What differentiates Sri Lanka for Business Process Outsourcing

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Unlike many industries, business process outsourcing (BPO) has continued to grow through the pandemic. COVID-19 caused an increase in activity for banks, insurance companies, government agencies and so many others, who struggled to cope internally and turned to outsource partners for help. Increased comfort with remote working and the need for strong business continuity arrangements have also had a positive impact on offshoring. Alongside the growth in global BPO over recent years is the emergence of lesser-known offshore destinations, offering greater options and value to buyers. Choosing the right-fit location is imperative for success. Cost-effectiveness, technical skills, workforce size, cultural affinity, security, and language requirements are some of the deciding factors when selecting a BPO location. 

Situated on the southeast of the Indian Peninsula, Sri Lanka has not only emerged as one of the world’s top tourist destinations, but Sri Lanka is also a niche destination for business outsourcing. The country has won awards and accolades from the Global Outsourcing Association, Kearney, Gartner, Tholons, among others.

Sri Lanka was ranked in Gartner’s 30 leading Locations for Offshore Services, and in the Top 6 in the Asia Pacific. Sri Lanka ranks among the Global Top 25 destinations in Kearney’s 2019 Global services Location Index and was ranked first in terms of financial attractiveness. Further, The Global Services Magazine ranks Sri Lanka among the top 10 global destinations. 

Sri Lanka has thrice won the Offshore Destination of the year awarded by the Global Sourcing Association, including in 2019.

So what makes Sri Lanka a top-ranking IT and business process outsourcing destination? Sri Lanka has carved a reputation for reliability, business continuity, access to talent and high quality service and software development.  This is thanks to a tech savvy workforce, robust IT infrastructure, and Government support (for example, tax break incentives). 6% of GDP is spent on primary education alone. The country ranks highest in South Asia and the United Nations Human Development Index for literacy. Sri Lanka has many state schools and universities, and international degrees and agreements with international universities including Monash, Curtin, Staffordshire, Manchester, University of London, and Metropolitan. Tertiary education in Sri Lanka is also ranked among the best in Asia. This generates a large workforce in Sri Lanka which is multi-skilled with a high level of business language skills relative to competitor destinations. 

Credit: Vinu Abeygunawardene

The government’s commitment to increase IT usage and literacy in rural areas is evident with initiatives such as the “Nenasala” mobile library of digital content for villages, and “web patashala”, establishing tech laboratories in schools. This is creating further possibilities for youth engagement for BPO operations around the country. The government is also closely working with the industry association SLASSCOM (Sri Lanka Association of Software and Services Companies), on a range of initiatives to build more capacity for the expansion of the IT / BPM industry.

The BPM industry in Sri Lanka boasts over 80 companies employing more than 25,000 people – and growing fast. Sri Lanka’s infrastructure is well-equipped to handle IT and IT-enabled services. The Human resources development index of Sri Lanka and its infrastructure and health rank above India and the Philippines. The country is able to ensure data privacy, security, and confidentiality by taking necessary network security measures more effectively than many competitors. 

One of the niches where Sri Lanka specialises is finance and accounting.

There is a large pool of internationally qualified accountants knowledgeable of standards in source markets such as UK and Australia.

Sri Lanka was ranked the 5th most attractive destination globally for Finance and Accounting by Tholons and 12th in the IBM Global Location Trends Report. The country was also recognised as a Centre of Excellence for Finance and Accounting Outsourcing. 

In addition to finance and accounting, Sri Lanka has strengths in legal, HR services, customer management, insurance, banking, telecommunications, and data analytics services.

One angle being taken by Sri Lanka is its push to make the country a destination of choice for SMEs. In a market where many outsourcing destinations look to fight over the scraps from the tables of large corporates, an SME targeted push differentiates Sri Lanka.

SLASSCOM, the national chamber for the IT/BPM industry in Sri Lanka, acts as the catalyst of growth for the Sri Lankan IT and BPM industry. The chamber facilitates trade and business, education and employment, encourages research and innovation, and also provides support towards a forward thinking and progressive national policy framework. Member organisations of SLASSCOM account for approximately 90% of the IT/BPM industry export revenue.

Sri Lankans are friendly, highly productive, creative, and adapt fast to different cultures and environments. This smooths integrations and transitions with overseas clients. This is why companies such as the London Stock Exchange, WNS, HSBC, IFS, and Motorola all have back office delivery centres in Sri Lanka.

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Last updated on: November 11, 2023