Business process outsourcing ranking plummets

This may have a negative impact on business growth.

KARACHI:

Pakistan’s attractiveness as a destination for offshore locations for Business Process Outsourcing (BPO) has decreased over the last two years and the country’s global ranking fell by eight positions, according to Global Services Location Index (GSLI) ranking report published by AT Kearney.

The significance of reports like these lies in their ability to deter customers from markets. Basically, rankings are used by people and corporations while considering outsourcing.

Infotech CEO Naseer Akhtar said that this will have a negative impact on BPO business growth because the world looks at such rankings before “engaging with right partners.”

GSLI, established in 2004, gives each country a score based on a combination of scores in three categories – financial attractiveness, people’s skills and business environment.

While this might be a worrying phenomenon for the growing BPO industry in the country, Systems Limited CEO and Pakistan Software Houses Association Chairman Ashraf Kapadia said that rankings were just perceptions, saying that a significant proportion of Systems Limited income comes from BPO, and Pakistan’s BPO industry was still growing.

The report also states that the country is far away from market leaders in the category of people’s skills and their availability.

Pakistan ranked fourth with Vietnam in the category of financial attractiveness and ranked lowest in terms of infrastructure and security, according to the report.

Kapadia said that the perception of troubled security discouraged people from choosing Pakistan for outsourcing. “We have never lost a day of business due to security issues, but we lose out on the perception front,” he said.

Akhtar, however, believed the ranking may have decreased because of two reasons - researchers had not been able to capture the correct data and methodology. “I think we should ask AT Kearney as to how they collected the data on which they based their results,” he said.

He pointed to marketing as the second reason, saying that stakeholders including governments, business forums and relevant associations had been unable to market Pakistan properly.



Published in The Express Tribune, May 3^rd, 2011.