Prospects and challenges of outsourcing to Bangladesh

Abstract

Outsourcing involves the contracting out of a business process to another party which is also known as business process outsourcing. Companies primarily outsource to reduce certain costs such as peripheral or "non-core" business expenses, high taxes, high energy costs, excessive government regulation, production and labor costs. The unique age demography of Bangladesh, coupled with the low-cost work force and Government's Incentive for the IT service sector, makes Bangladesh a major player at the global service outsourcing market. Bangladesh is fast emerging as the next major global outsourcing destination. According to The Outsourcing Institute, Information Technology outsourcing has been the fastest growing area for outsourcing. The Outsourcing Institute also found some coming up trends in outsourcing which are client/server, networks, desktop systems, end-user support, full IT outsourcing. Outsourcing businesses may be classified into major two categories, one is service, and another one is through product support though this also has a bit similarity with services.Services include information outsourcing, call center services, financial/accounting information outsourcing using IT, procurement outsourcing, data center outsourcing, research, marketing and human resources marketing. And besides these product outsourcing intermediary and Consultancy has a huge demand throughout the outsourcing market. But this type of outsourcing makes organizations relax about their office spaces and work load. Second one is, vertically oriented skills will be facing a huge demand where the outsourcing works will be more done for the next five years. And this will create the high demanding situation in the outsourcing market just because of less effort and highest value delivery. In statistical term if expressed, the global outsourcing market has been increased at 16% over 5 years. SMEs within IT industry are the top adopter through this high time of outsourcing market development. However, as the business and service delivery eco systems are changing across markets, SMEs are now more exposed to offshore outsourcing options. This also represents the demand of Bangladesh’s works among the outsourcing market is putting the maximum tax facilities in this industry and there outsourcers from abroad are making the benefit of spending less in any work from Bangladesh