Potential Benefits and Pitfalls of IT Outsourcing from the Viewpoint of Developed Countries: Opportunities and Challenges for Bangladesh

Abstract

Outsourcing generally refers to the practice of farming out jobs from the home base to other countries, largely in an effort to cut costs. Software developers are among an increasing number of companies turning to outsourcing as a strategy to improve cost control, product quality, product development schedule reduction, and focus on core business activities. As IT outsourcing becomes ever more ubiquitous across the globe, corporations are taking a closer look at the scope, quality, and nature of their outsourcing agreements. By 2015, analysts predict that more than 3 million white-collar jobs in the U.S. will be farmed out to other countries, up from about 300,000 today. If that shift is inevitable, the next question becomes which countries offer the best choice. Here, in this paper some guidelines have been provided to get the answer. Several years ago, software was identified by the government of Bangladesh as having important export potential and the IT industry was declared as a thrust sector. Human resources for the IT industry have also been growing rapidly. Considering all the factors involved, this paper concludes that Bangladesh could become one of the most competitive IT outsource centers for the entire first world. This paper also discusses the opportunities and challenges for Bangladesh in becoming a successful IT outsourcing country.