The
fourth meeting of OPEN DC was held on May
14, 2005 at Tyson's Corner, in suburban Virginia.
A number of outstanding presentations were
made, followed by lively panel discussions.
The event was dedicated to the subject of
"Outsourcing Opportunities in Pakistan".
The
first speaker, Anthony Mitchell, provided
an "Overview of the BPO and IT Services".
Speaking on the basis of his long experience
in this field, including in India and Pakistan,
he presented a number of observations on the
subject and also discussed emerging trends.
Mr. Mitchell noted that the "Y2K bug"
(i.e., concerns over widespread computer failures
at the turn of this century in the year 2000
unless existing computer programs were corrected
to recognize the century in all date fields)
provided Indian firms a unique opportunity
to perform off-shored work and thus build
up business relations with US clients.
However, he also noted certain weaknesses.
The Indian firm of Infosys, for example, announced
a policy of not accepting orders worth less
than $1 million. Mr. Mitchell noted
that this indicated a "financial view"
of the business and lack of concern for the
client and in building up business partnerships.
He also noted that development of a brand
name for one's products was not given enough
importance in the South Asian business culture.
Other things that Pakistani firms could do
to strengthen their ability to do business
in the global market include an emphasis on
proper written contracts, providing routine
status reports to clients, and increasing
their political involvement within the US
in order to have their voices heard.
Mike
Essex, Regional Chief for South Asia and North
Africa at the International Finance Corporation
(IFC) spoke briefly next. He said IFC
was providing equity participation to the
tune of $300 million in Pakistan in a number
of sectors including telecommunications and
information technology. He said that
all large banks in Pakistan had by now been
privatized and the next major step was to
strengthen the banking infrastructure in Pakistan.
He considered Pakistan to be better than most
countries in the middle east region as a destination
for investment capital.
A
field study conducted at the Harvard Business
School on the subject of "BPO Opportunities
in Pakistan" was presented by three Pakistani
students at that school, Messrs. Asim Hussain,
Hyder Kazimi, and Tarim Wasim. Based on
an impressive array of data clearly presented
in graphical form, they provided a number of
insights. They showed that despite the
emergence of South Asia as a destination for
off-shored Call Center operations, in fact the
number of call centers relative to total population
was miniscule compared to places like Australia
and other countries. They identified three
major hurdles that stand in the way of increasing
off-shored business to Pakistan relative to
India, as follows: (1) Poor global image, which
is currently that of being a dangerous country;
(2) Lack of branding for it's products; and
(3) the smaller Pakistani diaspora relative
to India. On the other hand, they
identified a number of strong points that favor
Pakistan in this regard, as follows: First,
salary levels for these operations, which range
from $3,000 to $8,0000 are lower than
India where they range from $5,000 to $15,000.
Second, the employee attrition rate is less,
and this is an important consideration for foreign
clients who like to deal with people they have
become familiar with. Pakistan also provides
a 15 year tax holiday for investments in information
technology, has no import taxes in information
technology goods, and permits 100% repatriation
of profits. They also provided data on
the total number of IT professionals in Pakistan
(350,000) vs. the US (2-3 million). Finally,
they provided a number of strategies that Pakistani
vendors could utilize, as follows: (1) Niche
Product Strategy: That is launch product in
the US, and then support from Pakistan; (2)
Lower Cost Alternative: That is, present Pakistan
as lower cost not just to the US but to India
as well; and (3) Overflow Work: That is, take
work that Indian firms cannot handle.
The study also included two additional service
industries, namely the Insurance and Architecture.
In the former, claims processing and policy
administration were two specific links in the
value chain that were identified as having potential
for off-shoring. In architecture, the
design and development work was similarly identified.
Possible strategies to develop these off-shore
industries were also considered, including one
of acquiring smaller firms in the US in these
industries and then off-shoring these links
in the value chain.
A
panel discussion was then held to discuss the
"Buyers' Perspective on Outsourcing".
Imran Aftab, Director for Global Outsourcing
at AOL, Inc. Provided some useful insights from
this perspective. With respect to call
centers, he discussed he discussed how details
like clarity of speech (as opposed to merely
mimicking the US accent) on the part of the
service provider is a significant success factor.
He also discussed the value of off-shoring not
just in terms of lowering cost but in providing
24/7 service to the customer as well as for
purposes of business continuity. He noted
that despite perceptions, in terms of realistic
concerns for security Pakistan is at about the
same level as India. Finally, he noted
that off-shore suppliers should give importance
to treating their staff well both in terms of
presenting a favorable image to the client companies
and in terms of ensuring high retention rates
for staff. Gary Blasiar, President
of Alert Communications (which is partly owned
by the Pakistan-based The Resource Group) described
his experiences with outsourcing. He too
considered Pakistan to have a strong potential
as an off-shoring destination.
The
event ended with closing remarks from Ali Asghar,
President OPEN Washington DC, and was followed
by a half hour or so of networking where panel
members and the audience chatted informally. |
