Written by Raiyan Rabbani

Bangladesh is one of the prime destinations for outsourcing, with more than half of the population in the prime working age range, thanks to the demographic dividend since 2007. It is a sector with huge potential to drive the nation’s economy. Since 2010, Bangladesh’s ICT industry has grown by over 40% yearly. Bangladesh’s ICT industry is mostly driven by the energy of its many young entrepreneurs and the government’s strong focus on Digital Bangladesh.
Here, the domestic IT-ITeS (Information Technology and Information Technology Enabled Services) market is currently worth USD 1.1 billion approximately.
In Bangladesh, there are more than 4,500 officially registered ITeS and software enterprises. 43% of the companies are active in both the domestic and international markets, with 48% focusing solely on the domestic market and 9% only on the international ones.
If we talk about the definition of BPO (Business Process Outsourcing), it is a type of outsourcing that involves contracting operations and responsibilities to a third-party provider specialising in the type of service provided.

In-House vs Outsourcing
What Is Different About the BPO Industry?
BPO firms put their focus mostly on specialised work within a field in which they have expertise. This includes a range of various broad categories of BPO services. Some of them have been discussed below.

Professional Outsourcing
All specialist services, such as accounting, purchasing, administration, legal, digital marketing, etc., fall under the umbrella of professional outsourcing. Many of the services covered by the term “Professional Outsourcing” demand a licence or extensive education. This is great for both growing the business and getting one-time services.

Multi-Sourcing
It is a different technique to integrate outsourced services. Multi-sourcing is typically a combination of IT and other business functions. It usually works better for big businesses that wish to contract out a range of IT services and operations to several providers. Multisourcing, on the other hand, is a good option for any company that needs access to top experts, wants the best results, and wants IT projects with transparency.

IT Outsourcing
This involves hiring a supplier specifically for IT. This can be a better choice if there are certain IT requirements or if the organisation is small. Even small businesses require some IT assistance to manage their networks, maintain security, and comply with licencing requirements. This is a cheap way to get those services. Through IT outsourcing, any firm can get assistance with everything from infrastructure to app development.

Business Process Outsourcing (BPO)
A type of outsourcing in which a corporation hires a third-party service provider to handle one or more business processes that are common to all other functions. All actions pertaining to a specific business function must be performed by a third party. BPO is sometimes referred to as externalisation or subcontracting. It was first used in manufacturing, but now it is used in a wide range of business operations.

Manufacturing Outsourcing
Small enterprises may not be able to manufacture their own products, especially when demand rises. In fact, outsourcing is frequently the only way to compete with big businesses that have more resources, the money to hire big teams, and the means to regularly upgrade their technologies. Thus, many firms outsource manufacturing to cut down on the expenses of maintaining a facility, hiring employees, purchasing equipment, building infrastructure and purchasing raw materials. Manufacturing outsourcing is becoming essential for businesses of all sizes as product life cycles in various industries continue to shorten.

Global and Local Trends
Presently, more than 400 Bangladeshi IT businesses export to more than 60 nations, with North America serving as the primary export market. Nearly 35% of the export revenues for Bangladeshi IT and ITeS companies come from US clients, 15% from the UK, and a handful of EU nations like Denmark and the Netherlands are also in the client base. Several local businesses also export IT-ITES services to the UAE, Saudi Arabia, South Africa, Malaysia, and Singapore.
The IT-ITeS sector is currently mostly concerned with IT goods and services. The scope of business process outsourcing (BPO) businesses will continue to expand as a result of technological advancements brought on by big data analytics, the Internet of Things (IoT), 3D imaging, and robotic process automation. Additionally, Bangladesh’s expanding online working sector has a tonne of promise, with more than 650,000 registered freelancers. The average annual growth rate of these industries here has been over 40% in the last five years, and this growth rate is expected to be sustained. The increasing trend has been demonstrated in the following chart.
Freelancing has become a common job choice for young people in Bangladesh, particularly those in their 20s, as a result of the growth of the gig economy. According to the Oxford Internet Institute (OII), Bangladesh is now the second-largest supplier of online labour. About 500,000 of the country’s 650,000 registered freelancers are actively working, earning a combined total of USD 100 million every year. Bangladesh’s main rival is its neighbour India, which supplies the majority of the world’s online workers, nearly 24%, followed by Bangladesh (16%) and the United States (12%). The chart below displays the prevalent working practices among independent contractors.
development and technology employ around 22% of the freelancers, while creative multimedia uses about 25%. However, 10% of the freelancers have been hired in professions with relatively modest skill requirements, such as data entry and secretarial work. It is possible to train more people to participate in these activities.
With a 55% market share, workers from the Indian subcontinent dominate the software development and technology sectors. The UK-based workforce holds a 22% market share in the professional services sector, which includes services like accountancy, legal services, and business consulting.Success Factor of the Outsourcing Firms
The outsourcing sector has grown remarkably over the past few years. Working with an offshore team is considerably assisting firms in accelerating their business growth through cost savings, enhanced efficiency, and broadened frontiers of service delivery. Below is a list of the most important things that have helped companies in this industry grow.

Drafting Service Level Agreements - Ensuring Quality in Outsourcing

Why India is Thriving in the Global Outsourcing Industry
One of the fastest-growing outsourcing markets worldwide is India. Many faraway businesses have entered this expanding industry thanks to the nation’s established communication infrastructure and low labour costs. India is a desirable site for businesses looking to outsource due to its enormous pool of highly skilled human resources and inexpensive cost of living. Some of the reasons have been summarised below.

Largest Technical and Professional Talent Pool
When it comes to having a large pool of talented and skilled human resources, India continues to be unrivalled. The country has a population of over 1.2 billion people, and every year, 3.1 million new graduates enter the labour force. India is also the
largest English-speaking country in the world, bigger than both the US and the UK put together. In addition to the huge numbers, the quality of the talent is what draws businesses looking to outsource.

Cheap Pricing Options
In part because businesses can save costs there, India continues to be a prominent outsourcing destination. This is mostly due to the significant disparity between staff expenses in India and those of affluent nations. For instance, a competent developer in the US can charge between USD 50 and USD 80 per hour (for a full-time staffer, depending on skills and experience). In contrast, it is possible to haggle a developer’s hourly rate down to as little as USD 15 in India. Companies may manage their budgets more freely and creatively because of this pricing flexibility, which also enables them to generate sizable profits.
Ensuring Quality Services
While cost is a major consideration in outsourcing, India continues to be the top destination due to the consistently excellent quality of services supplied by Indian outsourcing companies. At its annual offshore outsourcing conference, the National Outsourced Association (NOA) looked at the trend of many international businesses choosing India as their top outsourcing location.

Prospects of the Industry
Increasing global demand for outsourcing services has boosted the growth of the BPO industry in Bangladesh. The growth is being fuelled by the government’s focus on “Digital Bangladesh”. Alongside the private and public investments in this sector, there are other factors which demonstrate the promising future of the industry. Some of them have been discussed below.