enough, some action is required.

The attachment of our elites Sunday 05-May-2013

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