Information Technology Enabled Services in Sri Lanka

Why KPO?

If we look into any financial newspaper, magazine or any literature giving knowledge about the outsourcing business in Sri Lanka, what is found to be the most referred word is KPO meaning thereby knowledge process outsourcing. Many new business concerns are coming day by day in Knowledge Processing Outsourcing Industry and KPO is emerging as a new sector that promises to provide long-term jobs for intellectual, analytical and knowledgeable people with a pay scales much higher than the BPO sector. The following are the few areas which are being associated with the KPO sector.

• Research & Development 
• Financial Consultancy and Services

 Advanced Web Application

• Business and Technical Analysis 
• Learning Solutions 
• Animation & Design 
• Business & Market Research 
• Pharmaceuticals and Biotechnology 
• Medical Services 
• Writing & Content Development 
• Legal Services 
• Intellectual Property (IP) Research 
• Data Analytics 
• Network Management 
• Training & Consultancy

Now, why should some company invest time and money in knowledge process outsourcing? The basic fundamentals of outsourcing apply equally to knowledge based services as well. A shortage of skilled professionals and availability thereof at higher costs increase the cost of maintaining such services in the host country whereas the same job can be got done with similar precision and quality and at much lesser costs abroad. The major KPO benefits which can be derived are described below. 

Benefits of KPO

Standardized technical education is widely available to all in the developing countries especially in Sri Lanka. This skilled and trained manpower is accessible at very low cost as well. It, therefore, is always a wise decision and makes sense to utilize such services. Outsourcing of activities to KPO companies can provide the following benefits:

• Valuable cost savings that can be utilized elsewhere. 
• Trained professionals at work.
• Standard operational efficiency. 
• Increase in profits.
• Savings in time and management energy for maintaining in house services. 
• Option to recruit a larger work force without raising costs.

What KPO can deliver to you?

Any company involved as service provider in the KPO industry works in close coordination and association with the client and provides services that are predefined in terms of quality and standard of work. While working with a KPO firm, the outsourcing company can expect to get the following:

• Good quality work. 
• Lower costs. 
• On time delivery of services. 
• Uninterrupted services. 
• Adaptability to changes in required quality.

Does it imply that with the rise of KPO entities, BPO (Business Process Outsourcing) become extinct. It is undoubtable that KPO is a step ahead of BPO but this does not mean the end of BPO. The BPO Industry will exist and continue to be successful in Sri Lanka. BPO has its own strengths and way to solve a particular problem and the BPO market is long-term in nature as compared to the KPO market. With every passing day the BPO market expanding and so is the various systems and processes through it. 

Industry Overwiew 

Since the early 21st century Sri Lanka has gained a reputation as the ultimate destination for the provision of off-shore Information Technology (IT) Enabled Services including finance and accounting, legal, insurance, banking, and telecommunications. The growth experienced in the IT Enabled Services industry in the country offers a unique advantage for Small and Medium Enterprises (SMEs) to enjoy premium access to a high-quality talent pool, while providing a conducive platform for the establishment of high-in-demand niche competency centers for SMEs and even larger global services companies. Over the last few years, the industry has become a key growth driver within the service exports sector of the country. Furthermore, the positive domestic developments and gradual recovery of the global economic situation has created a conducive environment for growth of the industry’s workforce to over 85,000 people specializing in ICT related careers throughout the country. The sector boasts a workforce growth rate of over 20% year-on-year.

The continued growth in earnings from the sector over the last decade demonstrates the existing potential of this industry for investors. With a growth rate of 150% over the past five years, the sector is considered one of the highest growth areas in the economy. The export revenue of this sector grew four-fold from USD 244 million in 2007 to reach USD 926 million in 2017.

Sri Lanka exports software products and services to almost every continent in the globe and the country’s core competencies include automated application testing, infrastructure outsourcing, high-end R&D, Enterprise Resource Planning (ERP), Cloud Technology, Mobile Applications and many other technologically-driven Business Solutions. Sri Lanka also acts as a promising offshore development center for several fortune 500 companies from countries such as the USA, Ireland, the UK, and Sweden.

With the SEA ME WE 5 system, the latest upgrade to the fiber-optic cable in the SEA ME WE series capable of carrying 24 Tbsp., Sri Lanka has now been connected to its first 100 Gbps-plus submarine cable. With this global initiative, Sri Lanka, having multiple global connectivity options with a gigantic bandwidth capacity adequate to cater to the requirements for more than 25 years in the future, is placed in a position of strength and opportunity to attract investors for the IT Sector of the economy.

A result of these development is the target to achieve growth in the IT Enabled Services industry of Sri Lanka by 2022. To this end targets of generating a revenue of US$ 5 billion, increasing direct job opportunities by 200,000, and establishing 1,000 start-up IT companies have been set as attainable. The Board of Investment of Sri Lanka (BOI) is poised to offer our services to interested investors both local and foreign, to establish, set-up, create, and innovate business ideas and opportunities for investment in this sector of the country.


 Board of Investment of Sri Lanka,