Bangladesh has been recognised by a US company as the 26th best destination for IT outsourcing globally.
AT Kearney, a leading management consultancy firm with offices in more than 40 countries, has for the first time included Bangladesh in its Top 50 Global Services Location Index.
The index assessed 51 countries based on metrics under three categories -- financial attractiveness, people skills and availability, and business environment.
India remains the top offshoring destination for IT companies, followed by China and Malaysia.
“This will significantly boost ICT investment and outsourcing to Bangladesh as global companies and investors follow this report and ranking for decision making,” said Shameem Ahsan, president of Bangladesh Association of Software & Information Services (BASIS).
But in terms of cost competitiveness in outsourcing services, Bangladesh ranks first, he said at a press conference at BASIS office in Dhaka yesterday.
Asia continues to dominate the global market, with six countries from the continent being among the top 10 offshore destinations in the index.
However, there are some challenges for the region. Global IT firms started outsourcing back-office operations in mid-2000s, but multinationals are reassessing their outsourcing strategies now.
There is a course correction where some functions are being repatriated from vendors back to the companies' own service centres and employees, according to a study by AT Kearney.
These regions also face challenges from increasing digitisation and automation, which could negate cost competitiveness. Greater automation and freelance-based outsourcers are eventually making physical location less relevant.
“Automation, wherein robots are programmed to perform for even less than low-cost labour, is becoming increasingly accessible and could dent the region's low-cost advantage,” the study said.
Although China offers an alternative to Eastern Europe for high-end IT and analytics, rising wages are limiting its cost competitiveness in lower-end functions compared with India and other Asian destinations.
Zunaid Ahmed Palak, state minister for ICT, was also present at the press conference.