Business process outsourcing (BPO) is not new in Nepal. It’s been almost a decade since the domestic IT sector saw the emergence of BPO firms.

Since then, the sector is growing, albeit slowly. Although exact data is hard to find, it is estimated there are over 200 large and small BPO companies operating in Nepal, offering employment to more than 3,000 individuals.

GeoSpatial Systems, Serving Minds, Yomari Inc and D2Hawkeye (now known as Verisk Information Technologies) are the pioneers when it comes to establishing the BPO business in Nepal. 

Now, Verisk Information Technologies, DeerWalk Services and BrainDigit IT Solutions are known as the leading players in domestic BPO sector.

Industry insiders say some of these BPO companies’ have a “huge” annual turnover. According to CP Adhikari, coordinator of the Software and BPO Sub-committee at Computer Association of Nepal (CAN), the sector is estimated to have an annual turnaround of more than Rs 5 billion.

Analysts forecast the global BPO market will be worth $93.4 billion in 2015, up from $71.92 billion in 2010, with India, China and the Philippines being the leading BPO hubs.

Although software outsourcing has become a substantial sector by now, the failure of the government to recognise this sector 

has caused a big loss for the economy. 

“The government seems more focused on the exports of products. If the government succeeds in recognising the software outsourcing business, it might turn into one of the best exportable items for the country,” said CAN President Binod Dhakal.

Those involved in the business say software outsourcing is still at nascent stage in Nepal compared to countries like India, China, the Philippines and Costa Rica. But the competition has already intensified within the country among the outsourcers. Brajesh Nepal, chief executive officer of Media Guru, said there are many professionals who silently operate as an outsourcing company limiting themselves to four walls. “Since this job is done purely through the internet, there are companies which prefer silence,” said Nepal.

Though the outsourcing business has a huge scope, Nepali professionals are mostly focusing on outsourcing websites, HR-related software, SMS gateways and mobile phone applications, among others. There are also exceptions, however. A few companies have managed to serve the likes of Disney and Windows, among others.

The outsourcing sector has also turned into one of the best for jobs. Starting from Rs 15,000 for starters, there are young managers who draw Rs 150,000-200,000 a month. “There are examples of a 20-year-old fetching up to Rs 150,000 a month which is huge compared to what even best of the corporate offices in the country offer,” said Pradeep Timilsina, senior system engineer at Syntegrate, a software outsourcing firm.

Mostly, software outsourcing firms are paid on hourly, monthly or project basis, and the pay starts from $10-15 per hour and goes beyond $5,000 per project, depending on the nature of the project. 

What makes the outsourcing business lucrative business in Nepal is the fact that international companies can save up to 70 percent of labour costs compared to their home countries. 

“If an American company develops software in its own country, the cost of production will be much higher as compared to Nepal,” said Nepal, adding countries like Vietnam, Cambodia, the Philippines, Myanmar and China have hugely benefited from software outsourcing, and even Nepal too can benefit from it, but a serious government effort is needed. 

Despite the industry coming to a substantial position on its own, the lack of a government policy has prevented the sector from getting the required exposure. “A huge chunk of money is getting unaccounted due to the absence of a policy,” said Nepal, adding the government should try to incorporate the sector in legal books with appropriate incentives.

One of the professionals seeking anonymity told the Post that numerous companies in Nepal are operating by getting registered as Indian companies. “Since it is easy to get big projects if established as an Indian company, there are many who are doing so,” the professional said, adding the trust factor is there, but the lack of a proper legal framework in Nepal is also prompting professionals to register their companies in India.

Biplov Man Singh, chairperson of the ICT Development Committee at the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), said the government should come up with schemes to bring out these companies locked within four walls. 

“Like in India, the government can bring down corporate tax for such companies to zero percent and only charge income tax for around five years,” said Shakya, adding this will help expose hidden companies.