Rapid growth in IT/BPM revenue
SLASSCOM says untapped potential lies outside Fortune 500 firms Sri Lanka has witnessed a brisk growth in export revenue in the field of Information Technology and Business Process Management (IT/BPM) with revenue for 2013 estimated to have increased to US$ 720 million from US$ 605 million in 2012 and projected to rise to US $850 million by end this year. According to a recent industry report by the Sri Lanka Association of Software and Service Companies (SLASSCOM), the primary IT/BPO business association in Sri Lanka, the industry has shown an impressive revenue growth trend of about 238% since year 2007 whilst total employment grew from 33,700 in 2007 to an estimated 75,100 employees in 2013, and the number of companies in the industry grew from 170 in 2007 to over 220 in 2013.
“According to the ICT export survey 2010, large companies contributed to over 70% of the export earnings whilst medium and small scale companies contributed the balance. In the BPM sector, over 90% of the contribution was by the larger players,” the Sri Lankan IT/BPM Industry 2014 Review, a SLASSCOM publication, prepared by PricewaterhouseCoopers in Sri Lanka stated.
The report noted that out of the total revenue of US $720 million achieved in 2013, IT sector claimed 77.5% of the total and BPM accounted for 22.5% with the top three markets being Europe (UK and Ireland), US and South Asia.
“Moreover, the Asia-Pacific region has shown faster growth than mature markets whilst the industry makes significant market presence in Australia/New Zealand, Asia Mature Markets and the Middle East,” the report disclosed.
Meanwhile, the report noted that outside of the Fortune 500 companies, a massive opportunity lies in the huge untapped markets of SMEs, public sector and family run entities which will require a different and more innovative service model. The industry body said that as the traditional outsourcing model for BPM continues to evolve towards more value added services, cost arbitrage has become secondary to value creation and industry knowledge in the decision, making process of who and where to partner.
“With cloud solutions becoming increasingly more stable and cheaper, opportunity exists to leap frog into next generation services such as demand based and online big data services,” the report highlighted.
Sri Lanka’s IT/BPM industry has set its vision to achieve USD 5 billion in exports by 2022 while generating 200,000 jobs and creating 1,000 start-ups in this process. The country’s overall strategic vision is backed by its approach to differentiation and target markets with planned initiatives for skills development and talent management. The industry adopts a six pronged approach to drive strategy to reach the desired target by 2022.