I’ve been asked a number of times recently why we took the decision to set up outsourcing operations in Sri Lanka – the assumption being that India is the global leader in outsourcing and the logical choice for any business going offshore. The answer I always give is simple “it’s the people”.

It is true that the Indian outsourcing market has experienced phenomenal growth over the past few years and continues to dominate the global business process outsourcing (BPO) market, with market revenues estimated to be in excess of $14 billion in 2010 (according to NASSCOM). The outsourcing hotspots of Bangalore (Bengaluru), Gurgaon and Mumbai have been particularly successful at drawing in big-name multinational organisations and creating mega-processing centres that are almost towns in their own right. But these hotspots have, to some extent, also become victims of their own success – they often suffer from high staff turnover (due to extensive ‘poaching’ from competitor businesses), high wage inflation and a reputation for sometimes focusing on on volume over quality. Outside of these cities (in the so-called ‘Tier 2’ and ‘Tier 3’ cities), it can be hard to find the quality of resources needed for successful outsourcing operations or the people with the right commercial mindset, leading to frustrations in the outsourcing relationship.

Sri Lanka, on the other hand, has taken a different path in its outsourcing journey. Recognising that it cannot compete with India on volume (due to the relative difference in scale of their employment market), they have gone for a higher-end, more quality focus, which suits small-to-medium, sized businesses better. They have the largest pool of CIMA qualified accountants outside of the UK, and a large pool of ACCA and AAT qualifieds and part-qualifieds too. Their literacy rate is the highest in South Asia at over 91%. And, being a smaller country, they often adopt a more external facing, commercial outlook than some of their northern neighbours on the other side of the Palk Strait.

Added to this, new business parks with state-of-the art infrastructure, a government that is strongly supportive of the outsourcing industry, new political stability and a people that are warm, welcoming and open to outsiders, Sri Lanka is well placed to make a big impact on the global outsourcing stage in future.