Historically, the most popular delivery locations have been India and the Philippines, but a number of next-generation locations. The outsourcing opportunity in Bangladesh is emerging with specialized technical capabilities and distinct support offerings in terms of pricing structures, talent markets, and a variety of risk-handling profiles.

It's time to take a deeper look at one of the key factors that have prevailed during Bangladesh's 50 years of independence: the not-so-distant dream of a Digital Bangladesh.

An important driving force behind Bangladesh's digital revolution has been the IT offshore outsourcing industry. Many corporate activities now involve technology at their core, and Bangladeshi law fully supports these enterprises. As a result, outsourcing software development in Bangladesh has grown significantly during the previous 10 years.

Read our blog on the informative journey of custom software design and development in Bangladesh, here.

Bangladesh, a developing nation in South Asia, was propelled by technological development to fast become a well-established outsourcing location because it can manage IT operations and cutting-edge technology at a significantly cheaper cost. Bangladesh boasts competent offshore developers with reasonable outsourcing costs, as opposed to developed nations like the US and many other well-known outsourcing sites in Asia and Europe.

Particularly in Bangladesh, IT offshore outsourcing players have shown a lot of interest recently. By 2020, the domestic IT-ITeS market in Bangladesh was estimated to be worth between US$0.9 and US$1.1 billion; by 2025, this market is forecast to have grown five times, reaching US$4.6 to US$4.8 billion. The worldwide ICT industry was estimated to be worth between US$556 and US$937 billion in 2020.

Advantages of affordable operating costs with diverse talent

Despite being far smaller than outsourcing giants, the outsourcing business in Bangladesh has seen one of the highest rates of development globally, indicating significant untapped potential and expanding remittances. The domestic market is predicted to generate $0.9 to 1.1 billion in sales in 2017 and about five times that amount, or $4.6-4.8 billion, by 2025. This is considerably higher than either the overall growth forecast for a developed peer location like Vietnam (12-15% CAGR for 2017-2020) or for a veteran peer site like India (10-13% CAGR for 2017-2020).

The industry is seeing an increase in activity from both domestic and regional players, with service offerings ranging from transactional IT-Application Development and Maintenance (ADM) and IT-helpdesk to specialized services like big data analytics, the Internet of Things (IoT), 3D imaging, and virtual reality/augmented reality (VR/AR). The outsourcing opportunity in Bangladesh compelled leading enterprises, including Google LLC, Wipro, IBM, TCS, NTT Data, WPP, Valmet, and so on, to partner with outsourcing software development companies.

Valuation of IT Outsourcing in Bangladesh

According to a study, Bangladesh has been named one of the best destinations for outsourcing IT.

Moreover, Bangladesh is one of the top nations for outsourcing IT jobs, according to A.T. Kearney Global. The most well-known and important management consulting firm in the world is A.T. Kearney Global. It has been recognized in 51 nations as the top location for outsourcing software and IT-enabled services worldwide. It generated data that claimed Bangladesh was among the best locations for outsourcing IT jobs. Bangladesh is ranked 51st out of 51 countries in terms of "Financial Attractiveness," behind countries like India, China, Australia, Canada, and the United Kingdom. Bangladesh is in 26th place in the index, with the UK at number 27, Canada at number 37, Australia at number 49, and Ireland at number 50.

Advantages of affordable operating costs with diverse talent

The global offshore service industry has long placed a priority on cost savings maximization and has steadily increased location leverage to offer the next wave of savings. Bangladesh offers significant savings over all of its rivals and is the least expensive location among the top 250 offshore IT delivery locations.

For IT services, Everest Group estimates that Dhaka, Bangladesh is 16–20% less expensive than Bangalore, India, and roughly 30% less expensive than Cebu, Philippines (including salary, benefits, facilities, telecom, technology, and operational overheads). The pricing offer is equally favorable for IT outsourcing and non-voice business operations, with savings of 18–22% above Bangalore (India). Over the following two years, it is anticipated that the construction of multiple high-tech parks and the growth of office space would further reduce office lease prices in Bangladesh by up to 40%, improving the location's cost competitiveness.

Bangladesh's cost-benefit case is further strengthened by the impact of enticing government incentives, such as a 100% company tax exemption (until 2024) and an 80% VAT exemption on utilities (such as office rent and electricity). The government also plans to provide up to 10% in cash back on all export revenues to lure foreign investment in the outsourcing business in Bangladesh.

Steady growth in the IT outsourcing industry of Bangladesh

Bangladesh has a sizable pool of skilled employees and has experienced rapid economic growth over the last 20 years, making it a well-liked outsourcing location in recent years.

After the BRICS (Brazil, Russia, India, China, and South Africa) nations, Bangladesh has been included in Goldman Sachs' "Next-11" list of countries. This rating demonstrates Bangladesh's potential as a place for outsourcing and is based on variables such as infrastructure expenditure, human capital development, and economic progress. According to the Oxford Internet Institute, the country has also surpassed China as the second-largest supplier of online labor in the world.

Let's look more closely at a few advantages of outsourcing to Bangladesh:

High-Quality IT Services

Service providers from Bangladesh that specialize in offshore development and outsourcing provide products and services on par with those from other Asian outsourcing hubs. Bangladeshi laborers are also known for having excellent work ethics. Therefore, if you outsource to Bangladesh, you may expect timely and satisfactory project delivery.

The nation's continuously growing digital infrastructure is an essential part of the high-quality service experience. Bangladesh is ranked 35th on A.T. Kearney's 2021 Global Services Location Index as a developing outsourcing hub.

Additionally, Bangladesh is one of the top 5 countries in the world for service quality development. Therefore, it is not surprising that Bangladeshi IT companies and independent contractors do business with people from more than 50 other countries, including Germany, the US, and Australia.

Advanced Infrastructure

The government intends for the ICT sector to generate $5 billion USD in export revenue by 2030. To achieve this, the Bangladesh Hi-Tech Park Authority is working to enhance employee skill-up infrastructure, regulations, and technological acceptance along their investment route.

A plan in Dhaka and neighboring areas included the construction of 12 high-tech parks, which the Bangladeshi government approved. The project aims to further the "Digital Bangladesh" concept through cutting-edge networking technology, fiber optic connections, and clever solutions. 

The use of robotics, artificial intelligence, machine learning, and other cutting-edge technologies will be taught to 2,400 people at these parks. It is clear that there are several benefits to outsourcing to Bangladesh.

Global organizations are fascinated by emerging technology services

Technology is no longer solely viewed as an agent of "automation" that is used to lower costs along the whole business value chain as a result of the recent digital disruption. Businesses are utilizing technology to address top-line growth in addition to their lofty goals for a better customer experience, a more effective sales force, boundary-less internal organizations, real-time decision-making, and creative business and revenue models. Digital technology that may change how firms work and increase effectiveness is therefore in high demand. 

2000 global enterprises are fascinated by emerging technologies including blockchain, augmented and virtual reality (AR/VR), smart analytics, digital cloud platforms, robotic process automation (RPA), artificial intelligence (AI), and smart analytics.

The internet of things (IoT), blockchain solutions, artificial intelligence (AI), and other cutting-edge technologies are the focus of BJIT, one of Bangladesh's fastest-growing technology companies. It works on multinational initiatives in disciplines including, but not limited to, automated voice recognition, smart wellness, and online URL classification.

The Endnote

An outsourcing company in Bangladesh offers highly qualified offshore developers at an affordable cost that is substantially lower than widely held perceptions. Bangladesh has solidified its position as a viable option for companies searching for locations to take advantage of the approaching cost advantage wave. 

BJIT’s support offerings also include infrastructure, talent scalability, and data protection. Businesses considering outsourcing opportunities in Bangladesh must understand the kinds of risks that exist and how they relate to those in other similar emerging regions in order to make an educated decision based on their capacity to manage or mitigate such risks.

Get in touch with BJIT for engaging software services that will give you a competitive advantage in the marketplace.