New BOI project for economic development in Information Technology sector

The IT/BPO industry in Sri Lanka is witnessing tremendous growth due to the expansion of the global BPO industry. This is further supplemented with the availability of a highly skilled talent pool at a competitive cost to cater to the needs of the industry. Domestic IT adoption is also increasing significantly, driven by the awareness created by the initiatives taken to build IT capacity and competence in rural areas of Sri Lanka. The growth of telecom penetration, increasing use of IT and strong focus on ICT education in schools has also encouraged this growth. The use of technology and outsourcing as a means to reduce cost will continue to drive the growth of IT/BPO sector in Sri Lanka.

The Board of Investment has identified the IT sector as a priority growth sector for economic development and provides many incentives to promote investments. The country is emerging as a favourite offshore outsourcing destination for specialised outsourced services and the combined IT and IT enabled services sector has grown remarkably. 

Sri Lanka boasts high levels of education with one of the highest literacy rates in South Asia. The growing IT enabled services industry in Sri Lanka offers a unique advantage for enterprises to enjoy premium access to a high quality talent pool, which is becoming increasingly challenging to large established destinations. Sri Lanka is comparatively cost competitive than these established outsourcing destinations. Given the declining telecommunication costs, the environment is also highly favourable for establishing high-in-demand niche competency centres.

Further the location of Sri Lanka in terms of time-differences allows it to cater to the European, Australian and the American markets. All these factors place Sri Lanka in a position to establish itself as one of the top outsourcing destinations.

Companies being established locally are interested in introducing high-end financial research, analysis and development work into ITES industry. Among the focused areas, the financial and accounting services sector has shown notable growth. Many global companies have chosen to set up their services in Sri Lanka in order to have access to a high skilled workforce at competitive operational costs. Other sectors being focused upon are telecommunications, banking financial services and insurance, investment research and engineering services.

The future for the IDC space in Sri Lanka looks quite promising. Due to the requirement of a high level of resources, maintaining data centres may be quite expensive and not viable for most of the business establishments. Outsourcing their IDC requirements would enable companies to adopt the latest technologies at an affordable price. 

The BOI’s strategy is therefore to bring in investments to develop the current IT/BPO sector by improving the existing infrastructure and expanding the outsourcing services. 

The Board of Investment of Sri Lanka therefore granted investment approval to Proficinity Limited to develop software and provide data hosting and IT enabled services. Mr. Jayamapathi Bandaranayake, Chairman / Director General signed the agreement on behalf of the BOI and formally presented the BOI Certificates of Registration to the investors. 

PC House Limited’s new subsidiary, Proficinity Limited is an initial investment of US $ 3 million providing employment to 250. The company intends to launch itself to cater to the outsourcing requirements of the local and foreign markets. Proficinity Limited is planning to move into Internet Data Centre (IDC) operations with the expectation of providing hosted and managed data services to corporate and public sectors. Proficinity intends to operate the outsourcing business as well as the IDC operations maintaining a high level of quality.  Special emphasis will be made with regard to customer orientation and maintenance of confidentiality of the information processed. 

PCH, having identified the potential for BPO services in Sri Lanka has already commenced its operations by providing data conversion and digitising services to some of the public sector institutions. PCH intends to invest in setting up a fully fledged 200 seat BPO operation in order to provide data entry services, data conversion services, book keeping and accounting services.

Proficinity Limited will initially position itself to serve the demand for outsourced services by domestic corporates and will enter the export BPO market subsequently. Maintaining an in-house data centre can be costly and thus it may be viable from a financial aspect to outsource to a dedicated centre where data security can be guaranteed. PCH aims to invest in a state-of-the-art IDC, to provide secure hosting and managed service.