The Hindu Business Line : Sri Lanka gets IT going

Recently in Colombo The first-ever summit to focus on capacity building for the information technology and business process outsourcing industry was held in Sri Lanka, last week.

It saw all stakeholders come together to take pragmatic stock of both the global opportunity to get a $2 billion chunk of the outsourcing pie and the challenge of finding the trained hands to do it.

And to help the process, leading icons of the Indian offshored services business were on hand, to share their own experience – of setting up or operating Lanka-based units. Having just signed a deal with leading Lankan conglomerate John Keells Holdings to jointly leverage the island’s expertise in key verticals like financial services and insurance, Mr Raman Roy, Chairman and Managing Director of Gurgaon-based outsourcing player Quatrro and the pioneer of Indian outsourcing, explained what it took to become a world player in this competitive arena.

Mr Neeraj Bharagava, Group CEO of WNS another Indian outsourced services ’biggie’, which has a Colombo-based operation, suggested that education was the key to Sri Lanka’s success: “Clients love coming to Lanka; There is great work attitude here.”

But the huge gap between those qualified to enter universities every year – 125,000 to 140,000 students – and the available seats in graduate university courses – 17,000 – was a cause for concern.

The IT-enabled industry in the island, currently employed around 11,200 persons, but by 2009, there would be shortfall of 3,500 IT graduates which would be a road block on the plan to grow the IT and ITES business from today’s $275 million to $2 billion in 3 years, added Mr Madu Ratnayake, General Manager of Virtusa , a home grown Lankan IT company which also had operations in Hyderabad and Chennai. The Prime Minister, Mr Ratnasiri Wickramanayake, who attended almost the entire proceedings, promised pragmatic action to address the human resource gap: the Lankan Information and Communication Technology Agency (ICTA), the nodal IT agency of Government, reports directly to the President’s Secretariat.

Total revenue

The total revenue of Lanka’s IT business might be less than a third of what Infosys earns in a year, but that was no reason to replicate the Indian game plan, speaker after speaker suggested. The message was: We have to do our own thing – selecting our ‘maidan’ and our strategy with care – just as the Lankan cricket team did a decade ago. And niche financial, insurance and legal verticals should be the chosen areas for Lanka to establish her own brand, said ICTA’s COO, Mr Reshan Dewapura.

The experience of Virtusa and WNS would suggest that there were enough synergies for the two nations to join hands in some arenas and take on global competition, said spokespersons of the two Indo-Lankan players.

The lower value of the Sri Lankan rupee vis a vis the Indian rupee – Rs 113-114 to the US dollar versus Rs 41-42 – was seen by some of the local players as a small if temporary advantage, when it came to dollar earnings. But speaking to Business Line on the sidelines of the Colombo event, Mr Raman Roy, felt the advantage if any for India-based companies hoping for a foothold in Sri Lanka would be minimal because while almost 90 per cent of a BPO’ ;s operating costs in India could be met by rupees, only half the costs of a similar operation in the island state could be met from local funds. Nevertheless there were interesting opportunities for any Indian player, he added. If one had an operation in Chennai and Bangalore, a new centre in Colombo made more sense than one in Gurgaon.

The summit was followed by the island’s largest-ever career fair for student-aspirants hoping to make IT happen for themselves.

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