Outsourcing in Sri Lanka – The first IT and BPO companies established operations in Sri Lanka as far back as the 1980s. Today, a lot of European companies, especially software development companies, Outsourcing to Sri Lanka due to may reasons.
Today, more than approximately 1000 IT and BPO companies have operations in Sri Lanka, more than 75,000 people hold IT or BPO jobs, and the sector generates more than $850 million in exports.
Several well-known international firms such as HSBC, IFS, Motorola, HP subsidiary MphasiS, RR Donnelley, and WNS have established R&D, IT, and BPO centers in Sri Lanka.
Meanwhile, Sri Lanka-based firms provide advanced outsourcing services to blue-chip global clients, including Google, Lenovo, Microsoft, Nokia, JPMorgan, the London Stock Exchange, Santander Bank, and Emirates Airlines
Furthermore, contrary to the image created by the earlier conflict, Sri Lanka is among the safest, lowest-risk emerging markets, both in terms of personal safety and business security, therefore, it the best time Outsourcing to Sri Lanka now, especially software development.
The government also offers generous incentives for investors in the sector, including exemptions from corporate taxes and import duties along with grants and subsidies for training programs.
With a population of only 22 million, Sri Lanka does not offer the size advantages of countries such as China, India, and the Philippines.
However, recognizing its small scale, Sri Lanka has tended to focus on higher-value niche products across industries.
Sri Lanka continues to lead the world in high-value niches, including fast fashion and ethical apparel in the clothing industry, solid tires and surgical gloves in the rubber industry, single-origin teas in the tea sector, and activated carbon in the coconut sector. Similarly, niche knowledge services
offerings are a major benefit for companies planning to add complementary locations to their existing global operations footprints.
Those that have centers in Sri Lanka and elsewhere tend to do their more complex, specialized work in Sri Lanka while performing larger-scale trans-actional work in India and the Philippines.
These offerings are also a key differentiator for small- and medium-size customers, which can get a level of attention and access to top-level talent that they would never get in larger centers in other countries.
Outsourcing Software Development Services to Sri Lanka by Startup company would be able to find the best talent in Sri Lanka.
In particular, thanks to its proximity to India, similar costs and talent profile, lower levels of attrition and wage inflation, and superior business environment and infrastructure, many companies are viewing Sri Lanka as a natural complement to their operations in India—allowing expansion in a less-overheated environment while diversifying country risk.
Of course, when it comes to outsourcing to Sri Lanka, Sri Lanka is not perfect: although its infrastructure tends to be less overstretched than in other low-cost countries, therefore, the government needs to take preemptive steps to encourage the development of increased office space and infrastructure to serve the needs of the knowledge services industry.
Reminiscent of many former British colonies, Sri Lanka tends to have a highly structured regulatory and bureaucratic environment when it comes to outsourcing software development services.
Although this can be beneficial in upholding investors’ rights and driving improved enforcement of intellectual property, it also results in rigid practices in areas such as labor regulations.
Sri Lanka has 23 accredited universities and numerous private higher education institutes offering full degree programs. The total number of students enrolled in higher education now exceeds 400,000, with almost 100,000 students graduating per year.
Most graduates have degrees in disciplines relevant to the knowledge services industry, including computer sciences, finance, commerce, law, medicine, architecture, and engineering.
More than 5,500 graduates with IT-related degrees and post-graduate degrees are now joining the workforce each year.
In addition, more than 25 private educational institutes offer diplomas in IT, and tertiary and vocational education institutes around the country offer preliminary IT training courses.
The government has recently pushed through reforms that enable private institutions and foreign entities to establish fully accredited universities in Sri Lanka in order to encourage the outsourcing software development services from overseas countries
A number of private universities are scheduled to become accredited in 2012, helping to relieve space constraints at public
universities and open up higher education to a much broader section of the population.
Foreign universities such as
The Curtin University of Technology in Australia,
Monash University in Australia,
The University of British Columbia in Canada,
The University of Wales in the United Kingdom, and
Uppsala University in Sweden
are partnering with local institutions to offer degree programs, and some are investigating the possibility of setting up their own campuses in Sri Lanka.
Since colonial times, Sri Lanka has excelled in education quality compared to other developing countries.
With free primary and secondary education in place since 1938 and an extensive university system, Sri Lanka’s education systems are top level. Sri Lanka’s literacy rate has exceeded 85 percent for more than 30 years and is currently 91 percent, while literacy levels in most countries in South Asia have been lower than 60 percent until quite recently.
Sri Lanka still has the highest secondary school enrollment rate among developing countries in the benchmark group, and it ranks number one in South Asia on the United Nations Human Development Index (see figure 7).
The government has also launched programs to increase IT usage and literacy in schools. These include initiatives to complete the installation of IT labs in every primary and secondary school within the next three years and develop IT-enabled content and curricula.
Sri Lanka is, in many ways, a hidden gem for outsourcing.
It is uniquely positioned to offer companies highly skilled talent and a strong business environment at very competitive costs.
As the industry grows and the lingering effects of the war recede, costs will undoubtedly rise.
But Sri Lanka will undoubtedly maintain its competitive advantage as a very favorable business environment in order to attract customers who want to outsource software development services to Sri Lanka
With continued efforts to expand the talent base, reduce red tape, improve infrastructure, and establish new knowledge cities around the country, we can expect Sri Lanka to become a major player in the IT, BPO, and knowledge services industry in the next few years.
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Please note this blog post of “Outsourcing in Sri Lanka” is based on ATKearney consultancy company search which was done in 2016.
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