Author: Paula Jones FCMA

Over the last decade, there has been a marked increase in UK businesses outsourcing their non-core functions to achieve greater cost efficiencies and access to additional resource and technology. The impact that outsourcing has had on countries like India has led other countries to start to look at how they can tap into the economic benefits this industry can bring.

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For more information on outsourcing for SMEs, contact: Outspan. www.outspan.co.uk, 0845 838 1965

Sri Lanka’s outsourcing industry has stepped onto the global stage in recent years, particularly in the finance and accounting sector. To support this, the Government has focussed on developing the outsourcing business through offering various incentives, including tax breaks, subsidized telecommunications and streamlined procedures for setting up new businesses.

There are a number of reasons why Sri Lanka is in a strong position to compete in the finance and accounting outsourcing sector:

1. Good language skills

Sri Lanka’s British colonial history leaves it in a good position both culturally and from a language point of view to understand and work with British businesses. English is the business language and widely spoken throughout the country.

2. Strong work ethic and quality

Sri Lankan’s have gained a reputation for good work ethics and delivering work to high standards. As a result of this reputation many European companies have move their research and development centres to Sri Lanka.

3. Sri Lanka has the highest proportion of qualified accountants in South Asia

The ratio of qualified accountants to the general population is much higher than any of the country’s neighbours. In addition, Sri Lanka has the largest pool of CIMA (Chartered Institute of Management Accountants) outside of the UK, and a growing pool of ACCA (Association of Chartered Certified Accountants).

4. Good standards of education and a growing skilled workforce

With a population of 21m, Sri Lanka has a literacy rate of over 90% with most children staying in the school system for 12-13 years. The government provides free education from primary school through to university, and a solid maths background within the education system lends the country well to accountancy and IT software development, etc.

Sri Lanka’s workforce is approx. 8m and is experiencing a growth rate of 1% a year. Combine this with the education levels and Sri Lanka is set to be a strong contender in the outsourcing industry for years to come.

5. Low cost base

On average salaries for professionals are more than 65% lower than in the UK. Businesses can employ on average 3 Sri Lankan accountants for every 1 UK accountant.

6. Solid experience within the outsourcing industry

With approx 50,000 people currently working in the outsourcing industry (IT, software development, accounting), Sri Lanka is already experienced in working with UK businesses. The outsourcing workforce is also set to grow by 20% each year.

7. Good technological infrastructure

Sri Lanka has one of the most liberal telecoms industries in South Asia. Stable communication, particularly internet broadband access along with access to other cutting edge technologies allows Sri Lankan businesses to easily interact and work with international businesses.

8. Government incentives

The Sri Lankan government is currently tapping into the skilled resource base it has to help develop their economy. They expect outsourcing revenue to reach USD$1bn (£650m) by 2015.

With increased political stability resulting from the end of the civil war, good infrastructure and accessibility, and the pursuit of economic liberalization policy by successive governments, the $1bn target could quite easily be exceeded in the coming years.

Outspan, a leading outsourcing provider in the UK, has been operating through service centres in Sri Lanka since 2007 (prior to that they were in India). Jim Downey FCMA, Outspan’s Managing Director says “owing to the strong work ethic, high standards and good productivity, we feel that Sri Lanka offers appeal to companies who want to take advantage of low cost skilled services while not compromising quality standards”.

Sri Lanka as a country can never compete with countries such as India and the Philipines when it comes to numbers, so Sri Lanka is mainly focusing on outsourcing activities based on high skills, such as accountancy. With plenty of people with UK accounting qualifications such as CIMA and ACCA financial accounting is an area where Sri Lanka can meet the demand of the global market.

Contact Outspan today to discover how we can start reducing your costs now at www.outspan.co.uk, 0845 838 1965

Sources:
*Sri Lankan demographics profile 2011
New York Times: Sri Lankan Accountants Lure Global Outsourcers
European Information Technology eXchange

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