Encouraged by the success of the first Business Process Outsourcing (BPO), held in December last year in which 235 people got job and another 10,000 showed their eagerness to work in the industry, recently the ICT Division, in collaboration with Bangladesh Association of Call Center and Outsourcing, hosted the 2nd BPO summit at a city hotel with an aim to brand Bangladesh as an ideal place for investment and business management. Although the BPO is not a new phenomenon, currently it has emerged as a promising sector and come to the fore for its role in resolving the unemployment problem in a shorter span of time. Many countries in the world, including the neighbouring India, are dominating the BPO market. Bangladesh have also been trying to occupy a considerable slice of the global BPO market pie for years but it did not succeed that much in this regard. In this article I shall explore what the BPO actually means, its types, current situation of BPO market, factors causing for setback in flourishing theBPO in the country and the required measures to overcome it.
Business Process Outsourcing or simply BPO is a segment of the IT enabled services industry. It refers to outsourcing in all fields, and a process of constructing a specific business task such as data entry, billing, and payroll etc. to a third party service provider. Typically, BPO is implemented in areas where companies require a task but do not directly require their presence in the marketplace. Companies usually adopt BPO as a cost and time saving measure for tasks.
Generally, there are two categories of BPO: one is termed as back office outsourcing, which includes tasks such as payroll, billing, data entry, data processing etc; and the other is front office outsourcing that involves Call centre, customer service and care, account management, technical support, IT service desk etc. Furthermore, BPO that is contracted outside a company’s own country is called offshore outsourcing, and the one that is contracted inside the company’s own country is sometimes termed as onshore outsourcing. Again, if the BPO is contracted to the company’s neighbouring countries it is called Near-shore outsourcing.
Since the inception of global outsourcing, the market size has been showing a steady increasing trends, except for the period of recession in 2013, when it dipped to 82.9 billion USD from 99.1 billion USD in 2012. And until 2014, the global market size of BPO was to the tune of 104.6 billion USD. At present BPO market size is of $600 billion. Of the global outsourcing countries, our neighbouring countries are doing well. For instance, India has always been at the top of the list in the BPO business and is earning $100 billion from this sector. Favourable ICT policy and geographic location has made it one of the prime outsourcing hubs in the world. Besides, Philippines and Sri Lanka earn 16 and 3 billion USD respectively from BPO industry.
Despite the fact that Bangladesh set about BPO business with much expectation and enthusiasm, it has not advanced in that way. For instance, in 2009 it earned only 26 million dollar from BPO sector and now it has reached 180 million dollar a year. Although the growth is claimed to be 100 percent, it still amounts to a meager in comparison with that of other outsourcing countries like India, Philippines, Australia, China, Mexico, Irelands etc. However, realising its potential and contribution to creating employments opportunities as well as economic growth, at present policy makers have turned their attention to the BPO business.
But there are some real challenges that need to be addressed first to get outsourcing job and do well in this sector. Companies usually search for a country which has cheap labour along with highly skilled English speaking people and business friendly environment to get their job outsourced, the requirements that Bangladesh miserably lacks of, except for the cheap labour. This is corroborated by the fact that the country has ranked 121 out of 144 countries of “The Best States for Business and Careers 2015” – a survey conducted by the Forbes magazine.
It is worth mentioning here that Bangladesh has more than 65% youth of its total population, which is definitely a boon for it provided that the power of youth is utilised. Regrettably, the country could not build up a pool of talent comprising of the young people in that way. This is mainly because of the flawed educational and erroneous policy making systems. Most of the youngsters here in Bangladesh suffer significantly from the dearth of English language skills which is one of the most important prerequisite to take BPO as a profession. In addition, bureaucratic rigmarole, intricate tax structure, unstable political environment, lack of business risk mitigation, and absence of good governance are among a few factors causing stumbling blocks to the growth of outsourcing business in the country. To add to the woes, the recent spates of militant attacks have made the situation aggravated.
Hopefully, the present policy making authorities have realised the immense potential of IT enabled services industry including the outsourcing business at last and have started taking initiatives to unlock and exploit those potentials. For example, the government’s aim is to earn $3 billion from ICT sector by 2021 and a goal has been set to make a contribution of $1 billion to it from the BPO sector by generating 2 lakh employments from currently 30,000, to achieve the target. Besides, it has planned to establish 554 BPO centres within a short period of time for setting up BPO ecosystem. Furthermore, to enhance the skills and capabilities in ICT as per the demand of international market, various training projects such as Learning and Earning Development Project and Leveraging ICT for Growth, Employment and Governance Project etc. have been initiated for the young unemployed people.
Apart from these, what the government urgently need to do is to remove bureaucratic backlog in setting up ICT startup and investment in it, ease up tax and VAT structure, to mitigate risk in creating favourable business environment, to establish the good governance in every sector for enhancing image of the country, to maintain law and order situation including providing adequate security to the foreign investors and, the last but not the least, to build up a pool of well-skilled people in English language through proper training to vie for and excel in the outsourcing business at and global stage. Bangladesh can truly be “The Next ICT Destination” provided that we first create right paths to the destination.