Since the last one and half decade an extensive development in the IT sector has taken place, which increased the speed of data transfer over the internet and other networks, hence opened new avenues of business; one of those businesses is called as Information Technology Enabled Services (ITES). The other name for this industry is Business Process Outsourcing (BPO). The advent of the Internet and the advancements in telecom has enabled organizations, referred to as client companies, to outsource their Information Technology (IT) as well as non-core human intensive functions to specialized companies which can do the work more efficiently and thus less expensively. The entire spectrum of products and services being outsourced is referred to as Information Technology Professional Services (ITPS), which can be categorized into Computer Hardware, IT Services and Software and IT enabled services (ITES). ITES is commonly referred to as BPO (Business Process Outsourcing) and the terms ITES, ITES-BPO and BPO refer to the same thing and are used interchangeably. However, in the context of this study ITPS does not include computer hardware. Another term also in common use is Managed Services, which includes the entire spectrum of ITPS except hardware and software products.
The terms ITPS and Managed Services are also used interchangeably in studies / reports on the outsourcing domain. The specialized companies, referred to as ITPS vendors, provide their services to multiple client companies at lower prices than the in-house cost,
which is made possible by their vertical expertise in the area of work as well as the economies of scale. Transfer of this work, to "foreign" or "offshore" locations by the client companies and/or by their ITPS vendors, either through a captive facility or by outsourcing to a local ITPS vendor, to take advantage of lower labor and occupancy rates in those countries, is commonly referred to as offshoring or offshore outsourcing.
ITPS has immense potential to become a major source of foreign exchange and employment generation for countries having low labor and occupancy costs on one hand and developed IT capability and infrastructure on the other hand. Employment is created in the outsourcing destination country for approximately 100 people for each US $ 1 million in revenue. In addition, benefits accrue to downstream sectors. Conversely, a trained pool of merely 100,000 people with exportable skills, which is just 5 times the workforce of a major public sector organization like PIA and Pakistan Steel Mills, can generate foreign exchange revenue of US $ 1 billion. Moreover, the rapid growth of ITES-BPO and the IT industry as a whole is having a significant impact on the socio-economic dynamic of such countries. IT sector is now amongst the largest employment creator in the emerging economies, with the number of jobs added almost doubling each year. It has also made a major contribution to the rising class of young consumers with high disposable income.
Despite of the fact that there is a lot of potential in this industry, when we compare it with the same industry in our neighboring countries, or the countries similar to ours, it seems
that this industry could not grow much in our country, as compared to the other third world countries. Though Pakistan software export board has conducted some of the researches and surveys to look into the reasons and try to make some recommendations for this industry to increase its growth rate, there is a lot of fact finding and research work needs to be done in this regard.
As an MBA-MIS student and as a General Manager of an ITES company, named Medlink Services Pakistan, I chose to do research on this topic to not only complete my research project; but also to give benefit to my company as well as to other similar kind of companies by providing them with the facts and figures of the industry as well as various analytical statistics for their future reference and growth.
