It Outsourcing In Bangladesh

Published Date: 02 Nov 2017

Outsourcing is a major international phenomenon in business today. Global IT outsourcing industry has been steadily in the last decade. In the competitive environment of global business and evolving technology era, it is now become a challenge to remain cost and increases efficiency and productivity .Most of the company is trying to shirk IT budget in order to compete with rivals in providing the lower cost advantages to customers. The most of the companies started to explore opportunities global sourcing of IT services in order to reduce cost and profit margin being the primary driver for offshoring service .With today’s challenging economic conditions and increasing cost pressure, more companies are looking at effective use of external providers to help them support and are being prefer to offshoring outsourcing to developing countries to take the benefit of comparative advantages.

Bangladesh, despite being ranked among less developed country with over population, would continue to emerge as a favorable destination for information technology and business process outsourcing. In order to aim at promoting a ‘Digital Bangladesh’, the government has been taking to initiative to develop the information economy and support to laying the groundwork for a successful outsources market. According to KPMG (2012), The IT service of Bangladesh has been growing serving domestic and international in banking and telecom sectors .Now the employ of this sectors 20000 and exporting services to Europe, North America and East Asia. Bangladesh freelancer community had been IT exported to US$7 million in 2010.Many global players, like Samsung, AMD, VizRT, World Bridge Global setting up their operation in Bangladesh.

The main goal of the study will be finding out the influencing factors that influencing the foreign company to thinking investing or outsourcing IT to Bangladesh.

1.2: Motivation to undertake this study

I am going to plan after completing my MBA program; I will develop an IT outsourcing business in Bangladesh. Being one of the fastest progressive countries of this world where about 65% people changing the lifestyles and society. I would like to contribute to the economy of country and would like to solve the unemployment problems.

Problem Statement

It is a fact that despite high expectation, over last decade the software and IT service industry could not perform according to its potential in the export front. The export value is still scanty compared to other outsourcing countries in the region. As reasons behind this poor performance, industry experts have identified a number of problems including lack of proper infrastructure, shortage of qualified IT resources, absence of international branding & marketing activities, negative perception and the role of the government ("Bangladesh Beckons," 2012).The study will establish the possible solutions to IT offshoring challenges in Bangladesh.

1.4 Research Objectives

The study objective is to identify the determinants of successful outsourcing in the IT industry.

Specifically, the objectives of the study are:

To identify the emerging issues on outsourcing by using SWOT analysis

To find out sustainable strategies for risk mitigation of IT Outsourcing

To find out how to adapt of IT outsourcing strategies in a new technological economical system dominated by ‘the cloud’

1.5 Research Questions

1.5.1 Major research questions

What are the determinants of outsourcing decision in IT industry?

1.5.2 Minor research questions

What are the challenges faced IT industry while carry out outsourcing decisions?

What are the possible solutions to challenge faced by IT industry in effecting their outsourcing decision?

Business Strategy

IT Strategy

Sourcing Strategy

Make

Internal

IT Department

Buy

IT Supplier

Offshore Outsourcing

Buy

IT Supplier

Outsourcing

Figure: The relationships between Companies’ business, IT and sourcing strategies and the make-or-buy and onshore-offshore decisions.

1.6 l Framework

The study will adopt a framework by Conceptual models that indicated outsourcing decision as a dependent variable, which reduced operating cost, improving capacity focus, access to world class capability and availability of internal resources as independent variable. Insert arrows to represent the hypothesized relationships between variables.

Reduced Operation cost

Overhead and fix costs

Space

Reduced Operation cost

Overhead and fix costs

Space

Reduced Operation cost

Overhead and fix costs

Space

Out Sourcing Decision

Reduced Operation cost

Overhead and fix costs

Space

Figure 1: Schematic Diagram of the Research Framework

Hypothesis testing

The study results will be scientifically tested basing on the Null (Ho) and the alternative (Ha) hypotheses. The hypotheses are as follows:

Null hypothesis (Ho): IT Outsourcing in Bangladesh has a positive correlation.

Alternative hypothesis (Ha): IT Outsourcing in Bangladesh has no positive correlation.

1.8 Methodology

1.8.1. Introduction

1.8.2 Research Design

1.8.3 Types and Source of Data

The research method to be used is both quantitative and qualitative method. The secondary data will be collected form from search engines, such as Science direct and EBSCO. The purpose of this research is to find out the determinants of outsourcing decision in IT industry in Bangladesh. The researcher will also compare with other countries’ research studies with similar interest. Data and information will be collected through questionnaires and direct contact with concerned organization in Bangladesh.

1.8.4 Sampling Procedures

A sample of 50 respects will be a selected from the IT industry. This will be selected from employees and managers from the selected IT industry. Both prospective and table setup method will be used. Purpotive method will be

1.9 Interested parties in research

2.0 Assumption

Assumptions:

The data will be normally distributed, hence enabling the use of parametric analyses.

Limitations:

The possible limitation to be faced in conducting this research will be the accessibility of information directly related to Bangladesh. There are very few research papers written on IT outsourcing in Bangladesh. However, comparison can be done with other countries like India.

5.0 Time Frame (Gantt Chart)

No.

ITEM

PERIOD

1.

1st Thesis writing workshop

November 28, 2012

2.

2nd Thesis writing workshop

January 30, 2013

3.

Submit Research Proposal Synopsis(1 page)

February 18,2013

4.

Allocation of Research supervisor

February 22,2013

5.

Submit Research Proposal (10 page)

March 28, 2013

6.

Research Proposal Presentations

April 4-5, 2013

7.

Conduct Research

April-July 2013

8.

Write Research Paper

July-Aug 2013

9.

Submit Final Research Paper

August 12, 2013

10.

Research Paper Presentations

August 19-23 ,2013

11.

Graduation

September 5, 2013

References

Book

Beulen, Erik., Ribbers, Pieter., &Roos,Jan.(2001). Managing IT Outsourcing (2nd ed. ).New York:

Routledge

Articles:

Islam, MD Aminul., &Shobhani,Farid Ahmmed.(2010).Determinants of Outsourcing decision in the manufacturing industry in Bangladesh.Busines Review, Vol 5 (2), 127-147.

Websites

KPMG (2012). Bangladesh Beckons: An Emerging destination for IT/ITeS Outsourcing Destination

Retrieve from: http://www.basis.org.bd/resource/KPMG-Bangladesh-January-2012.pdf

http://www.outsourcing.com/

Offshore location attractiveness index published

http://www.atkearney.com/gbpc/global-services-location-index