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Large offshoring majors including third party vendor WNS and the captive player HDPI (offshore captive of HSBC) set up their centers in Sri Lanka in 2004. Slowly yet steadily the country has been attracting offshoring businesses, and new centers. The Sri Lankan BPO industry currently employs over 4,000 people and had estimated revenues of $42 million in 2006, according to a report by ICTA (Information & Communication Technology Agency).
Most of the BPO services were provided to the US, Europe and Australia. Some of the prominent BPO vendors in Sri Lanka include:
Company
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Services/Other details
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| WNS |
High-end Legal Services for 2 UK clients, employs 100 FTEs. Insurance for Aviva Insurance (From July 2004-7), now captive employs 350 FTEs |
| Dialog Telekom |
Customer support call center, interacting through voice, web chats, email, fax and SMS. Employs 500 FTEs |
| Amba research |
Investment research support services. The company recently got funded by Helion. Employs 350 FTEs |
Auxicogent
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Back office services for the Shipping, Transportation, Logistics and Travel verticals. John Keells holdings and Quattro are the key investors in Auxicogent |
Office Tiger
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Data processing services, Office tiger has a capacity to house 400 people in Sri Lanka. |
HSBC Data Processing Limited
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Voice & non voice Inquiries on Customer accounts, A/c openings, closings, frauds, deceased account holders, Currently employs 2000 FTEs |
TimeX BPO
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Provides Call center services to financial and insurance domains. Timex BPO is a subsidiary of Fergasam Garments Industries and Timex Garments (Pvt) Ltd. |
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Source: ValueNotes Research
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BPOs in Sri Lanka provide a wide range of outsourced services including accounting, data processing, call center, research support and publishing services.
Why Sri Lanka?
Success of initial entrants often helps enhance confidence of others waiting to follow. However one wonders, how a relatively small destination like Sri Lanka could attract bigwigs like HSBC and WNS. According to Rajesh Dhuddu, AVP New Product Development, AuxiCogent, "Sri Lanka has a strong cultural affinity with India. HSBC and OfficeTiger have traditionally operated in the southern cities of India so it is natural for them to extend to Sri Lanka as an alternative destination. Vendors with UK origin also stand to gain from locating here, since there is an active trade promotion agreement between Sri Lanka and UK".
Apart from being a low-cost destination, tax incentives provided by the government have also contributed partly towards attracting investments in BPO. Political instability, quality of manpower and inadequate infrastructure are some of the challenges that companies face while locating in Sri Lanka. Adds Dhuddu, "Doing business in Sri Lanka comes with its own set of challenges. Traditional models of doing business may not always work, a BOT model is a good arrangement before entering a country you have no knowledge about, and Auxicogent can definitely help clients and Indian vendors understand Sri Lanka. We have the backing of John Keells, the most respected conglomerate in Sri Lanka along with Quatrro led by Raman Roy."
With growing saturation among the large offshore destinations in India, we may witness greater growth towards locations such as Sri Lanka. BPOs within Sri Lanka are looking to expand operations and we can expect entry of more BPO vendors within the next few years. The depreciating Sri Lankan rupee compared to the appreciating Indian rupee as well as manpower issues on the home front will drive more Indian vendors to evaluate destination Sri Lanka.
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