Sri Lanka’s fast-growing information communications technology (ICT) industry faces difficulties in hiring skilled staff, finding good office space and accessing fast Internet links, a survey has found.

Although the IT export industry will continue to grow fast, the industry is confronted with various concerns that could become a hindrance to its future progress, according to a new survey by PricewaterhouseCoopers.

A key concern if inability to access “quality” office space with parking facilities at a reasonable cost, said the survey commissioned by the Export Development Board which wants to make IT a top export sector.

“Lack of skilled staff, particularly with high-end technical skills and English language skills remains critical,” it said.

ICT and BPO (business process outsourcing) companies still faced high costs associated with communication as well as poor service quality of high-speed Internet facilities, the report said.

The sector also faced threats from rival IT export nations.

“Access to markets remains a significant concern with the client base opting for cheaper markets followed by lack of opportunities for small companies,” the report said.

“Poor country visibility as an IT destination, absence of up-to-date technology, and time consuming procedures to obtain services from institution such as the department of Inland Revenue and Sri Lanka Customers further act as barriers to the industry,” it said.

“In addition, global competition from IT giants such as India as well as emerging market such as Eastern Europe and South America remain a hindrance to the future growth of the industry.”

Source:http://www.lankabusinessonline.com/fullstory.php?nid=1168469808

Sri Lanka’s information communications technology (ICT) industry is focusing more on value added software products and knowledge services where profits are higher, officials said.

Over half the firms in the sector are building and exporting software products rather than providing services such as low-end call centres, they said.
The services sector is also dominated by knowledge services such as financial, medical and legal which offer high-end value addition, according to a new survey by PricewaterhouseCoopers.

“We’ve seen very good growth in software exports rather than software-enabled services, also known as ITES (information technology enabled services), which has seen little growth,” said Janaka Ratnayake, chairman of the Export Development Board.

“ICT export growth is remarkable – that is the future of our exports.”

Mano Sekaram, chairman of the EDB’s advisory committee for the ICT and BPO sectors, said in Sri Lanka over half the companies in the sector were building software products, unlike in India where 80 percent provided software services.

“It means they have high value of returns. So we’re moving into value addition.”

Although ITES exports growth has been lower, Sekaram, who is also general secretary of the industry body, SLASSCOM, Sri Lanka Association of Software and Services Companies, said it has potential as it is dominated by knowledge services.
These include financial, accounting, and legal services.

“We’re really moving into knowledge services such as medical transcriptions, high-end analytical and architectural services.

“Industry earnings can even surpass one billion dollars if we take all the knowledge services which have not been captured in the survey. Lawyers and architectural firms are providing services internationally,” Sekaram said.

“In Sri Lanka in the next 10 years knowledge services will lead as we have a highly educated population.”

He also said 78 percent of Sri Lankan software companies are quality certified.

“Not many Asian countries can claim to have that much quality certified firms.”

Sekaram said any recession in the West would have an impact on the country but that ICT export growth would still remain strong.

“You must understand that the world is moving towards knowledge services. That’s the only way for companies to become competitive – by accessing knowledge services and through partnerships. So consumption of IT services is increasing.”

Source:http://www.lankabusinessonline.com/fullstory.php?nid=360858317

The Sri Lankan Government has announced comprehensive support to aggressively grow the IT industry, by providing highly favorable investment opportunities for Australian companies. Already booming at a brisk 23% p.a., not even the GFC could slow down the local Sri Lankan IT/ICT industry, with foreign investment attracted to the combination of “South Asian affordability – Western quality standards.”

International Financial and Banking analysts agree that Sri Lankan technology firms are primed for significant investment growth. HSBC has raised their credit rating to BB-/Stable, A.T. Kearney’s Global Services Location index places Sri Lanka into their top 25 destinations, and the Royal Bank of Scotland has applauded policy making which keeps inflation in check.

Overall the economy grew by 8%, with inflation being minimized by the central bank, allowing the reverse rate to remain at just 7.5%. Corporate tax rates are being lowered from 35% to 28%. In this favorable economic environment, companies such as Microsoft, Motorola, SAS, Nokia and The Body Shop have created significant ties with the country, including investment, and the purchase of major services (IT Outsourcing and Business Process Outsourcing.)

The Government is allowing Total Foreign Ownership, with no restrictions on repatriation earnings, and the rights of foreign investment is guaranteed by the constitution. Coupled with an advanced educational program, the Sri Lankan workforce is highly educated, English literate and renowned for a strong work ethic.

David Lester, Director of the London Stock Exchange (Information Services) was one of the early entrants. “Partnering with a Sri Lankan based company has been refreshingly straightforward. Our presence in Colombo provides us with an important footprint in Asia.”

“The Government has seen how resilient our IT/ICT companies are, and how attractive their services have become to US Fortune 500, Canadian and UK companies. That’s why we have set course for the IT/ICT industry to generate US $1Billion in export revenue to employ more than 100,000 people within 5 years, and ensure that the ITO/BPO industry becomes a top revenue earner within 10 years. We are excited to extend a warm invitation to Australian companies to realize the significant opportunities that exist here, including generous tax holidays,” says Reshan Dewapura, CEO of The Information Communication Technology Agency of Sri Lanka.

The industry has created international confidence, given that it has thrived in the face of extraordinary conditions, not least of which the New Year Tsunami. “Our local business leaders have done very well, to build robust and internationally competitive businesses,” say Fayaz Hudah, Program Head at ICTA.

A Government sponsored delegation of leading Sri Lankan IT/ICT companies will be attending CeBIT in Sydney, and visiting Melbourne to meet with investors and local IT/ICT companies. They will be available to answer questions for the Australian investment and analyst community at these times:

Source:http://www.newsmaker.com.au/news/8940