OUTSOURCE SOFTWARE DEVELOPMENT TO BANGLADESH

Bangladesh is fast becoming the next big destination in software development outsourcing and offshoring.

Over the last few years the volume of software projects offshored here has doubled almost every year. More that 20,000 people are now working in this industry. 

A good summary of state of software outsourcing in Bangladesh and it's potential can be gleaned from a KPMG analysis that was done. Garter identified Bangladesh as one of the top 30 countries for offshore services in 2011.

The cost advantages of outsourcing software to Bangladesh is significant when compared with other possible destinations for offshore software development like India, Poland, Sri Lanka. The large number of computer graduates coming out from the universities every year coupled with the strong English speaking skills make it possible for the IT outsourcing industry to grow very fast. A large number of software projects has been executed here over the past few years and many international IT companies themselves have setup offshore development centers here. This has had the effect of bringing experience and skills to the resource pool.

Here are some of the factors driving the IT and software development industry in Bangladesh to a prominent position in the global software outsourcing locations.

Large Pool of Talent

Bangladesh has a population of more than 164 million and it is the world’s eighth most populated country. With an estimated 35% of the population between the age group of 20-35 with almost 100% literacy in that particular age group the country represents a significantly large young workforce. Around 10,000 IT related graduates are produced per year by more than 95 universities and 200 polytechnic or technical institutes (Hossain, M. 2016. Labor Market and Skills Gap in the ICT Sector in Bangladesh). This adds to an estimated IT skilled workforce of more than 200,000 people. Together this is a large pool of available talent that is being utilized by the growing IT outsourcing sector in Bangladesh particularly in large cities like Dhaka and Chittagong.

Industry focused Tertiary Education

Bangladesh has more than 150 universities, technical colleges and higher education institutes these include 43 public universities, 103 private universities, 2 international universities, 31 specialized colleges, and 2 special universities. Most of the higher education institutions offer one or more majors in IT or software engineering related fields. With the software industry growing over the past years fueled by the outsourcing of software projects to Bangladesh the need for graduates to be industry and job ready has become a focus. This focus has led to most universities offering industry focused tertiary education. Premier institutions like IIT offer 4 year courses soled focused for the industry with course mostly around software engineering, quality assurance, product management. This means the fresh graduates are ready to take up professional work right out of the university leading to shorter time for the outsourced software projects to hire and utilize resources.

Priority for IT in government policy

IT and software industry is one of the biggest priorities for growth and support by the government in Bangladesh. The software and IT outsourcing industry has received special treatment such as tax holidays, subsidized training etc. for the past decade or so. The government policy is based around a strategy and road map to boost the IT/ITES industry ( Bangladesh Computer Council. 2017. Strategy & Roadmap of BCC for Strengthening IT/ITES Industry). Among other things, th government is keen to establish IT parks. With World Bank support, the Sheikh Hasina Software Technology Park in Jashore was inaugurated in December 2017, and Banghabandu Hi-Tech City in Kaliakoir prepared to become operational. There are also plans to establish IT parks in other parts of the country, and tax incentives are provided to attract IT/ITES industries to the IT parks.

Expanding IT industry

The IT industry in Bangladesh has just started to show it’s true potential. As an industry it is still small, The growing IT/ITES revenues in Bangladesh is estimated at around $1 billion to $2 billion with an estimated above 6% yearly growth. This growth rate has been a sustained fact over the past few years. This expansion means the opportunities of the talent pool is increasing leading to a more trained, experienced and professional work force. The expanding IT industry particularly in software outsourcing and product development sector has led to great interest in more younger people to join this sector thereby enriching the overall industry. All of this leads to a positive feedback loop where more resources lead to more successful companies that lead to more software projects.

Increasing demand for software locally

As the economy of Bangladesh grows (Its economy grew more than 6% annually from 2011 and reached 7.9% in fiscal year 2018, the fastest in Asia and the Pacific in that year - ADB report 2019) the need for digitization both in public and private sector is growing. This has led to a boom in IT/ITES requirements in the local market. This boom has meant that more and more software companies can rely on the local market to sustain their growth. This enhances and augments the overall growth in IT from the outsourcing sector and thus contributes to the positive feedback loop discussed above.

Large scale adoption of freelancing

A large section of the younger population has started using freelancing on IT and IT related projects as source of income. Freelancing sites like Upwork consistently find Bangladesh as its leading source of freelancers. This is very much a growing trend, as this VoA article details. Freelancing leads to skills that are easily adopted in the industry. This increasing skill set and work experience in real projects during student life has led to a much more mature young work force than many other outsourcing destinations around the world.

Kaz Software - a leader in the outsourcing industry

Kaz software stands out as one of the top software companies in the IT services industry in Bangladesh. We have been doing software development outsourcing from Bangladesh since 2004. More than 20 companies from various countries of the world has offshored software projects with us over these years.

We believe we are the trend setters for proper development process, company culture and management required for the unique needs of outsourcing to offshore destination. This has been acknowledged by the industry with awards and informal communication putting us a one of the leaders in this sector.

Most recently we won the prestigious BASIS best outsourcing award several times.  BASIS represents software industry in Bangladesh and plays a significant role in the stability and standardization for the offshore software projects that have been outsourced to various software companies in Bangladesh.