International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No.

2, June 2013

Prospects of Bangladesh as a Leading Outsourcing Destination in IT Sector

Tarun Kanti bose1, Md Reaz uddin2 and Md Nazmul huda3
1: Assistant Professor, Business Administration Discipline, Khulna University, Bangladesh, email:[email protected]. 2: Assistant Professor, Business Administration Discipline, Khulna University, Bangladesh, email: [email protected]. 3. Independent Researcher.

Abstract:
IT industry is becoming popular for the workers who want to do perform offshore or freelance job in business. Worlds leading researchers have announced Bangladesh as a leading outsourcing destination. Bangladesh is prospecting with IT outsourcing in regard of human resources, financial and political stability, macro and micro level infrastructure and market positioning with a huge competition. Besides these factors, the scenario has changed a lot within the long history in Bangladeshs IT industry since 1964. On the other side outsourcing is being the most popular method of doing things in least expensive way. IT outsourcing has the largest share in regard of job quantity. Technology has changed the world, and Bangladesh has a larger stake to compete with other market within IT outsourcing industry.

Keywords
IT, Outsourcing, Macro Economy, Micro Economy, Bangladesh

1. Introduction:
IT industry and Computer technology is not the same. Most of the time people misinterprets between these two terms. IT has emerged in a very long way of operations. IT isnt just a topic of computer science only; it covers most of the areas of every business. Its the reformed communication technology. Worlds first Mainframe Computer was installed in Dhaka University in 1964 and since then Bangladesh has seen many phases of history of IT. Now a new era has begun through the outsourcing media and Bangladesh is also competing with other nations in the top list of outsourcing destination countries. From these recent happenings in international market, Ive been interested in studying with the outsourcing market.

1.2 Objectives of this study:

The primary purpose of this study is To determine the prospects of Bangladesh as IT outsourcing destination. Besides these some secondary objectives are also included To evaluate the picture of different key variables for evaluating the picture of the prospect of Bangladeshs IT Outsourcing industry. To recommend for further development towards the industry development factors.

2: Literature Review and Conceptual Framework: 2.1 Outsourcing and IT Outsourcing:

Outsourcing has been one of the very delicious terms within various industries doing outperformance in their business. Bangladesh is a small country but within its limitations it has
DOI: 10.5121/ijmvsc.2013.4201 1

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also reached a scale of achievement as an outsourcing target. Especially IT industry in Bangladesh has been one of the most attractive targets to the foreign outsourcing organizations seeming for several years. According to Entrepreneur Magazine, outsourcing is the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual. Outsourcing has very many options such as IT Outsourcing, Marketing Outsourcing, Services Outsourcing, Financial Outsourcing and many others. Among various options, IT outsourcing is the most widespread type of outsourcing we see among the industries. The reason behind this, IT outsourcing cost least direct contact, just delivery of product or service ends the contract and it needs less efforts to handle than the others. A research says that 28% of the outsourcing jobs are IT outsourcing among the outsourcing works and it has the most availability in case of both resources and work types (Chowdhury, 2011). This represents how big the market is which acquires more than one fourth of total outsourcing industry.

2.2 IT Outsourcing Area

IT Outsourcing works has a wide line of diversification. If you visit the site of freelancer.com or odesk.com there will be a long list of categories for the jobs to work within IT or ITES. Though there are some trends coming with major areas to concentrate more. According to The Outsourcing Institute information technology outsourcing has been the fastest growing area for outsourcing. According to their measurement major areas the companies are concentrating are maintenance/repair, training application development, consultancy and reengineering, mainframe data centers. The Outsourcing Institute also found some coming up trends in outsourcing which are client/server, networks, desktop systems, end-user support, full IT outsourcing (Mashroor, 2011).

2.3 IT Outsourcing Business:

IT outsourcing businesses may be classified into major two categories, one is service, another one is through product support though this also have a bit similarities with services. Services include information outsourcing, call center services, financial/accounting information outsourcing using IT, procurement outsourcing, data center outsourcing, research, marketing and human resources marketing. These are getting so much popularity day by day. Internet is being a gathering space through the social networks. And besides these product outsourcing intermediary and consultancy has a huge demand throughout the outsourcing market. On the other hand, through software support contains application development which itself is the product, web development, data entry & analysis, survey etc. This requires more specified people than the service peoples regarding outsourcing. But this type of outsourcing makes organizations relax about their office spaces and work load. Both the categories are popular among the outsourcing market. Just the offshore workers need to be sure where they should start and which track of serving this industry will lead them to their target.

2.4 Global Market Situation:

Andrew (2010) mentioned two facets of outsourcing trends. First one is, declining value of US dollar will turn outsourcing industries back to invest for US software and services and this will be accelerating. Second one is, vertically oriented skills will be facing a huge demand where the outsourcing works will be more done for the next five years. In the same context Ravi (2010) mentioned that, green initiatives or cost effectiveness of their data centers through making green technologies will be the major concentration over the decade. Most of the companies will try to get ERP solution platform to manage their operations and decisions. And this will create the high demanding situation in the outsourcing market just because of less effort and highest value delivery. Same is also supported by Mohammed (2010) who mentioned that most of the customers are investing huge on ERP because most of the advanced organizations are using ERP and many are coming. In statistical term if we want to
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express, we will see the global outsourcing market has been increased at 16% over 5 years (Rahman, 2012). And it is counting. This represents how the global scenario of outsourcing market is going to be. Most of the industries will be dependable upon outsourcing industry within a few decades. Rahman (2012) also said that hybrid sourcing models and cloud sourcing are making a strong influence in the market.

2.5 Dominating Countries:

Stephanie (2010) says, in Asia, Indian region and China dominates as destinations in the outsourcing market. Besides this Sri Lanka and Philippines has also a strong influence in the market. Stephanie (2010) also mentioned that Central and Eastern Europe are also attractive destinations still fighting in the market. But the major role in off shoring IT business will be the making of strong delivery network (Karthik, 2010). Karthik (2010) also believes that India will be ahead of this point. From my point of view also I see south Asian region has the most potentiality to create a strong network of delivery chain. As Europes decrease of expert skills and USs increasing debt will force both into long term economic crisis, its time for the Asians to capture the market in due time.

2.6 Outsourcing IT in Bangladesh:

The New York based global banking securities and investment management firm Goldman Sachs has included Bangladesh in 'Next Eleven' after BRIC (Brazil, Russia, India and China) nations. SMEs within IT industry are the top adopter through this high time of outsourcing market development. However, as the business and service delivery eco systems are changing across markets, SMEs are now more exposed to offshore outsourcing options. This is what discussed mostly in the seminars on outsourcing and off shoring during eASiA 2011. Bangladesh has placed itself within the top 30 outsourcing destinations as a research of Gartner Inc. (eASiA, 2011). This also represents the demand of Bangladeshs works among the outsourcing market. As it is mentioned Govt. is putting the maximum tax facilities in this industry and there outsourcers from abroad are making the benefit of spending less in any work from Bangladesh. Not only SMEs, individual offshore workers and freelancers are also getting benefitted with this. Currently more than 100 organizations are exporting software and outsourcing to more than 30 countries (Barkatullah, 2011) and many are coming into this industry. In the last five years Bangladesh faced an average rate of growth at about 40% in IT and ITES industry (Chowdhury, 2011). If we consider these situations Bangladesh has attracted a lot of audience who have been seeking outsourcing partner throughout the globe. In aspect of these above, Bangladeshi freelancers are also performing well. In 2010, Bangladeshi freelancers have earned about US$7 million (Rahman, 2012). According to EPB, Govt. of Bangladesh (2012) total IT and ITES exports from Bangladesh has been increased about 24% from 2008 to 2011. This is a great sign to us that if we try to develop ourselves, we will be the top of the rankings as an outsourcing destination. Rahman (2012) thinks that when decision makers think, they judge costing, skills and manpower available at target location, both current and future, relationship building facilities etc. And in these areas Bangladesh scores well. Almost most of the less complex IT outsourcing jobs can be done by the Bangladeshi workers as such institutions are also growing up and freelancers are getting trained from them. BCC and BASIS offers several courses to specialize the freelancers in different fields such as smartphone programming object oriented programming and web development courses. Besides them some private organizations like Genuity Systems or BASE Limited are working in the training fields for the IT industry people. There are some other organizations specialized to their respective fields such as ISPAB is working for ISP firms and BACCO is specialized for Call Center organizations and outsourcing. Quality improvements in skill levels and delivery capabilities have been steady. Many of the Bangladeshi outsourcing vendors has achieved international certifications of CMM Level 3 and
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a few also managed to achieve Level 5. Besides these many organizations have achieved quality certifications from ISO through ISO:27001 certifications (Rahman, 2012). Bangladesh is an increasing population country, and among these 15-34 age groups are now 34% or total population which is relatively higher within global demography (Rahman, 2012). This is more than perfect for an industry related with ITES-BPO.

2.8 Earlier Researches and Research Questions:

If we want to mention the bigger researches, we would mention at first the Gartners research of top 30 destinations to outsource. This represented which countries are the toppers as outsourcing destination to the outsourcing market. Another large scale research was made by BASIS where we also directly participated as surveyor and organized all the graphical data. That research was not only meant for only outsourcing but also whole IT industry. We tried to see the compositions of industry trends, which type of jobs the companies are interested in, what types of skills we have available locally and which destinations are more influencing for us to export our services. This research was led by Fahim Mashroor, CEO, bdjobs.com also Senior Vice President of BASIS. In the decade of 2000, Dr. Muhammad Yunus delivered a keynote to a North American Conference which led UNDP Bangladesh to create a research named IT can be Bangladeshs Super Highway to Prosperity. On that decade Dr. Jamilur Reza Choudhury also made a great research on information technologies in Bangladesh. Within recent days, World IT Report 2010-2011 has represented various statistical information regarding Bangladeshs IT and ICT usage. With the help of their data, ITC also taken steps with CBI and KPMG to run a research on Bangladeshs IT Outsourcing which was organized by Rahman Huq in 2012. This study has been made out with the discussions of nine subjects taken can be crucial for IT outsourcing industry. It has been tried to define some questions in respect of those subjects to make specific decisions on those subjects which are described below. But these are not the least, there are in total 60 variables made out of nine subjects to derive the result to get closer to actual scenario. The base questions are How are the industry Human Resources skills to meet future trends of Bangladeshs market of outsourcing? How we see Bangladesh as a leading outsourcing location? What are the basic infrastructures supporting IT Outsourcing Vendors? How is the market and how supporting industries are making this industry capable? Does law, order and security issues effects on this industry? Political stabilization is needed or not for this industry? What are the Macro and Micro Level Environment conditions for this industry? Are Educational Institutions capable enough to meet industry needs? Does Professional Degrees matters in this industry or not?

3. Research Design and data analysis:

Here we have chosen the easiest way to make research on the respective topic survey and statistical analysis. In short time it has been a great tool to explore the result we are looking for. A structured questionnaire has been developed (see Appendix Questionnaire Form) with the help of previous research works and other resources we had collected within availability. The survey was made out of nine subjects as it is discussed and there are several topic questions which have made through the research result are described below Studying IT outsourcing is a bit difficult while it needs to be expressed in numerical forms. But for the purpose of the study a survey is made and there were 60 questions on nine different subjects and aspects Industry Human Resources, Bangladesh as an Outsourcing Location, Infrastructures, Market & Supporting Industries, Law, Order, & Security, Political Stability, Macro & Micro Environments, Educational Institutions and Professional Degrees. E-mail survey through online has been conducted and 210 questionnaires were spreaded form where 187
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respondents have replied the responses. All 187 responses are brought into the calculation. Under the question subjects I had several questions to identify the right facts for the industry. We have assembled those answers and made statistical analysis by dividing all the information under each subjects and came with nine different aspect results. All the information is collected is ordinal data collection which is collected through Likert scale method. I have tried to explain my answers through two steps: Means and Standard Deviations of the facts which represent the prospect value in numeric way and Factored co-relation which resulted showing the most influencing facts among the information. I have used SPSS to disseminate all the data and figured my calculation with the help of that software. Through the analysis the study has been taken into four distinctive methods of expressing statistical data. With the help of SPSS software descriptive statistics, co-relation analysis and factor analysis which contains two measurements which measures variance and component matrix has been shown throughout the analysis and interpretation part to showcase different scopes of prospect fields for IT outsourcing industry.

4. Findings and Analysis:

4.1 Industry Human Resources:
Human resource is a key factor for the industry. Every organization needs people to run operating procedures. Any industrys whole operation environment is run by its human resources planning system. This is why human resources are a very good point to measure for IT outsourcing industry to keep an eye on its prospect. Eight topics were selected for the respondents to get measurements for necessary calculations. In table 4.1.1 (Appendix) is shown to describe the basic scenario of human resources within IT outsourcing industry. Here from the calculation mean value of all prospect topics has revealed at 2.89 out of 5.00 which is a very fair result seems for the industry. Standard deviation is calculated resulting 1.20 which is not that high which showcases the steadiness prospect rate of this industry in aspect of human resources. From the inner calculations derived by table 4.1.2 (Appendix) it seems that four components have the significant level of prospect value to all other components respectively. And from the cross evaluation by the component matrix low job turnover has the most positive co-relation with all the components which identifies this factor really very stable for the industry.

4.2 Bangladesh as an Outsourcing Location:

As it is discussed that Bangladesh is being one of the leading outsourcing destinations for years and it is continuing towards topper positions the six topics which has been discussed through survey responses deals with a great result to showcase. In the table 4.2.1 (Appendix) the mean comes up with the number of 2.82 which a bit lower than the result of previous subject but not at disappointing level. This detects that Bangladesh has obtained such potentiality though it needs improvement. Standard deviation of 1.09 also detects low variance of the result towards growth of the industry. Four major components have been derived from the table 4.2.2 (Appendix) show such significant variance levels. Through the matrix of the same table anyone can easily interpret that except competitive advantage all the other factors are having positive co-relations with the components in most cases. This reflects that Bangladeshs IT industry needs more concentration to be more specific in terms of competition.

4.3 Infrastructure:
Infrastructural support is crucial when any industry needs growth. Government and private organizations should provide input simultaneously to create a constant growth rate for an industry. IT outsourcing in Bangladesh is still in its early age. To make it mature, infrastructural improvement is so important which have been discussed through survey with six crucial topics for IT outsourcing industry. Its fair but not enough if the mean is 2.54 at this stage shown in table 4.3.1 (Appendix). Standard deviation at 1.06 is better than previous two, but a huge investment in infrastructure for supporting IT outsourcing is needed to provide this a steady growth. Table 4.3.2 (Appendix) tells that three out of six components are playing the major
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roles. This table also generate a lead on flexible physical infrastructural system and a huge network of communication system throughout Bangladesh has a great impact on this industry. Better communication system is providing a very good support for IT outsourcing industry and it is improving.

4.4 Market & Supporting Industries:

Outsourcing market is so scattered though IT outsourcing variability has led Bangladeshs industry engaged in most of the markets because greater number of population comes with different skill sets and expertise. Representation in table 4.4.1 (Appendix) shows mean derived from eight topic responses is 2.76 which is a very fair one and standard deviation of 0.93 strengthen the result indicating very low amount of variance. Two major portions competitive market and focus on SME are having greater value behind those. Table 4.4.2 (Appendix) indicates that three significant components having largest cumulative variance it leads to know that focus on SME and public call tenders are being more attractive for this industry to make the industry bigger. Most of the IT outsourcing calls comes online and bidding on those projects are easy than usual tender systems, people who wants less complexity in business become interested.

4.5 Law, Order, & Security:

Law, order, & security always control the country as well as the businesses. A countys strong law enforcement system provides all necessary environments to run an industry on its own way till growth. Seven topics have been discussed under this subject. In table 4.5.1 (Appendix), mean comes 2.51 and standard deviation 1.04 which is fair, but a bit variant in its nature. This indicated there are a lot of issues need to be taken care of in regard of law, order, & security. Table 4.5.2 (Appendix) shows that three major components are significant than the remaining others and within the topics rare fraud rate seems the most attractive point to attract investors to get into this industry.

4.6 Political Stability:

Politics and business run on the same way. Sometimes government want to control businesses, sometimes businesses can acquire power to corrupt government. So it has a big deal with the industry. And five important topics have been discussed while survey. Politically stable rate averages at 2.63 shown in the table in table 4.6.1 (Appendix) and the standard deviation is 1.07 which is also a fair sum to evaluate the mean. Table 4.6.2 (Appendix) represents two components shows the major significant levels where three topics has positive co-relations with two components in most cases.

4.7 Macro & Micro Environments:

Macro and micro level economy is already been created for the IT outsourcing industry in Bangladesh. It can be said that a very good cultural and economic pattern is being established within the industry now days. And for an industry which is making path to get maturity stage macro and micro level environments has great impacts on the industry itself. Ten topics were selected for the respondents to get measurements for necessary calculations. From table 4.7.1 (Appendix) it gives an implication that 2.62 is the mean in regard of the prospect of IT outsourcing. Besides this standard deviation is 1.20 which is relatively not that high, but not too low. It can be derived from the results that macro and micro level environments have created enough potentiality to provide every type of support to IT outsourcing industry. And the standard deviation tells that this is a stable rate, but there are chances of higher variances. But the mean is a moderate level fair result which shows that economy doesnt always impose everything on this industry in development stage, rather the industry itself has something to contribute to the economy. Factor analysis has been done in table 4.7.2 (Appendix). While total variances are explored micro and macro level environments have five components out of ten
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shows large cumulative variance and while cross matrix is done in the later table, significance is majorly shown in the interest in having short term projects and entry & exit barrier. Both are important in practical life everywhere. In Bangladesh may be for IT outsourcing industry investment security is not that much needed or provided, but still people are interested in short term projects which ensures the security more than average in terms of investments. And entry & exit barrier for this industry is very easy. This is why it seems that very many people are getting engaged with this industry without having any proper business knowledge and guidance.

4.8 Educational Institutions:

May be people are engaging with this industry with a very potential growth rate but for the future market competition we need to have enough skilled labor forces which can be assured only with the educational institutions who makes graduates and skill sets for people. In table 4.8.1 (Appendix) mean resulted at 2.51 and standard deviation at 1.09 which is fair but not at satisfactory level. This means still education doesnt seem that necessary for the works are being performed within IT outsourcing industry in Bangladesh. But if educated people come up with ideas and innovation, there is a huge possibility to boost this industry at a very high rate. From table 4.8.2 (Appendix) we see two components have major significance out of all five components.

4.9 Professional Degrees:

Professional degrees have a great impact on the industry. People have demands on professional degrees in respect of IT outsourcing. And every industry runs by some professionals. This is why five topics are covered by the study under this subject. From table 4.9.1 (Appendix) mean comes 2.67 and standard deviation is at 1.15 which tells that prospect is in a moderate fair stage but variance level shows it needs development in a large scale. Table 4.9.2 (Appendix) explains that two major components are there having larger variance levels. Later it is derived that demands in international certifications in both coding and development has led local organizations to support the industry in several ways.

5. Implications and Policy Recommendation Framework:

Policy makers need to understand in this point that IT outsourcing industry is not anything standalone which should come up itself and run on its own way. This industry also needs environmental and macro level support to perform as a contributor to the economy. Unlike the other industries, this industry has also some limitations in Bangladesh. From the study taken in previous chapter, it is clear that Bangladeshs IT outsourcing industry is a huge potential, and if this can be nurtured through proper incubation and educational support, this industry will earn Bangladesh a lot of foreign currency than any other industry in Bangladesh. To me there are several issues to discuss with which we have pointed out here.

5. 1 Intellectual Property Rights is a very big Issue:

Intellectual property rights (IPR) maintenance and providing security for those properties should be maintained through government rules strictly, because fraud and piracy rate is at a very risky stage for any industry. Due to numerous incidents of software piracy made it still remaining the bad images of Bangladesh (Rahman, 2012). Govt. should take care of this soon under IT acts and rules.

5.2 Capability Planning:

Most of the times young entrepreneurs get into the line knowing no rules of operation which results in presenting something in very unprofessional manner which is also harmful for this industry. So, organizations should not only concentrate over their skills, also their communication power, abilities and interest matching also need to be taken care of. And the major problem is a worker cannot define in which area s/he would be expert of. This is why
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guiding them into the right track is also a necessary thing. Or, the misunderstanding the scale of offerings may cause harms to many potential skillful workers.

5.3 Infrastructure:
Dhaka cannot be a destination for workers now days. Its been a stuck city. Govt. should take initiatives to find somewhere else to nourish the culture of IT and send IT troops there in. As govt. is planning to make IT parks its a very good initiative, but we should plan something like Silicon-Valley.

5.4 Marketing Empowerment:

Though we are in leading position in outsourcing market, but we are not reaching at the highest level just because of having lack in marketing knowledge. So, our resource people should also acquire the power of marketing and this technical know-how will help them in their practical field while communicating. At least everyone tries to get quantitative jobs besides qualitative jobs.

5.5 Negative Perception Removal:

As we are a poor country, abroad people often takes misperception about the quality and skills of our people and there are some bodies outside Bangladesh are also active in anti-marketing against countries like us as they are also competing through global outsourcing arena. So, government should take initiatives to take steps against these types of propagandas so that Bangladesh gets rid of negative perceptions. Also our labor law should be revised in some terms to reach international class. There are some bad images of Bangladeshi politics and environment, Dhaka has been the 2nd unlivable city in the world and people wont take this as a very good example. But besides all these, Bangladeshi workers are doing really very well in their fields and I hope within 2020 Bangladesh will be within top 5 IT Outsourcing Destinations.

6. Conclusion:
The enterprises evaluating outsourcing destinations based on a number of factors specially the quality of services and the costing (Rahman, 2012). Bangladesh can offer very low cost labor for any industrial production. And like a labor oriented industry, IT Outsourcing must have Bangladesh within one of their lucrative destinations. Now Bangladeshi people can access WiMAX and 4G network and easily get connected to the world. Through mobile phone a person can contact to any corner of the country and even worldwide. So we are not lagging behind of technologies, we just need the right track to walk with right choices of industry. Bangladesh is a country of huge potential. Everyday people are coming out with new ideas here and small businesses are growing up. Government has taken a great initiative through promoting Digital Bangladesh among the people, especially the youth. Generations by generations are enjoying the excitement of technology, if we can put them into right bottle, they will bring us a huge amount of revenue through IT Outsourcing.

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International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Available from: http://www.basis.org.bd/index.php/media/news_detail/102[accessed 14 March 2012]. 5. BTRC (2011) Internet Subscribers in Bangladesh [online] Bangladesh Telecommunication Regulatory Commission. Available from: http://www.btrc.gov.bd/index.php?option=com_content&view=article&id=409:internetsubscribers-in-bangladesh&catid=49:telco-news&Itemid=502[accessed 14 March 2012]. 6. BTRC (2012) Mobile Phone Subscribers in Bangladesh [online] Bangladesh Telecommunication Regulatory Commission. Available from: http://www.btrc.gov.bd/index.php?option=com_content&view=article&id=455:mobile-phonesubscribers-in-bangladesh-january-2012&catid=49:telco-news&Itemid=502[accessed 14 March 2012]. 7. Choudhury, Jamilur R. (2002) Information Technology in Bangladesh. Sustainable Development Networking Programme, Bangladesh, UNDP. 8. Chowdhury R. (2011) What Is Outsourcing? (Outsourcing Definition) [online] LetsOutsource.com. Available from: http://www.lets-outsource.com/what-is-outsourcing-outsourcingdefinition/[accessed 14 March 2012]. 9. Chowdhury, Jahrat A. (2011) Bangladesh: A Promising Destination for IT Outsourcing. In:eASiA 2011 Publication. Dhaka: eASiA 2011 Publication Team. pp. 38-39 10. eASiA (2011) Seminar Brief In: Seminar Booklet. Dhaka: eASiA 2011 Publication Team. pp. 1936. 11. eASiA Secretariat (2011) Realizing Digital Nation [editorial] in eASiA 2011 Publication. Dhaka: eASiA 2011 Publication Team. pp. 12-15. 12. Entrepreneur Magazine Outsourcing [online] Entrepreneur Media, Inc. Available from: http://www.entrepreneur.com/encyclopedia/term/82610.html [accessed 14 March 2012]. 13. EPB, Govt. of Bangladesh (2010) Growth in IT/ITES Export from Bangladesh. Cited in: Rahman H. (2012) Bangladesh Beckons: An Emerging Destination for IT/ITES Outsourcing. January 2012. ITC, CBI and KPMG. p. 10. 14. Gartner (2010) Gartner Identifies Top 30 Countries for Offshore Services in 2010-2011 [online] Gartner, Inc. Available from: http://www.gartner.com/it/page.jsp?id=1500514[accessed 14 March 2012]. 15. Gove M. (2012) A History of Information Technology. IBM. Available from: http://historyofit.com/resource/whitepapers/100yearsofITinnovation.pdf[accessed 14 March 2012]. 16. Hapgood F. (2007) 20 Years of IT History: Connecting Devices, Data and People [online] CXO Media Inc. Available from: http://www.cio.com/article/139400/20_Years_of_IT_History_Connecting_Devices_Data_and_Peo ple[accessed 14 March 2012]. 17. Her Majesty Sheikh Hasina, Hon. Prime Minister. Govt. of Peoples Republic of Bangladesh (2011) [message] eASiA 2011 Publication. Dhaka: eASiA 2011 Publication Team. p. 7. 18. Imran H. (2012) Dhaka City Now in Top Ranked for Odesk Contractor Appreciation Days [online] Technology Tutorials. Available from: http://ebloglink.com/odesk-contractor-appreciationdays/[accessed 14 March 2012]. 19. Islam, ASM N. (2002) Prospect of IT in Bangladesh [website] Sustainable Development Networking Programme, Bangladesh, UNDP. Available from: http://www.sdnbd.org/sdi/issues/ITcomputer/Prospect%20of%20IT%20in%20Bangladesh.htm[accessed 14 March 2012] 20. Jeremy G. Butler (1997) A History of Information Technology and Systems [online] Arizona: University of Arizona. Available from: http://www.tcf.ua.edu/AZ/ITHistoryOutline.htm[accessed 14 March 2012]. 21. KallianceHistory of Information Technology [online] K Alliance, LLC. Available from: http://www.kalliance.com/articles/history-of-information-technology.htm [accessed 14 March 2012]. 22. Karthik H. interviewed by Rosenthal, Beth E. (2010) Areas Where Outsourcing Will Grow in the Next Five Years [online] Dallas: Alsbridge Inc. Available from: http://www.outsourcingcenter.com/2010-01-areas-where-outsourcing-will-grow-in-the-next-five-years-article37455.html[accessed 14 March 2012]. 23. Mashroor, AKM F. (2011) Bangladesh Software and IT Service Industry: Recent Trends & Dynamics. In: Mashroor, AKM F. et al. ed. Software & IT Service Catalog 2011. Dhaka: Bangladesh Association of Software & Information Services, pp. III-VIII 9

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 24. Mohammed H. interviewed by Rosenthal, Beth E. (2010) Areas Where Outsourcing Will Grow in the Next Five Years [online] Dallas: Alsbridge Inc. Available from: http://www.outsourcingcenter.com/2010-01-areas-where-outsourcing-will-grow-in-the-next-five-years-article37455.html[accessed 14 March 2012]. 25. Muhit, Abul Maal A. Finance Minister. Govt. of Peoples Repu blic of Bangladesh (2011) in Bangladesh: Your IT Destination [CD-ROM] Dhaka: eASiA 2011 Secretariat and Support to Digital Bangladesh (a2i) Programme, Prime Ministers Office, Peoples Republic of Bangladesh 26. Nicolas H. (2011) Bangladesh's IT savvy youth boost outsourcing [video] Dhaka: Al Jazeera Network. Available from: http://www.aljazeera.com/news/asia/2011/06/2011629203246703946.html[accessed 14 March 2012]. 27. NTFII (2010) New report: Bangladesh beckons - an emerging destination for IT/ITeS outsourcing [online] ITC. Available from: http://www.intracen.org/bangladesh-beckons-an-emergingdestination-it/[accessed 14 March 2012]. 28. Outsource Offshore (2010) Gartner Lists Bangladesh in the Top 30 IT Outsourcing Destinations [online]OutsourceOffshore.info. Available from: http://www.outsourceoffshore.info/index.php/2010/12/gartner-lists-bangladesh-in-the-top-30-itoutsourcing-destinations/[accessed 14 March 2012]. 29. Quader, Syed M. (2012) E-mail to Md. Nazmul Huda. RE: Request to fill up a survey form for the purpose of research on outsourcing prospects in Bangladesh. [online]. [accessed 14 March 2012]. 30. Rahman H. (2012) Bangladesh Beckons: An Emerging Destination for IT/ITES Outsourcing. January 2012. ITC, CBI and KPMG. 31. Ravi K. interviewed by Rosenthal, Beth E. (2010) Areas Where Outsourcing Will Grow in the Next Five Years [online] Dallas: Alsbridge Inc. Available from: http://www.outsourcingcenter.com/2010-01-areas-where-outsourcing-will-grow-in-the-next-five-years-article37455.html[accessed 14 March 2012]. 32. S. Girma and H. Grg (2002) Outsourcing, foreign ownership and productivity:Evidence from UK establishment level data. In: Research Paper Series: Globalization, Productivity and Technology. 2002(16). Nottingham: Leverhulme Centre for Research on Globalization and Economic Policy. 33. Scott G. and Roger H. (2001) Outsourcing - Establishing a Winning Approach [online] Q/P Management Group, Inc. Available from: http://www.qpmg.com/outsrce2.htm[accessed 14 March 2012]. 34. Stephanie O. (2010)Outsourcing Definition and Solutions [online]CXO Media Inc. Available from: http://www.cio.com/article/40380/Outsourcing_Definition_and_Solutions?page=6#13 [accessed 14 March 2012]

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International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013

Appendix:
Table 4. 1.1: Descriptive Statistics (Human Resource) N Available Human Resource Plenty of Training Formal Agencies Availability Workforce Professionalism No Politics Advantage Fair Payment Sufficient Technical Expertise Job Turnover Low Valid N (listwise) 187 187 187 187 187 187 187 187 187 Minimum 1 1 1 1 1 1 1 1 Maximum 5 5 5 5 5 5 5 5 Mean 2.92 2.99 2.38 2.73 3.56 3.14 2.94 2.51 2.89 Std. Deviation 1.375 1.236 1.283 1.185 1.117 1.189 1.254 .958 1.20

Table 4.1.2: Total Variance Explained (Human Resource) Initial Eigenvalues Component Total 1 2 3 4 5 6 7 8 1.353 1.252 1.103 1.040 .892 .847 .792 .720 % of Variance Cumulative % 16.907 15.649 13.791 13.005 11.155 10.589 9.898 9.006 Total % of Variance 16.907 15.649 13.791 13.005 Cumulative % 16.907 32.556 46.347 59.352 16.907 1.353 32.556 1.252 46.347 1.103 59.352 1.040 70.507 81.096 90.994 100.000 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.2.1: Descriptive Statistics (Bangladesh as an Outsourcing Location) N Perfect Destination Competitive Advantage than neighbors Globally Accepted Work Fair International Ranking Full Communication Facility Friendly Setup Valid N (listwise) 187 187 187 187 187 187 187 Minimum 1 1 1 1 1 1 Maximum 5 5 5 5 5 5 Mean 3.19 2.97 3.14 2.61 2.56 2.47 2.82 Std. Deviation 1.151 1.233 .869 1.151 1.141 1.012 1.09

11

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Table 4.2.2:Total Variance Explained (Bangladesh as an Outsourcing Location) Initial Eigenvalues Component Total 1 2 3 4 5 6 1.260 1.156 1.036 1.007 .829 .712 % of Variance 21.004 19.270 17.260 16.786 13.815 11.865 Cumulative % 21.004 40.274 57.534 74.320 88.135 100.000 Total 1.260 1.156 1.036 1.007 % of Variance 21.004 19.270 17.260 16.786 Cumulative % 21.004 40.274 57.534 74.320 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.3.1: Descriptive Statistics (Infrastructure) N Infrastructural Support can be Managed Flexible Physical Infrastructure System Good Energy Supply Enough Stable Communication Govt. Helps Updating Technologies Authorities Help Bringing Unavailable Technology Valid N (listwise) 187 Minimum Maximum 1 5 Mean 2.51 Std. Deviation 1.161

187 187 187 187 187 187

1 1 1 1 1

5 5 5 5 5

2.77 2.35 2.72 2.41 2.47 2.54

.970 1.137 .841 1.148 1.099 1.06

Table 4.3.2:Total Variance Explained (Infrastructure) Initial Eigenvalues Component Total 1 2 3 4 5 6 1.310 1.132 1.068 .934 .844 .712 % of Variance 21.841 18.863 17.802 15.559 14.070 11.866 Cumulative % 21.841 40.703 58.506 74.065 88.134 100.000 Total 1.310 1.132 1.068 % of Variance 21.841 18.863 17.802 Extraction Sums of Squared Loadings Cumulative % 21.841 40.703 58.506

Extraction Method: Principal Component Analysis.

12

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Table 4.4.1:Descriptive Statistics (Market & Supporting Industries) N Market is Competitive Consortium is a Regular Local Industries are Engaging IT New Comers are Getting Help SMEs get Focus Tenders go to Public Call Supporting Associations are Strong Developers Bringing Large Scale Jobs Valid N (listwise) 187 187 187 187 187 187 187 187 187 Minimum 1 1 1 1 1 1 1 1 Maximum 5 5 5 5 5 4 5 5 Mean 2.94 2.76 2.76 2.76 2.94 2.37 2.74 2.79 2.76 Std. Deviation 1.088 .926 .944 .810 .971 .933 .841 .890 0.93

Table 4.4.2:Total Variance Explained (Market & Supporting Industries) Initial Eigenvalues Component Total 1 2 3 4 5 6 7 8 1.441 1.178 1.072 .982 .896 .837 .808 .786 % of Variance 18.012 14.729 13.404 12.278 11.198 10.458 10.098 9.825 Cumulative % 18.012 32.740 46.144 58.422 69.619 80.077 90.175 100.000 Total 1.441 1.178 1.072 % of Variance 18.012 14.729 13.404 Cumulative % 18.012 32.740 46.144 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.5.1:Descriptive Analysis (Law, Order, & Security) N Protection Rights are Strict Frauds are Rare Authorities Provide Securities and Safeguards No Terrorism Mafia and Terrorists doesn't Involve Rules and Laws are Sufficient Sales Agreements goes with Govt. Rules Valid N (listwise) 187 187 187 187 187 187 187 187 Minimum Maximum Mean Std. Deviation 1 1 1 1 1 1 1 5 5 5 5 5 5 5 2.79 2.42 2.34 2.50 2.48 2.11 2.95 2.51 .908 1.144 1.136 1.152 1.049 .958 .963 1.04

13

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Table 4.5.2:Total Variance Explained(Law, Order, & Security) Initial Eigenvalues Component Total 1 2 3 4 5 6 7 1.294 1.161 1.063 .999 .925 .842 .717 % of Variance 18.480 16.589 15.190 14.267 13.211 12.021 10.240 Cumulative % Total % of Variance 18.480 16.589 15.190 Cumulative % 18.480 35.069 50.259 18.480 1.294 35.069 1.161 50.259 1.063 64.527 77.738 89.760 100.000 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.6.1:Descriptive Statistics (Political Stability) N Politics Doesn't affect Cover from Political Dispute Govt. is friendly Govt. is Directly Involved Govt. encourages Innovation Valid N (listwise) 187 187 187 187 187 187 Minimum 1 1 1 1 1 Maximum 5 5 4 5 5 Mean 2.48 2.55 2.37 2.95 2.80 2.63 Std. Deviation .792 1.206 1.004 1.248 1.083 1.07

Table 4.6.2: Total Variance Explained (Political Stability) Component 1 2 3 4 5 Initial Eigenvalues Total 1.384 1.134 .995 .801 .685 % of Variance 27.678 22.689 19.901 16.022 13.709 Cumulative % 27.678 50.367 70.269 86.291 100.000 Extraction Sums of Squared Loadings Total 1.384 1.134 % of Variance 27.678 22.689 Cumulative % 27.678 50.367

Extraction Method: Principal Component Analysis.

14

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Table 4.7.1: Descriptive Statistics (Macro & Micro Environments) N Too Many Jobs, Too Many Firms Innovative Ideas are Coming Meets Global Experts Doesn't Need Investment Security Market Interest Rate Doesn't Matter Investments are Secured with Legal Terms Investors are Interested in Short Term Projects Entry and Exit is Very Easy Foreign Exchange Rates Favor Licensed Products Cost Less Valid N (listwise) 187 187 187 187 187 187 Minimum Maximum 1 1 1 1 1 1 5 5 5 5 5 5 Mean 2.90 2.63 2.96 1.92 2.55 2.80 Std. Deviation .922 1.299 1.351 .867 1.258 1.349

187 187 187 187 187

1 1 1 1

5 5 5 5

2.71 2.60 2.63 2.56 2.62

1.268 1.237 1.235 1.253 1.20

Table 4.7.2: Total Variance Explained (Macro & Micro Environments) Initial Eigenvalues Component Total 1 2 3 4 5 6 7 8 9 10 1.253 1.214 1.177 1.123 1.041 .960 .914 .813 .798 .706 % of Variance 12.532 12.141 11.772 11.229 10.405 9.602 9.145 8.125 7.984 7.065 Cumulative % 12.532 24.674 36.445 47.675 58.080 67.681 76.826 84.951 92.935 100.000 Total 1.253 1.214 1.177 1.123 1.041 % of Variance Cumulative % 12.532 12.141 11.772 11.229 10.405 12.532 24.674 36.445 47.675 58.080 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.8.1: Descriptive Statistics (Educational Institutions) N Institutions are Sufficient Institutions are Highly Equipped Industry Awareness Need to Be Grown Up 187 187 187 Minimum Maximum 1 1 1 5 5 5 Mean 2.79 2.60 2.49 Std. Deviation .982 1.202 1.028 15

International Journal of Managing Value and Supply Chains (IJMVSC) Vol.4, No. 2, June 2013 Graduates Have Entrepreneurial Skills Graduates Have Industry Matching Experiences Valid N (listwise) 187 187 187 1 1 5 5 2.44 2.25 2.51 1.205 1.040 1.09

Table 4.8.2: Total Variance Explained (Educational Institutions) Initial Eigenvalues Component Total % of Variance 1 2 3 4 5 1.237 1.150 .976 .870 .767 24.742 22.990 19.529 17.405 15.334 Cumulative % 24.742 47.732 67.261 84.666 100.000 Total 1.237 1.150 % of Variance 24.742 22.990 Cumulative % 24.742 47.732 Extraction Sums of Squared Loadings

Extraction Method: Principal Component Analysis. Table 4.9.1 Descriptive Statistics (Professional Degrees) N Enough People With Professional Degrees Demands of International Certification Interests in both Coding and Development Degrees Plenty of Institutions Outside Universities Local Organizations Support Valid N (listwise) 187 187 187 187 187 187 Minimum 1 1 1 1 1 Maximum 5 5 5 5 5 Mean 2.78 2.67 2.67 2.79 2.57 2.67 Std. Deviation 1.113 1.091 1.148 1.242 1.168 1.15

Table 4.9.2: Total Variance Explained (Professional Degrees) Initial Eigenvalues Component Total 1 2 3 4 1.306 1.037 .968 .875 % of Variance 26.129 20.745 19.357 17.504 Cumulative % 26.129 46.873 66.231 83.735 Total 1.306 1.037 % of Variance 26.129 20.745 Cumulative % 26.129 46.873 Extraction Sums of Squared Loadings

.813

16.265

100.000

Extraction Method: Principal Component Analysis.

16