IT SMEs finding it cheaper to do business in Sri Lanka
Can India take a cue from its neighbour Sri Lanka to promote small
and medium enterprises (SMEs) in the IT sector? The island nation is
weaving its charm on IT SMEs from India even as it has launched its
mission to touch $2 billion in software exports by 2012.
It is faster and cheaper to fly from Colombo to Chennai, than it is
to take a flight from Chennai to even Bangalore or Hyderabad, observes
Indian IT SME Association (representing over 3,200 such firms, based
mainly in the southern IT hubs) president Sankaran P Raghunathan.
IT companies like Millennium Technologies, Virtusa and IFS and a host
of BPO majors, HSBC Electronic Data Processing Centre, Amba Research and
WNS Global Services, are already operating out of Sri Lanka.
The Government has constituted a hilevel task force to address supply
side bottlenecks, while promotional agencies have been rolling out a red
carpet welcome to Indian IT SMEs.
Recently, a delegation headed by Board of Investment (BoI) of Sri
Lanka Executive Director Duminda Ariyasinghe came calling on Indias
three southern capitals, Chennai, Bangalore and Hyderabad.
The IT SME association facilitated the meet in these places, with the
Bangalore session chaired by Karnataka STPI Director R Rajalakshmi.
IT SMEs have enough and more reasons to consider the neighbouring
country as the cost of doing business works out cheaper in Sri Lanka
compared to Singapore or Malaysia. “We are not looking at competing with
India but see ourselves complementing it, especially for backup recovery
or business continuity operations.
Not only are the operational costs lower in our country, the
attrition rates at about 13% is less than half that of India. Cost of
labour is 30% lower than India,” Ariyasinghe told ET.
While competitive wages range from $100 - $1500 per month, other key
points of the workforce being its high productivity, creativity, proven
precision and manual dexterity skillsets.
Last year, its total IT/ITES workforce was 37,792, registering an
annual growth of over 30%. Indian SMEs have the difficulty in hiring
talent and getting space to meet their expansion. Whereas, Sri Lanka as
a destination offers a huge advantage for this segment. Home to many
start-ups, the entrepreneurial culture is quite strong there,
We have bounced back from a Tsunami. Taking cue, Indian companies are
mulling the option of expanding their businesses there. Among the early
movers are Chennai-based Blueshift and BPO firm Hellocorp.
The Economic Times