Bangladesh desires a cheap offshore destination for Dutch SMEs. But not every business can benefit from bargain programmers. “We had some time to quality control.”
Director ‘Manjur Mahmud’ of ‘Bangladesh’s ICT Industry Association Base Quality Forum Objectives’ begged the Dutch entrepreneurs almost at a meeting in Amsterdam this month: they have their IT outsourcing to one of 500 ICT companies in his country: “Multinational companies like ‘Dell’, ‘Novartis’ and ‘Samsung’ have been working out in Bangladesh and the cost advantage will not last forever,” he said.
Bangladesh, one of the countries where the offshore industry is growing, has for the first place in the top 30 offshore destinations captured in the annual list of Gartner. The country does 40% cheaper than popular destinations such as the ‘Philippines’, ‘China’ and ‘India’. The remunerations are not only lower than in the ‘Netherlands’ but also in comparison with neighboring ‘India’, the world’s most popular offshore destination. A Bengali programmer costs average $8 per hour, compared to $20 in ‘India’ and $10 to $15 in the ‘Philippines’.
Enormous employment potential
In addition, the country has a huge workforce. The ICT industry has 20,000 employees and in the capital Dhaka studying approximately 5,000 students with an ICT background. Bangladesh also has a group of 15,000 ICT freelancers in 2011 €7 million export value represented. “In Bangladesh freelancing many ICT professionals to earn more money, says offshore consultant and director of the consulting firm Consulting ‘Paul Tjia’ GPI.”
He sees that after the large enterprises Dutch SMEs increasingly ICT outsourcing work to foreign countries. This is due to the shortage of specialists in the ‘Netherlands’ and a strong desire for cost savings. Bengali ICT companies have more than 150 programmers in service, but the majority is smaller. That makes the country attractive for SMEs that the Indian offshore giants less attention and dedication can count. “I know a Dutch freelancer in Bangladesh; four-man staff has to work. This kind of examples I come more often against” says ‘Tjia’.
Cultural differences
The Frisian designer of geographic information ‘HawarICT’ (62 employees, expected revenue this year €2 million) is one such example. The company has twelve employees walking around the office in ‘Sneek’ and four times in the joint venture launched in 2005 in the Bengali capital Dhaka. Founder and director ‘CeesNieboer’ (48) spent twelve years ago for the first working computer work to the country because he lacked capacity for a large project. A friend told him those Bengali ICT specialists in skills not inferior to Dutch. “We suffered because of cultural differences or noise in the communication, but there were no technical problems. Everywhere in the world are working with Oracle and Microsoft,” says ‘Nieboer’.
He praises the infinite capacity of the Bangladesh that he designates as a financially attractive but because of the cultural differences challenging offshore destination. “We can grow unlimited. Last I placed a call for an iPhone developer. A day later, a hundred people responded. Bangladesh is not only the land of huge numbers, you feel not just a customer like in India, which is also becoming increasingly expensive to work on outsourcing.”
Good and cheap labor
Good quality and cheap labor was director and former IT worker Peter van Bergen Budget View the reason to go into business with the Bangladeshi ‘Grameen Solutions software’. The seven-month-old company from ‘Utrecht’ wants to help entrepreneurs in financial distress, among other software that analyzes the finances. ‘Van Bergen’ hit during a visit to Bangladesh impressed by the professionalism of the ICT Company that is affiliated with the inventor of microcredit, ‘Grameen Bank’. “I had expected more communication problems but they quickly understood what I wanted, and are flexible and friendly. If you quickly want to get things done by working together to outline and discuss, distance is difficult but we meet regularly.”
According ‘Shaer Hassan’, director of the Bangladeshi ICT outsourcing company Nacenia thrives in favor of clear requirements and specifications. A clearly documented working paper provides value in long distance relationships. He advises Dutch companies should aim for rather too much than too little to communicate with the offshore company. “But be careful with humor and I understand the cultural differences.”
Humor and emotions
‘Nieboer’ has had the experience of a joke in an e-mail was taken literally. He keeps humor and emotions therefore Skype calls and meetings in real life. Overcoming cultural differences is called the director the biggest obstacle to doing business in the country. “It’s a cliché, but an Asian never says no”. “In Bangladesh, parents are also important. A new employee volunteered for his first day because he had to be a teacher of his father and mother. Also, you should never assume the best guys, because they were the first to go to America and Australia.”
The Amsterdam designer and organizer of knowledge bases for ‘vakuitgeversDiskad’ Concepts (30 employees, turnover unknown) devotes only limited work to Bangladesh. The input and formatting work the past four years in the country took place, is automated. According partner ‘Arjaan Art’ (39) of ‘Diskad’ fluctuated quality of service too. “In low income countries, everything is solved with labor while we using ICT to improve processes. Once a trick to Bengali ICT specialists, they were bought out by the competitor. Thus we were some time to quality control. It was also difficult to make firm commitments. For a one-time job is a great destination Bangladesh, but for the design of sustainable automation processes not.”
Infrastructure
Gartner sees the infrastructure, language skills and intellectual property as the greatest obstacles. The Asian country is struggling with power outages and unreliable Internet connections. ‘HawarICT’ has ensured the supply of electricity with solar panels, over the Internet ‘Nieboer’ has no control. “Especially outside Dhaka is reliable Internet connections a problem. It happens sometimes that a few kilometers fiber is stolen, and then you’re a day without.”
‘Van Bergen’recognizesthem partly in the image. “If the power goes out then put them in the ‘Grameen generator’, and rarely falters Skype. But if software is copied locally to the market than Bangladesh is suddenly very far away, even though the property in contracts boarded up and transfer to us.”
