Promoting a Sri Lankan Bpo to Uk

PROMOTING A SRI LANKAN BPO TO UK

Infosys (Pvt) Ltd

INTRODUCTION

Infosys is an emerging BPO company established in Sri Lanka. We provide IT related services for global clients. Some of the services provided by Infosys include software development; information security management, system maintenance and other IT related services. As a part of the expansion plans of the company, we have decided to focus our attention on the UK which has already a good client base for Sri Lankan BPOs according to the SLASSCOM, the official representative body for the industry in the country.

GLOBAL BPO INDUSTRY

According to Gartner (a leading consultancy firm in the outsourcing industry) the global potential for ICT/BPO market is expected to be $1.5 trillion while the addressable ICT/BPO offshoring market is estimated at $ 500 billion. Out of this only about 25 per cent, i.e., $ 125 billion has been captured. ICT / BPO offshoring market is expected to grow up to US $300 billion within the next five years. Sri Lanka hopes to capture between 0.5% and 1% out of this growth. If this is achieved Sri Lanka's IT/BPO could go well beyond being one billion dollar industry by 2015.

BPO Companies are one of the fastest growing companies today. In India giants like GE, American Express, IBM, Convergys, Aegis, Wipro, E4E, 24/7 have around 10000 employees servicing different aspects of the industry.

One BPO Company is established almost everyday in India alone. This is not just the present, it is the future.

When considering the global BPO industry, India's BPO industry has evolved and matured to present higher-end services that require judgment-based analysis and domain expertise, rather than function-specific, rules-based performance parameters alone. As service providers strive to offer end-to-end services, BPO fall into different segments. At one end of the spectrum is the traditional rules-based transactional outsourcing; while at the other end is judgment-based transaction processing and full-service business process outsourcing.

Emergence of the BPO industry in Sri Lanka during the last few years

Over the past three to four years Sri Lanka has been increasingly recognized as an emerging outsourcing destination for key functions and specialized services in IT and ITES in Asia. The advantages of the country include increasing availability of highly skilled professionals and comparative cost and qualitative advantages relating to infrastructure and workforce.

In the year 2007, A.T. Kearney's Global Services Location Index highlighted Sri Lanka among the top 50 outsourcing destinations. Despite the limited size of the workforce in relation to other large outsourcing players such as India, Sri Lanka possesses highly skilled professionals for niche services in IT testing, finance and accounting, with the highest number of Chartered Institute of Management Accountants (CIMA) graduates in the world outside of the UK(source), and legal services. Further the location of Sri Lanka in terms of time-differences allows it to cater to the European, Australian and the American markets. All these factors place Sri Lanka in a prime position to establish itself as one of the top outsourcing destinations.

Also this year has been dubbed 'The Year of IT and English' by the government of Sri Lanka. It believes that the country has the potential to support an IT sector that employs 100,000 people and a business process outsourcing industry worth $1 billion. In 2009 the push to live up to this potential - by pushing IT skills training and building special economic zones for IT and BPO companies - began in earnest. It is not clear whether it is by chance or by design that this push coincides with the government's recent and violent crackdown on the Tamil Tigers, the separatist militia with whom it has fought in a civil war since the 1980s, a crackdown that is reported to have caused civilian deaths in the thousands.

Either way, the Sri Lankan government and IT industry now argue that the instability that once limited foreign investment has been resolved.

There are over 300 IT and BPO companies that operate in Sri Lanka, mostly small and medium companies and few large global players. Among the several leading global IT-BPO companies operating in Sri Lanka include HSBC, WNS Global Services, Aviva, Microsoft, Motorola, Industrial & Financial Systems (IFS), Amba Research, RR Donnelley, Quattro, Virtusa, eCollge, Valista, Millennium Information Technology and Innodata Isogen.

Growth opportunities for IT BPOs in the future

When we consider the IT/BPO sector in Sri Lanka it can be affirmed with confidence that Sri Lanka's IT/BPO industry can reach the goal of the one billion US dollar mark by 2015. It can be also affirmed that this industry in Sri Lanka could become about two to three billion US dollar industry in 2020 . This will also ensure that Sri Lanka's IT/BPO industry becomes the country's number one foreign exchange earner and number one employment generator by 2020.

Sri Lanka's past performance, including the rate of growth and the recognition by relevant reputed international and regional monitoring bodies, constitute a firm foundation for the above affirmation. The resources available, Government's commitment and support and the holistic pattern of development as opposed to isolated development, all these plus points point to this affirmation. The Government's plans for the future include ensuring that we build the talent capacity needed to facilitate this industry, continue to do country branding, attract new investors and companies here and develop the existing companies, and strengthen infrastructure by constructing IT parks etc.

PEST Analysis

Macro environmental factors prevailing in Sri Lanka and The UK will determine to what extent a Sri Lankan BPO can become successful in the UK. There are many factors in the macro-environment that will affect the strategies of individual organizations as well as the industry. It is important to evaluate these factors before formulating business strategies. Thus, factors affecting the local environment and the foreign market have been evaluated using the PESTEL model.

Political Factors

Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour