Why sri lanka as an FAO destination
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Why sri lanka as an FAO destination



This is a presentation I did on the development of Sri Lanka as a prime destination for outsourcing, especially of Financial and accounting services.

This is a presentation I did on the development of Sri Lanka as a prime destination for outsourcing, especially of Financial and accounting services.



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Why sri lanka as an FAO destination Why sri lanka as an FAO destination Presentation Transcript

  • IT/BPO Services – Why Sri Lanka? – The Statistics
  • Sri Lanka 2 Macro Economic Indicators Infrastructure Education & Literacy Legal Framework IT/BPO Industry
  • Key Socio-economic Indicators GDP growth 8.3% in 2011 GDP per capita US$ 2,836 GDP US 58.5 billion Inflation rate 7.8% Exchange rate USD =129, Pound 208, Source: Central Bank of Sri Lanka Despite the Global Economic Crisis, Sri Lanka is one of the few countries with a positive GDP growth Major sectors Service (55% of GDP), Industry (29%), Agriculture (12%) Labour force 8.1 million persons Literacy rate 92% Life expectancy at birth 74.9 Years View slide
  • Sri Lanka 4 Macro Economic Indicators Infrastructure Education & Literacy Legal Framework IT/BPO Industry View slide
  • Sri Lanka’s IT & Telecom Infrastructure 5 mobile service providers Three international submarine cables providing redundancy 04 fixed line operators 22 internet service providers 33 external gateway operators Broadband, leased line and satellite connectivity widely available Sri Lanka was among the first South Asian countries to establish a 3G, 4G and LTE Networks
  • Property and Office Space Office space is available and relatively affordable, and new developments are underway Office rent, class A office space in major business hub, US$/m2 Source: CB Richard Ellis 2011, A.T. Kearney analysis 192 227 252 262 316 343 368 440 459 472 918 978 India China Pakistan Vietnam Egypt UK Malaysia Philippines Bangladesh Sri Lanka Mauritius UAE Real Estate Companies in Colombo do not report office space to be a problem Several BPO companies are housed in class A facilities downtown as opposed to in suburban campuses In addition, class B real estate in Colombo is easier to come by and of better quality than in many emerging market capitals Private actors have created dedicated IT/BPO industry parks - not yet at capacity
  • Quality of Infrastructure Sri Lanka also offers superior infrastructure to most other low-cost countries Overall Infrastructure Quality Score Source: World Economic Forum Global Competitiveness Report 2011- 2012, A.T. Kearney analysis 6.3 5.7 5.6 4.7 4.6 4.2 3.9 3.8 3.5 3.4 3.1 2.8Bangladesh Vietnam Philippines Pakistan India Egypt China Mauritius Sri Lanka UK Malaysia UAE Infrastructure Overall infrastructure quality, including transportation and utilities, surpasses that of South Asian and almost all Southeast Asian competitors This is a welcome difference to other locations, often plagued by inefficient infrastructure Colombo’s Bandaranaike International Airport has more flights to India than any other country Second International Airport being constructed in Hambanthota
  • Sri Lanka Macro Economic Indicators Infrastructure Education & Literacy Legal Framework IT/BPO Industry
  • Increase in IT Qualified Graduates
  • Growing Resource Pool in Accounting
  • Note: Gross enrolment ratios measure total enrolment as a percentage of the total population corresponding to the relevant age group Source: UNESCO 2011, A.T. Kearney analysis. Secondary Enrollment Rate, % Adult Literacy Rate, % UAE 98% 70% Vietnam 70% Malaysia 33% Bangladesh 44% India 59% Pakistan China 76% Egypt 81% Philippines 82% Mauritius 89% Sri Lanka 90% UK 96% Philippines 95% UK 99% 93% Pakistan 55% Bangladesh 56% India 62% Egypt 66% Mauritius 88% UAE 90% Sri Lanka 91% Malaysia 92% Vietnam 93% China Enrollmentrates With free primary and secondary education and an extensive university system, Sri Lanka has had a very strong education system for decades Sri Lanka’s literacy rate is the highest in South Asia, positioning it to train a large number of high- quality personnel Literacy and Secondary Enrollment Literacy and secondary enrollment rates are on a par with developed countries
  • Tertiary Education Executives rank Sri Lanka’s tertiary education among the best in Asia Quality of Management Schools 6.0 5.0 4.9 4.7 4.7 4.4 4.3 4.1 4.0 3.9 3.3 3.0Egypt Vietnam Bangladesh Pakistan Mauritius China Philippines UAE Sri Lanka India Malaysia UK 5.0 4.9 4.7 4.7 4.5 4.2 4.2 4.1 3.6 3.3 3.1 2.4Egypt Philippines Bangladesh Pakistan Mauritius Sri Lanka UK India China Malaysia UAE Vietnam Quality of Math & Science Schools Education quality Sri Lanka’s management schools are ranked among the best in Asia; their math and science programs also rank highly Sri Lanka currently has 23 accredited universities, more than 25 private institutes offer diplomas in IT Foreign universities are partnering with local institutions to offer degree programs, and some are setting up their own campuses in Sri Lanka
  • Professional Education • Chartered Institute of management accounting (CIMA) • Association of chartered certified accountants (ACCA) • Institute of chartered accountants of Sri Lanka (ICASL) • Institute of certified management accountants (CMA) • Association of accounting technicians (AAT) 5 professional accounting bodies • CMA Australia • CMA (Canada) • CPA (Australia) Other emerging professional qualifications • Offered at selected institutes • E.g. Lanka BPO Academy BCI certified professional qualifications
  • ICT Literacy 40 % - 2011 75 % - by 2016 Dept of Census and Statistics
  • Sri Lanka Macro Economic Indicators Infrastructure Education & Literacy Legal Framework IT/BPO Industry
  • Legal Framework LEGAL FRAMEWORK Sri Lanka follows the British commercial law principles. Signatory to international treaties on intellectual property (IP) rights Sri Lanka has also enacted electronics transactions act and computer crimes act Signatory to the latest united nation’s e- contracting convention Sri Lanka Accounting standards based on IAS and fast track adoption of IFRS
  • Personal Safety Contrary to perception, Sri Lanka is one of the lowest-risk emerging markets in terms of personal safety Source: World Economic Forum Global Competitiveness Report 2011-2012, UN Office in Drugs and Crime 2011, A.T. Kearney analysis Business Cost of Terrorism, Score 6.1 5.9 5.7 5.6 5.2 5.2 5.1 5.0 4.5 4.3 3.8 3.0Pakistan Egypt Philippines India Vietnam UK Bangladesh China Sri Lanka Malaysia Mauritius UAE 0.6 1.2 1.3 1.5 2.6 4.4 5.3 5.3 7.4 Pakistan Vietnam China Mauritius Philippines Bangladesh Malaysia UK UAE India Sri Lanka Egypt Homicides per 100,000 people, Most Populous City N/A N/A N/A Safety & Security Sri Lanka scores very well from a terrorism and crime perspective MNCs in the country report not to have had to stop operations in Sri Lanka, whereas they have suffered disruptions in most other global locations due to industrial disputes, natural disasters, and terrorist attacks Colombo scores exceptionally well in terms of personal safety, as demonstrated by its low homicide rate
  • Sri Lanka Macro Economic Indicators Infrastructure Education & Literacy Legal Framework IT/BPO Industry
  • VISION of SLASSCOM “IT/BPO Industry to become 1 Billion USD in Export Revenue and create 80,000 Jobs ” 2009 2010 2011 2012 2013 2014 2015 210 310 387 484 605 750 946 IT/BPO Export Revenue in mill USD Actual Estimated Source: ICT Export Value Survey (Aug 2011- PWC publication)
  • Did you know? Capital markets in Boston, Nairobi, Colombo, Mauritius, Ghana, and Croatia, use an advanced Automated Trading / Depository Software for Stock Exchanges, that was designed and developed by a Sri Lankan Company: Millennium IT Leading Swedish ERP provider has its research and development facility located in Sri Lanka employing over 500+ software developers: Industrial and Financial Systems Airline systems software for Emirates, Braathens, and Air Arabia was developed by a Sri Lankan company: John Keells Computer Services
  • Did you know Mobile application developed by a local company was ranked among the top 3 Enterprise Mobile Applications at the Ericsson Mobile Application Awards: hSenid International Pacific Asian Travel Association gold award for the best WEB site, was designed and developed by a Sri Lankan company: Affno A Sri Lankan company engaged in Open Source middleware (capitalized by Intel) was the winner of Red Herring Asia 100 award: WSO2
  • Sri Lanka is clearly emerging as a Global IT/ BPO Sourcing Destination Sri Lanka is another Asian country that has succeeded in positioning itself as an alternative to India. - IBM Global Location Trends Report 2010 Ranked among the Top 25 in the AT Kearney Global Services Location Index (GSLI) in 2011 Ranked number 5 in financial attractiveness, ahead of India, China and all of CEE Gartner's 30 Leading Locations for Offshore Services (2010-2011). Included among the Top 10 in Asia pacific. 12th in the top ranking destinations in IBM Global Location Trends Report Ranked among the top 10 emerging global destinations by Global Services Magazine. Sri Lankan’s geographical location, infrastructural facilities, direct access to the Indian market, high quality standards of the workforce, open economy and various free trade agreements make it an attractive outsourcing destination. – Global Services Destinations Compendium 2010 Sri Lanka is a hidden gem for outsourcing - A.T Kearney 2012
  • Sri Lanka being recognized as a Global Center of Excellence for Financial Accounting Outsourcing (FAO) Source: Tholons
  • New York Times Southern China has its assembly plants. India has customer support centers, research laboratories and low-cost lawyers. And Sri Lanka’s contribution to global outsourcing? Accountants — thousands of them, standing ready to crunch the world’s numbers. Wages in Sri Lanka for financial outsourcing are about one- third less than in neighboring India, and hiring educated employees is easier in Sri Lanka, according to executives who do business in both countries. – 29 November 2010
  • Industry Wages For typical positions in the knowledge services sector, Sri Lanka offers amongst the lowest wages in the benchmark countries Annual IT Programmer compensation cost, US$ Note: All wages are annual and fully loaded. Fully loaded compensation includes benefits, taxes, and bonus. Source: Mercer HR Consulting 2011, Watson Towers 2011, A.T. Kearney analysis 11,291 11,371 10,170 8,996 8,683 7,800 44,297 40,504 33,704 23,576 16,868 Vietnam Philippines India Sri Lanka Pakistan Bangladesh UK UAE Mauritius China Malaysia Egypt 13,894 Annual BPO Analyst compensation cost, US$ 3,574 4,104 4,200 4,653 5,374 5,451 5,913 9,121 28,679 17,895 14,145 10,398 UK UAE Mauritius Malaysia China Egypt India Pakistan Philippines Bangladesh Sri Lanka Vietnam Professional Compensation Sri Lanka offers remarkably low costs, considering the value offered According to international salary surveys, compensation costs for sample IT positions are 10% lower than India and 20% lower for BPO functions In addition to low costs, companies consistently report low attrition Attrition rates in Sri Lanka tend to be just under 20%, whereas rates in India and the Philippines typically range from 20-25% in IT to 30-35% in BPO
  • Workforce and Employment Source: ICT workforce Survey 2010) 14,268 15,179 15,871 17,827 21,914 4,000 5,450 8,634 11,384 13,701 18,268 20,629 24,505 29,211 35,615 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2006 2007 2008 2009 2010 Est IT Workforce ITES/ BPO Workforce Total Workforce
  • Global Presence Global Brands having offshore centers in Sri Lanka – Due to Quality – Better cost arbitration Select clients of Sri Lankan firms Select MNCs operating in Sri Lanka
  • What Sri Lanka Offers to the World… • 100,000 A/L qualified students each year • IT Graduates – 4000+ per year • Non technical University graduates • Accountants • Lawyers & Law students (British System) Untapped resource pool • 1 Private IT park already available • 2 Government IT parks being promoted • 3 submarine cables with international bandwidth Infrastructure • High-end, Niche IT/BPO Systems & Services Our Offering
  • For Further Details Contact: Dhananjaya Rajaguru InfoMate (Private) Ltd 04,Leyden Bastian Road, Colombo 01, Sri Lanka E-mail : dhananjaya.ssc@keells.com Telephone : +94 11 214 9724 Mobile : +94 71 547 8636