BizTech

IT industry expected to see remarkable growth

Sanjeevi Jayasuriya

The IT Industry is expected to see a rapid boost with over 10 percent compounded growth at present.

The IT industry will acquire the biggest growth in the country. The software and hardware markets comprise the majority of the IT industry which is based on hardware, software and IT enabled services. The country’s effective IT initiatives will further facilitate the growth, Greenwich Lanka (Pvt) Limited Chairman Sarath Wickramanayake told the Daily News Business.

Greenwich, is a fully owned subsidiary of PCH Group. The PC House is the only listed fully fledged IT company in the country. The PCH Group has the biggest market share of 25 percent in hardware. The software industry has two components of third party software and software development. The third party software industry is also significant and PCH Group is active in selling third party software, he said.

We are at the initial stage with regard to software development. However, we intend to invest concsiderably on this in future. The IT enabled services are mainly human based and capital incentive.

The company plays a major role in providing these services, he said.

Another aspect of ITC is BPO and KPO industries. The Procifinity Limited is the BPO arm of PCH Group. It is a BOI approved company and was set up in March 2011.

As Sri Lanka’s IT penetration is only 5 percent there is huge growth potential. The Government is taking numerous measures to make IT the future. It is necessary and important to build capacity with regard to human resources and facilities. A developed IT industry could play a major role in the country’s socio-economic development, he said.

“Our main focus is to expand the current network. We opened five branches in the North last year and two at Hambantota and Galle recently. We are planning for a rapid expansion. The Colombo outlets will be upgraded to ensure wider reach of customers,” he said.

The focus will be on developing the network and accessing to more customers.

The company will also provide training and award them certificates while recruiting right personnel. There will be intensive HR development going on within the company.

The IT industry is price competitive, but the current trend is prices are going down.

The industry finds that margins are becoming less. The PCH Group has the advantage of large supplier base and long term relationships. The company is forging ahead with better supply chain management and stringent control measures to ensure long-term business competitiveness.

There is scope to improve IT use in the SME sector.

The concept of green technology is taking place and the IT industry could make a major contributor toward eco-friendly country, Wickramanayake said.

EDB conducts ICT Export Value Survey

In the prevailing globalized business environment, the IT/BPO industry is emerging as one of the significant contributors to the Sri Lankan export market, an EDB media release said.

However, due to the volatile and changing nature of the industry, much of the export revenue that is generated has not been clearly highlighted and recognized.

To address this gap, the Sri Lanka Export Development Board (EDB) together with the IT/BPO industry, has now launched the second ICT Export Value Survey for 2010, to identify the current export value of the industry.

The EDB carried out the first ICT Export Value Survey for 2006/2007. The survey identified 178 IT/ITES export companies. It also identified the value of the IT/BPO exports to be US $ 173 million in 2006 which grew by 23 percent to US $ 213.2 million in 2007. The IT/BPO exports in 2007 depicted that its contribution as the fifth largest export earner for Sri Lanka.

This finding also gives weight to the industry’s increasing potential of ultimately being one of the topmost players in the Sri Lankan export market.

EDB Chairman and Chief Executive Janaka Ratnayake said “There is a need to continuously measure the growth of the IT/BPO industry and its contribution to the country’s economy as the government has recognized the industry to be one of the key players in the Sri Lanka economy.”

The survey will show how far the industry has moved towards achieving its export revenue target of US $ one billion by 2015. PricewaterhouseCoopers Sri Lanka, which carried out the initial survey in 2007, has been appointed to conduct the 2010 survey as well.

In addition to ascertaining the export value for the IT/BPO industry in 2010, the current survey will also capture the current status, developments and challenges in other operational areas of the industry.

These include the service offerings, workforce, infrastructure, communications, markets, quality certifications and stakeholder support. Further with the end of the war, it is expected that the IT/BPO industry would have appreciably changed and grown since the initial survey was conducted, and therefore the current survey is expected to capture and explore such changes.

The survey will commence in May 2011, with a selection of companies in the industry, being directly interviewed. The survey steering committee, formed by representatives of the EDB, the IT/BPO industry, the Information and Communication Technology Agency of Sri Lanka, Board of Investment and SLASSCOM, encourage the IT/BPO industry to provide their fullest support and cooperation for this survey. The survey results will be the basis for Government policy decisions in the future regarding the ICT industry.

Further, a summary report will be generated from the survey, on the ICT export industry in Sri Lanka, which can be used for global and regional comparisons and also as a baseline for planning industry strategy.