Group 4 a Literature Review

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Business Strategy (W501) Term Paper

Software Industry of Bangladesh:

Literature Review

Prepared forSheikh Morshed Jahan Associate Professor

Prepared byGroup 4; Section A; BBA 20th

(04) Aurin Shaila Nusrat(06) Munkasir Masud Bhuiyan

(09) Tashfia Rawnak Anika(10) Hasan Shahriar Sifat

(11) Muhammad Saiyedul Muttaqin(18) Sohan Al Akbar(29) Rubyat Tasfia Rahman

(46) Saleh Ahmed(49) Anik Muntasir Chowdhury

(38) Avirup Sarkar

Institute of Business AdministrationUniversity of Dhaka7 November 2015



Literature Review: Sub-Group 1

Software in Ready-Made Garments (RMG) Industry

Sohan A l Ak bar (Roll 18)

Bangladesh government amended copyright laws for software and other intellectual

properties in 2000, instituted ICT Task Force in 2001, approved ICT policy in 2002, and

established an ICT incubator along with an e-governance program under the ICT Task Force

in 2003. The IT sector was declared a key priority by the previous government (2007-2013)

since it fits their ong oing campaign to create a “Digital Bangladesh” by 2021. However, poor

infrastructure, including frequent power crises, and slow and unreliable internet connections

are the most immediate problems. As of today, the estimated worth of this industry is around

$400 million and according to BASIS, there are over 800 registered companies along with

few hundred unregistered small and home-based software and IT ventures.

The absence of policy reforms for software export and import, strict regulation, tax waiver for

internet use, bank loans and content development efforts by the government make the

survival of new IT companies difficult. Despite the high price of internet bandwidth, absence

of submarine cable, lack of infrastructure and software Technology Park this sector has

some untapped opportunity.

In case of our neighboring country, India‟s software industry it can be concluded that theirsuccess over the last decades is mainly due to (1)the role of Indian IT diaspora i.e. the

U.S. educated Indian professionals joined the IT industry in Silicon Valley and created a

positive image of the capabilities of Indian professionals, (2)government’s early policy of

duty-free imports of computer systems provided that the importers would export software

and services worth twice the value of the imported computer systems within a specified time,

(3) creation of NASSCOM in 1988 and later establishment of STPs in 1990 ( software

technology parks ), (4) the decision of moving up the value chain in order to build client

value which in cludes expanding the software company‟s capacity to service a wider range ofsoftware development tasks as well as moving into new services such as product design and

Information services outsourcing.

The garment industry of Bangladesh has the significant role in its economy and software

usage for different activities within the industry has become mandatory to cope with other

garment exporting nations. Bangladesh mainly produces five products – T-shirts, sweaters,

trousers, men‟s and women‟s shirts. Moreov er, we are dependent mainly on two markets

namely the EU and North America (the US and Canada) though we reduced our

dependency on these two markets from 93% to 85% in last five years (From fiscal 2009-10to 2013-14). The US-based fashion companies are expected to boost their sourcing from



Bangladesh in the next two years. McKinsey, a global management consulting firm,

described Bangladesh as the next hot spot in apparel sourcing. The renowned firm forecasts

export-value growth of 7-9% annually and our apparel export will double by 2015 and nearly

triple by 2020 provided that we can successfully overcome a few challenges including

developing infrastructure and skilled workforce.

Certain types of software are used in the garment sector. RMG PRO is a high impact

Enterprise Resource Management System that enhances capability and adaptability. It

provides skillful and effective operation and setup smooth administrative control over

Readymade Garments Industries. Different computer aided designing, computer aided

manufacturing, and tailoring and other general software use in all fields are modified to work

efficiently in the garment sector.

References

Ahamed, F. (2013). Improving Social compliance in Bangladesh's Ready-made Garment

Industry.

Ahmed, J. U. (2014, April 05). Software industry: Bright future.

Berg, Dr. Achim, Saskia Hedrich, Sebastian Kemph. (2014). Bangladesh's ready-made

garment landscape: The challenge of growth. Mckinsey and Company.

Bhatnagar, S. (n.d.). India's Software Industry. Indian Institute of Management Ahmedabad.

Mohammad Yunus, T. Y. (2012). The Garment Industry in Bangladesh.

Au rin Shaila Nusrat (Roll 04)

Software industryhas been a relatively a late entrant in our ICT market. Even today there are

only a few firms that provide dedicated software services and even fewer that have adopted

any form of quality standards. However, like any learning curve, more and more firms are

coming into this fray; systematic procedures and practices are being implemented so that

quality software houses are being produced.

The basic clientele for the local software houses has usually been the corporate houses .i.e.

the institutional market. That being so it naturally follows that most of the software are

database related.

While few years back, visual basic was the predominant choice for programmers of late

there has been a gradual shift to use other tools to provide better service to the customer.

Furthermore with the passage of time firms have also realized the importance and benefits

of installing an ICT system in a company.



The average yearly growth rate of these industries here has been over 40 % for recent five

years, and this growth rate is expected to continue. This optimistic growth is supported by

good software export trends and large demand for IT automation in domestic market.

Recently in Bangladesh, large-scale automation projects have been widely implemented in

the sectors of telecom, banking, finance, pharmaceutical, and garment/textile industries.

Domestic demand for software is expected to increase more.

The size of the ICT market excluding telecom in Bangladesh is estimated to be US$ 300

million in total; the software industry shares 10% of the market.

For several industries of Bangladesh, the local software companies are designing different

kinds of software-

● Education Institute Management Application: Daffodil Education ERP,

myCampus, Deshmati Institution Management and Academic, ODHYYON,

Educational ERP (EERP)

● e-Governance Solution

● ERP & Integrated Business Application: Aprosoft ERP Business Suite, ATI-ERP,

DreamApps, SatERP- Satcom Enterprise Resource Planning System, Oracle ERP

Implementation, PrismERP

● Accounting & Financial Software: Fixed Asset Register, Fellow Pro, General

Ledger & Finance, Highlights (Accounting &Inventory Management Software ),

Money Talker Accounting Solution

● Animation, Multimedia, Graphics, CAD & GIS

● Banking Application: Ababil, BankUltimus, Biometric ATM Solution, Fintelligent+,

FloraBank

● Capital Market Solution ( Investment& Merchant Bank, Share Management)

● Communication Solution

● IT Enabled Services

● Hospital Management: ATI MEDiTOP, G-Care HMS, Hospital Management &

Information System● Content & Document Management

● CRM, Marketing & Sales Automation: Business Express Solution, ChaloMedia,

mFast, SDS, Field Mobility, Crystal-Location Intelligence, Hosted CRM Solution

● Customized Software Development Service

● e-commerce & Portals

● Security, Biometric & Alert Systems

● ·POS & Inventory Management System: DatabizRestaurá, FMGC Software,

OSmaster (retail ERP), PPIC (Procurement, Production Planning and InventoryControl)



References Ahmed, J. U. (2014, April 5). Bright Future: Software Industry. The Daily Star .Bangladesh Trades. (n.d.). List of Software Companies in Banglades . Retrieved 2015, fromBangladesh Trades: http://www.bangladeshtrades.com/bangladesh-business/Computers-Internet/computer-software-companies.html

BASIS.Bangladesh Software and IT Service Industry. Dhaka: BASIS.

BASIS. (2011). Software and IT Service Catalog. Dhaka: Bangladesh Association of Software andInformation Services.

Business Promotion Council. (n.d.). Software Industry . Retrieved 2015, from Business PromotionCouncil: http://bpc.org.bd/ibpc_software_industry.php

Wiki Invest. (n.d.). System Software . Retrieved 2015, from Wiki Invest:http://www.wikinvest.com/industry/Computer_Software




Software in Banking Industry of Bangladesh

Saleh A hm ed (Roll 46)

Bangladesh Software Industry: No more in the sidelines Software and IT service industry in Bangladesh has come a long way. It now is a crucial

source of national income and high quality employment. The presence of high number of

young entrepreneurs is one of the distinctive features of this industry. The resilience of these

tech savvy entrepreneurs is the driving force of Bangladesh IT industry.

According to BASIS survey, there are over 800 registered software and ITES (IT Enabled

Service) companies in Bangladesh. The total industry size is estimated to be around Tk.

1,800 crore (US$ 250 million). Approximately 30,000 professionals, majority IT and other

graduates, are employed in the industry.

Banking Sector continues to be the major focus for a large portion of the IT industry.

Manufacturing and Service Industries have also created sustainable demand for IT solutions.

According to BASIS survey, there are over 160 BASIS member companies who have export

in their portfolio.

India Software Industry: The new Silicon Valley? The Software Industry of India has been a tremendous success story. It exports softwares to

more than 60 countries and to half of all fortune 500. The growth has been 30% annually for

the last 20 years. Although this fabulous industry is the from seeds of private initiative, the

government‟s facil itating role helped forge it into a world class treasure.

There are some key factors behind the success of India‟s Software Industry: 1) Human

capital 2) Early mover advantage 3) Government facilitation 4) Indian professionals in Silicon

Valley 5) Entrepreneurial IT training.

Modern Banking: It’s all about Softwares In Banks, many software are used for various purposes. The software used for opening bank

account by deposit and loan customers, and recording their transactions is called Core

Banking Software. For managing ATM and POS network, a Switching Software is needed.

For credit card issuance and transaction authorization, Credit Card Software is used.

Payment Gateway Software is used for settlement of e-commerce transactions. A Mobile

Banking Software may be used for opening mobile account and recording such transactions.

Bangladesh Banking Industry and Softwares Huda, Momen and Ahmed (2004) have commented that the banking sector in Bangladesh is

clearly recognizing the importance of information technology to their continued success.

Other than CBS, banks use a large number of application software for their day to day



operations. It is seen that, on an average 23, minimum 6 and maximum 80 application

softwares are being used in the banks. Among the software, 55% are developed by the

banks themselves, 22% are local and rest of the 23% are foreign software.

The Core Banking Software(CBS) available locally are “Flora Bank Online” of Flora Systems

Ltd., “Bank Ultimas” of Leads Corporation, “Ababil” of Millennium Software and “Stealer” of

ERA Infotech.

ReferencesBASIS.Bangladesh Software and IT Service Industry. Dhaka: BASIS.

Bhatnagar, S. (2006). India’s Software Industry. World Bank.

Business Promotion Council. (n.d.). Software Industry . Retrieved 2015, from Business PromotionCouncil: http://bpc.org.bd/ibpc_software_industry.php

Khan, M. S. (2014). Development of ICT Based Products and Services in the Banking Industry . Dhaka:BUBT.

Shirin, A. k., & Prianka, N. T. (2013). Information Technology in Banking. Institute of Bankers,Bangladesh: IT in Banking.

Aviru p Sarkar (Roll 38)

The Bangladesh banking sector relative to the size of its economy is comparatively larger

than many economies of similar level of development and per capita income. The total size

of the sector at 26.54% of GDP dominates the financial system, which is proportionately

large for a country with a per capita income of only about US$370. The non-bank financial

sector, including capital market institutions is only 3.22% of GDP, which is much smaller

than the banking sector. The market capitalization of the Dhaka Stock Exchange was

US$1,025 million or 2.19% of GDP as at mid-June 2002. In contrast, the size of the totalfinancial sector in India, including banks and non-banks as well as the capital market is

150% (March 2002) of its GDP, with commercial banks accounting for 58.3% of GDP. [1]

Software and IT service industry in Bangladesh has crossed a long road over the last few

decades. It has matured. The industry no more remains at the sideline. It joined the

mainstream. Not only the industry is contributing significantly in the national income, but also

it has been playing very crucial role in creating high quality employment for a sizable portion

of young graduates of the country. The presence of high number of young entrepreneurs is



one of the distinctive features of this industry. In last decade many tech savvy young

graduates, some of them returning from abroad after finishing education, have started their

IT ventures. Despite various local and global challenges, these young spirited entrepreneurs

have done remarkably well in building sustainable business organizations through their hard

work and passion. Surely, the enthusiasm and resilience of the young entrepreneurs are the

main driving force of Bangladesh IT industry. [2]

The business environment in the financial industry can be unpredictable and is often

characterized by volatility and instability. In general, this environment is:

● Highly competitive

● Constantly challenged by megamergers

● Experiencing decreasing profit margins

● Required to adjust quickly to changes in the economy

● Extremely dependant on technology

● Strictly regulated

● Experiencing serious data security issues

● Facing critical consumer privacy requirements. [3]

The financial services, banking, and insurance industries demand reliable and secure

transmission of sensitive data. Their business requires the real-time exchange of data and

files in different formats with many partners. They need to automate complex processes

involving data access and transformation, and also need to eliminate man made errors and

delays in their operations. [4]

All of the above discussion proves that use of automation and softwares in the financial

sector is a must for remaining competitive in the market; it also helps banks optimize

operational efficiency and maximize profits. Nowadays almost every banks do most of its

operations through automated softwares. (Amin and Rahman Pg. 178) [5]

References Aims of Bangladesh. (2002). Swinging Banking not Very Promising. Dhaka: BangladeshResearch.BASIS.Bangladesh Software and IT Service Industry. Dhaka: BASIS.

Network Automation. (2013). Business Process Automation for Financial Sector. California: NetworkAutomation.

Syeedul Al Amin, S. S. (2010). Application of Electronic Banking in Bangladesh: An Overview.Bangladesh Research Publication Journal .




Software in Healthcare and Education Industry

Munkasir Masud B huiyan (Roll 06)

With a population of 130 million people, Bangladesh is one of the largest developing

countries in the world. According to BASIS (the Bangladesh Association of Software &

Information Services), some of the advantages of the Bangladeshi software sector are low

labour costs, high programmer productivity and a widespread knowledge of English.

At present, 42 public and private universities and some institutes and colleges are offering

degree courses in the area of Information Technology. It is estimated that every year, around

3000 IT graduates are coming out of these institutions. In addition, there are large numbersof IT training centres, some of which are a foreign franchise. The rough enrolment in these

centers is around 12 thousand per year (BASIS, 2002).

In Bangladesh, there are more than 200 software houses (although selling hardware is often

an important part of their services). Most of these IT companies are small or medium sized;

a company of 50 –100 people can be considered large. There are no extremely large

enterprises, as is often the case in neighboring India. Although exact numbers are not

available, the number of foreign IT companies is limited.

Around a dozen BASIS members are certified to the ISO 9001 quality assurance standard.

Measured against the Software Engineering Institute‟s Process Maturity Levels (there are

five levels) almost all Bangladeshi software development companies fall in the lowest level

(the Initial Level). To participate in the global software development industry, the desired

minimum level is Capability Maturity Measurement Integration (Level 3). (Haque, 2005)

According to the Zahir and Chowdhury (2015), export earnings from Software and ITES was

USD 102.6 million in the fiscal year 2013-14 registering a high growth of 0.98 per cent from

the previous year (2012-13).

After late nineties some local companies of Bangladesh launched e-Learning software.

The initial software‟s were main ly computer oriented. Later different learning issues came to

the software. Maximum software was traditional learning systems like Secondary English,

Computer Troubleshooting, and Kids Tutorial etc. In last few years E – Learning software



like motor driving, physical exercise, healthcare, Geography, physics etc. developed (Raihan

and Shahriyar, 2007)

According to A2I Mobile medication can revolutionize healthcare by close monitoring, data

collecting and awareness building.(Chowdhury, 2014)

Muhamm ad Saiyedul Muttaqin(Roll 11)

Abstract

This paper explores resources from five different sources that are pertinent to understanding

the holistic view of the local industry and the segment of the industry that caters to the

healthcare and education sector. According to Rishi Dave(1995) the competitive advantage

of the Indian software industry comes mainly from their cheap labour and the skilled human

resources. While the Bangladesh software companies enjoy these advantages as well as

existence of an experienced local software market and availability of a wide range of

hardware platforms (Choudhury,1997). Industries in both the country are based around

these core competitive advantages which are to an extent similar.

Literature Review

The Indian software industry is our regional competitor and it is currently a $560 million

industry, it has experienced compound annual growth rates of over 40-50% (Dave,1995) .

Compared to such figures the The average yearly growth rate of the Bangladesh industries

has been over 40 per cent for recent five years according to a journal by Bangladesh

Promotion Council. The article also states the size of the industry is $300 million in

Bangladesh. In terms of export destinations, North America (mainly USA) dominates while

UK, Denmark and Netherlands have emerged as major destinations in recent years. Besides

regular exports to Australia and Japan, a number of IT companies have also achieved

considerable success in mobile related applications and communications in Malaysia,Singapore, UAE, Saudi Arabia and South Africa. The IT sector of Bangladesh is expected to

reach a target of $1 billion within the next few years (Ahmed,2015).

The health sector of the country is yet to reach its full potential. In fact, Bangladesh is one of

the ten countries with lowest heath expenditure. However, reform policies coupled with

innovation and investment by the private sector may translate into rapid rise of this sector

(Choudhury ,Tabassum, 2015).

Under digital Bangladesh (DB) the plan is to have clinics throughout the country that will be

linked through the computer-aided connectivity. Major hospitals will have their websiteslinked with the websites of the DG, Health Directorate.



What the digitisation can do is to seek, receive, analyse the medical reports and transmit

back prescriptions/instructions, monitor the performances at the rural clinics electronically.

In other words, decisions can be implemented very quickly. This will ease out management

problems. Because the entire information and data set will flow back and forth electronically

they will be relatively more transparent and in turn the probability of indulgence in corruption

will decrease. Beside, by 2021, the DB will hopefully introduce video conference systems

between doctors in major clinics (Siddiqi, 2015)

The universities of Bangladesh are already partly digitised. DB visualises that by 2021 all

universities, colleges, high schools, primary schools, and madrasahs will have computerised

connectivity. ICT is intended to be used as teaching-learning aids. After five years of

schooling all students should have regular access to computers with internet facilities. The

goal is to improve the quality of education. The use of automated library is spreading slowly

in most universities, although they have to go a long way to be digital in the real sense. By

2021 the entire education sector should be digitised with third generation wireless

technology. (Siddiqi, 2015)

Reference

Ahmed, J. U. (2015, March 08). Software industry: Bright future.

Ahmed, sarkar, rahman, & haque. (2013). TOWARDS DIGITAL BANGLADESH: Bridging the

wired and unwired of healthcare sector. European Journal of Business and Social Sciences ,148-157.

Business Promotion Council, Software industry. (2012, February 13). Retrieved November 5,

2015, from Business promotion council website:

http://bpc.org.bd/ibpc_software_industry.php

Dave, R. (1995). Patterns of Success in the Indian Software Industry. 49.

Siddiqi, H. (2015, March 15). Managing Digital Bangladesh 2021. Daily Star .




Software in Public Service Delivery IndustryRuby at Tasfia Rahm an (Roll 29)

According to a monthly newsletter of Basis, the importance of IT and ITES has been given

top priority in Bangladesh by the policy makers by declaring it a thrust sector. The Prime

Minister of the country is the Chairperson of the Task Force. A lot of other incentives are

also declared by the Government for the development of the industry. And ICT policy which

in most of its content is very pragmatic is already in effect. However, there has been much

speculation about the position of IT in our country today. Quite often than not the answer

inclines towards negative. Again in almost one hundred percent of the cases in question thenegativity is derived from the figures in the export performance in the sector. (BASIS, 2005)

In a research paper by Rafiq Dossani, it is pointed out that India‟s software exp orting

industry is one of the world‟s successful information technology industries. The paper

explained the evolution of India‟s software industry from its origins in 1974 to the present

time. Domestic entrepreneurship drove the industry‟s origination, sur vival and innovation

during a time when the state used policy to promote SOEs and to crowd out the private

sector. The state‟s policies effectively prevented the private development of software inIndia. The private sector, in collaboration with TNCs, found an innovative solution, that of

exporting programmers instead. However, this strategy caused certain weaknesses such as

the shortage of domain skills and project management skills to become embedded

(Dossani).

In a background study by Hasanuzzaman Zaman and Rokonuzzaman, it is revealed that

during the 6th Five Year Plan (6FYP), Bangladesh has made important strides in utilizing

technology to bring in tangible transformation in all four areas - digital government, ICT inbusiness, connecting citizen and human resource development. Progress made in bringing

government services to the doorsteps of citizen is probably the area where Bangladesh

registered most significant progress. Vertical (with government ministries and agencies) and

horizontal (i.e., with citizens) policy advocacy and development interventions have resulted

in a number of citizen-centric e-initiatives and services such as multimedia classroom and

teacher-led education content development in public schools, mobile phone based health

service from Upazila Health Complex, agricultural and other livelihood information and

services (e-Tathyakosh) online through grassroots outlets. (Zaman & Rokonuzzaman)



In line with Government‟s Vision 2021, Access to Information (A2I) project has been playing

a c ritical role in revolutionizing public service delivery in Bangladesh. A2I‟s Horizon Scan

Report (2007) indicated insufficient understanding and low confidence among the

government officials regarding ICT usage and managing ICT projects as the major

obstacles, along with a lack of innovative thinking and partnership with private sector, in

bringing services to citizens‟ doorsteps. To address these issues, A2I supported all

Secretaries (or equivalent officers) of the Government in identifying 53 Quick Win (small-

scale easily achievable ICT-enabled initiatives focused on service delivery rather than

internal automation) initiatives in 2008. (Innovation Fund by a2i, 2013)

In a report by IT for Change Bengaluru, the following guiding principles for public software

have been highlighted:-

- software ownership and sharing (nature of social contract)

- ensuring highest public interest and realization of citizen's right (purpose)

- core technology issues (methods)

- software development process

- education

- other issues

- role of specialist agencies (structure) (Software Principles for the Public Sector with

focus on Public Education, 2010)

Reference

Ahraf Zahir, M. K. (2015). Market Insight: IT Industry in Bangladesh. Dhaka: LightCastle

Partners.

Chowdhuri, A. (2014). Is Digital Bangladesh about Improving Healthcare? Dhaka: A2I.

Haque, S. (2005). Adoption and up gradation of CMMI : prospect of software industry of

Bangladesh. Dhaka: Brac University.

MD. ARIFUL HOQUE RAIHAN, S. S. (2007). E - Learning Software in the Context of

Bangladesh: Proposal for an Interactive Model according to Bloom’s Taxonomy. 2007: Brac.

Tjia, P. (2003). The Software Industry in Bangladesh and its Links to The Netherlands.

Amsterdam: GPI Consultancy.



Tashfia Rawnak A nik a (Roll 09)

In the paper „Is Digital Bangladesh About Improving Healthcare‟, it is pointed out that ICT

can be leveraged into a pro-poor tool for poverty alleviation, establishing good governance,

ensuring social equity, etc (Access to Information Prime Minister's Office, 2009). In case of

healthcare delivery, innovative solutions for greater health service coverage can be achieved

through e-services like telemedicine. However, data standardization and information

integration, has become a big issue in public service delivery.

The most notable move by the government in delivering public service, is the Access to

Information Programme (a2i) in the Prime Minister‟s Office which is an UNDP and USAID

supported project ). The project started in 2008 with the objective to build a digital nation

through delivering services at the citizen‟s doorsteps (Access to Information Programme,

2015). The programme seeks to improve quality, widen access, and decentralize delivery of

public services to ensure responsiveness and transparency. The programme had launched

53 Quick Win in secretaries which was a way to trigger small scale easily achievable ICT

enabled initiatives focused on service delivery rather than automation. The Innovation Fund,

another project undertaken by the a2i programme, aims to promote homegrown initiatives

with localized solutions to reach the slogan „services at citizen‟s doorsteps‟. The fund is

utilized by government officials, development practitioners, private sector professionals,

university students and citizens coming forward with innovative ideas. Already, 115 million

services provided to citizens and has created Tk. 1.38 billion earning for entrepreneurs

(Access to Information Programme, 2015). Also, 50 most frequently used government forms

have been made accessible online.

Recently, the Finance Minister of Bangladesh in Third South Asian Regional Public

Procurement Conference, said that the Procurement Act will be amended soon to ensure

greater transparency, efficiency and accountability (FE Report, 2015). There will be fullintroduction of e-payment and e-procurement in public procurement. It is believed the

government procures billions of Takas worth of goods, and without any right accountability,

the process undergoes several draft allegations.

According to Tija (2003), organizations such as KLM, Phillips and Baan in the Netherlands

have been collaborating with IT suppliers in developing countries. Foreign countries find

Bangladesh‟s software industry lucrative for the low labou r costs, high programmer

productivity and widespread knowledge of English (Tija, 2003). Also, there are thousands ofIT graduates in Bangladesh every year, thus providing a pool of skilled workforce for the



industry. International collaborations include temporary contract based works, joint ventures,

subsidiaries of foreign companies, etc.

References

Access to Information Prime Minister's Office. (2009). Digital Bangladesh Concept Note. Dhaka.

Access to Information Programme. (2015). Access to Information Programme . Retrieved

from http://www.a2i.pmo.gov.bd/content/innovation-fund-a2i

Chowdhury, A. (2014). Is Digital Bangladesh About Improving Healthcare? Access to

Information Programme Prime Minister's Office. Dhaka: World Health Organization.

FE Report. (2015, Novermber). Procurement Act Amendment Soon. The Financial Express .

Tija, P. (2003). The Software Industry in Bangladesh and its Links to Netherlands. GPI

Consultancy.




Software in Mobile Application Industry of Bangladesh

Hasan Shahr iar Sifat (Roll 10)

ICT industry in Bangladesh is relatively new in comparison to other business sectors.

However, the unlimited potential of the ICT sector has commended inquisitive interests from

all concerned. The impact of global hype of the ICT sector is clearly visible in Bangladesh as

well. In the recent years, the local ICT sector has grown enviably.

The software segment is relatively new in the market; however, the segment is showinghealthy growth in terms of export earnings. According to Bangladesh Bank sources, export

earnings from Software and ITES was USD 27.01 million in 2005-06, registering a growth of

113 per cent from the previous year. The software companies in Bangladesh mainly focus

on servicing the IT/ITES needs of the local leading sectors like Garments, Banks and

Government. At the same time, leveraging the global nature of the IT business, the local

entrepreneurs are always looking for international opportunities. Thanks to these efforts,

Bangladesh now has become one of the most potential outsourcing destinations in the

world.

Bangladesh enjoys a clear competitive advantage in its IT labour force. The leading

universities in the country provide world class IT courses. Each year, various institutions

produce about 2,000 IT graduates. In addition to that, a huge number of non-IT graduates

are working in the sector as well.

Bangladesh has been building its infrastructure support for the IT industry over the years.

This year, the country ensured global connectivity by connecting to the „Information Super

Highway‟ through SEA -MEA-WE 4 consortium. High-speed Internet connectivity through

fiber optics cables costs about USD 2.67/per month for 1 kbps connection. The existing

VSAT backbone will continue to remain the major Internet infrastructure until the new

Backbone (Submarine Cable Connectivity) operates 100 per cent. There are as many as

150 ISPs in the country and the competition among Internet service providers has resulted in

significant improvement in their services. Most of the ISPs are now providing 24/7 on-site

technical support.

In recent times, Bangladesh has become one of the prominent outsourcing destinations in

the world. Danish companies could easily venture into this readily available opportunity. The



telecom boost in the country presents another opportunity for the IT companies as support

service to the telecom companies. The major focus of the telecom opportunities lie in the

form of mobile content development and value added service solutions. The government is

yet another big opportunity that is worth pursuing. To act on its declaration of ICT as „thrust

sector‟, the government is seriously taking initiatives towards public Executive Summary 6 IT

projects. The focus of these projects is in the form of e-governance and office automation.

Indian Software Industry

The Indian software industry consists of a large and growing number of firms: Using

NASSCOM membership as a measure, the number of Indian software firms has grown from

around 430 in 1996-97 to over 620 in 1997-98. Many of these firms entered the industry

during or just before the economic liberalization in 1991. The early entrants into the industry,

had close links with computer hardware development. Heeks (1996, p. 69) notes that Tata

Consultancy Services, (TCS) was the first firm to agree to export software in return for being

able to import hardware, in 1974. TCS, currently the largest Indian software firm, employs

around 9000 people. Entry barriers were low because firms could start small, since initial

investments required were fairly small, little more than office space and communication

facilities. With the growing need for maintenance services many firms began by providing

these services, often by sending software programmers to the client on a temporary basis.

The entrants were of two types. The first type were existing firms diversifying into software.

These included computer hardware firms, such as HCL and Wipro. There were others such

as BFL, and Satyam that were, before their metamorphosis as software firms, divisions of

large and medium industrial groups. The other type of entrants was new start-ups, such as

PCS, Infosys and Silverline.

The Indian software sector displays many unusual features from an Indian perspective. The

most obvious one is its export orientation, accounting for 65% of the total software revenue.

There are important qualitative differences between the export market and the domestic

markets. The first relates to different types of software developed. Table 4, gives thecomposition of the domestic and export software development and services market. The

domestic market has a higher proportion of revenues from the sale of software packages

and products. Whereas products accounted for nearly 40% of the domestic market5 , they

account for a little under 10% of exports. Over 80% of exports are software services

including custom software development, consultancy and professional services. The second

difference between the domestic and export sectors relates to the stages of software

development as described earlier. Indian firms usually provide low-level design, coding and

some types of testing services for export. For domestic clients the industry provides a widerrange of services that usually spans the entire lifecycle of software development. Some of



the domestic projects are much larger and more challenging than export projects, with the

screen based trading system for the Bombay Stock Exchange and the Reservation System

for Railways, both by executed by CMC, an experienced public sector firm, being two recent

examples.

References

DataSoft Systems Bangladesh Limited (www.datasoft-bd.com )

Ahmed, J. U. (2015, March 08). Software industry: Bright future.

A Report on the Indian Budget 2000-2014 http://www.ieo.org/budget99/table_1_2a.html

www.btrc.org.bd

www.springboardresearch.com

Anik Mun tasir Chowdhu ry (Roll 49)

The Bangladeshi IT industry has many of the right ingredients for success, however,

according to the industry stakeholders, some existing/perceived threats for the industry

remain. At individual company level, the business vision (or lack of it) of the local IT

entrepreneurs is the biggest threat. Groups of companies have many times started in IT as a

chance venture. This naturally, in most cases, did not succeed. On the other hand, the lack

of finance for the „real‟ IT entrepreneurs has limited them from reaching their true potenti al.

The country‟s IT policy is favorable, yet, Bangladesh faces a big threat of „resource crunch‟

in the near future. Brain drain and attractiveness of other business sectors are reducing the

number of professionals pursuing an IT career.

In recent times, Bangladesh has become one of the prominent outsourcing destinations in

the world. Danish companies could easily venture into this readily available opportunity. The

telecom boost in the country presents another opportunity for the IT companies as support

service to the telecom companies. The major focus of the telecom opportunities lie in the

form of mobile content development and value added service solutions. The government is

yet another big opportunity that is worth pursuing. To act on its declaration of ICT as „thrust

sector‟, the government is seriously taking initiatives towards public Executive Summary 6 IT

projects. The focus of these projects is in the form of e-governance and office automation.

The SME sector in Bangladesh has the potential to become a lucrative market niche for the

Danish companies. According to a survey report (by BASIS- KATALYST), the „latent IT/ITES

demand‟ of the specific SME segments is about USD 17.94 million. The report also

http://www.datasoft-bd.com/






suggested that demand is gradually growing along with the increase in the awareness level

of the SME entrepreneurs.

The specific success factors that Danish companies could leverage when entering the

Bangladesh ICT industry are:

• Business Vision (taking IT as core business)

• Management Practices (pro ven effective management practices and business acumen)

• Business linkages (links with prospective clients in Nordic/EU regions)

• Regional knowledge (knowledge of the business practices of the regions from where many

outsourcing projects placed)

• Danish Government‟s presence (support for relationships between Danish and

Bangladeshi companies)

Export of software (India)

Software exports can be divided into three categories based on where software is developed

and how the development is managed and organized. The first category is onsite

consultancy or onsite projects, where the Indian company provides the US client with

software professionals with the particular technical skills asked for by the client. These skills

could vary from mainframe related software to specialist expertise in UNIX and WinNT

platforms with JAVA programming skills. 11 The second category of exports has a mix of

work done offshore (i.e., in India) as well as onsite. In this model, the Indian company sends

a few software professionals to the client‟s site for requirement analysis or training in a

particular system. These professionals then bring back to India the specifications for the

software and have a larger team develop the software offshore. If the project is large, a

couple of Indian professionals remain at the customers site acting as liaisons between the

project leaders offshore and the clients. To execute such projects, a firm needs not only

skilled professionals, but also a software development process and methodology, and an

ability to manage software development. Unlike in onsite projects, the Indian firm provides

technical and managerial expertise as well. The third method of software export is in theform of an Offshore Development Center (ODC/OSDC). An Offshore Development Center12

is a popular organization form especially for firms based in the U.S and Europe and who

wish to take advantage of the skilled talent pool and lower wages in India. An offshore

development center involves an umbrella contract with a long-term agreement on prices for

time and materials (usually standardized on a man-hour basis). In this method of

outsourcing, a large fraction of the project is executed offshore and the Indian firm is

responsible for adherence to schedules for delivery.



References

National Association of Software and Service Companies (NASSCOM)-2013, An Overview

of the Indian Software Industry

Schware, Robert, 2012, Software Industry Entry Strategies For Developing Countries: A

“Walking on Two Legs” Proposition, World Development , Vol. 20, No. 2. pp. 143-164.

Whang, Seungjin, 1992, Contracting for Software Development, Management Science, Vol.

38, No 3, March, 307-324.

Documents

Group 4 a Literature Review