When one thinks of software and technology offshore outsourcing, the usual locations that come to mind are India, Russia, Argentina, Mexico, Colombia, China, the Philippines, and a few others. While these are all great outsourcing offshore destinations, over-crowding is diminishing the value that businesses are able to realize. The problem is accentuated exponentially for businesses that do not have multi-million dollar budgets ($5 MM/year) to spend with the vendor. They end up working with lower tier vendors who remain limited in their ability to hire and retain top talent.
As a result of these challenges, a number of alternate offshore locations have been emerging and becoming success stories. One such location is Pakistan.
When we tell our prospects and clients about 10Pearls, they often ask us about our location in Karachi, Pakistan. Most ask because they are curious, or because they are unable to fathom how 10Pearls has been able to be successfully deliver leveraging Pakistan as a destination. It is not surprising given the oft inaccurate perceptions that popular media tends to create about Pakistan.
Almost all business leaders and entrepreneurs (buyers) are rational thinkers and when presented with facts, they recognize that not only the risk is relatively low, doing business in Pakistan has advantages. In other words, Pakistan is a favorable option to outsource relative to some of the choices available today.
When I was the Head of Global Outsourcing at AOL-Time Warner, I witnessed first-hand the attrition problems, rising prices, inflexibility and lack of overall quality improvement with outsourcing partners in typical outsourcing locations. Despite the pain, it was acceptable; mainly, because everyone else was outsourcing to those destinations. Certainly, the other companies could not be wrong.
Times are much different now. Businesses are focused on value, and realize that speed-to-market is of utmost importance. It is not about “where is your location?”, but rather “how can we count on you to deliver on time, within budget, and with the best quality”. We have businesses who are now actively approaching us to learn about our strengths in Pakistan and how we are able to sustainably and continuously deliver value to our customers.
Below are some facts why Pakistan is a great destination for technology and software outsourcing. The list may surprise you, but it is one of the reasons why 10Pearls has been able to build great client successes, building world class products for the world’s largest enterprises and exciting emerging businesses, including start-ups.
- Pakistan is the 6th largest most populace country in the world: 195 million.
- Pakistan is also the 3rd largest English speaking country in the world (past British colony).
- Nearly two-thirds of Pakistan’s population is comprised of youth aged below 24 years.
- Karachi is the 7th largest city in the world, and is home to 24 million inhabitants. There is a strong emphasis on technology education and training amongst the youth.
- Pakistan was recently rated much higher in terms of IP laws compared to others.
- Pakistan, like much of the sub-continent, has strong work ethic and high productivity. 81% of Pakistanis believe that hard work pays off. More importantly, Pakistan’s labor pool is not saturated compared to other locations, and as a consequence, has relatively far lower employee attrition.
- Contrary to popular beliefs, Pakistan is NOT on the ITAR control (export controlled or embargoed) list of countries.
- Pakistan is business friendly, with favorable business law, tax incentives for certain services and businesses. The currency is relatively weak and provides strong labor arbitrage opportunities. Pakistan is Asia’s best performing stock market.
- Pakistan has major global brands and successful companies operating for many years. There are a number of technology outsourcing services businesses working with global brands. These include: 10Pearls, Systems Limited, Folio3, NetSol, TRG Pakistan, Ovex Tech, LMKR, and many others. Investors, such as Rocket Internet, are aggressively investing in Pakistani companies.
- Pakistan’s start-up scene is thriving. 2016 APICTA event saw Pakistan winning multiple awards There are a number of Start-Up Incubators funded by both private individuals and multinationals (like Google), creating a highly vibrant and innovative ecosystem.
In these rapidly changing times, businesses must not only become efficient, but transform through innovation. The lack of flexibility with traditional outsourcing vendors is compelling businesses to partner with “mode 2” technology partners that are more agile, nimble and efficient. The value equation with mode 2 partners is a no-brainer, given the opportunity cost of not being able to deliver quickly, efficiently, and with high quality.
Pakistan as a technology outsourcing destination is delivering the value that businesses are demanding, and for this reason, many businesses are being smart about where they are turning to for their offshore outsourcing needs.