Doom and Gloom in Pakistan
October 22, 2007 Despite the political troubles in Pakistan , AT Kearney just ranked it as one of the leading outsourcing destinations. Still in its infancy, the Pakistani outsourcing segment quite healthy for one reason; expats. Today, software development companies in Pakistan that deal with Western clients are founded and managed by Pakistani nationals that trained and worked in the US. They understand the demands of the US market and the level of professionalism, communication, and expertise required. In mature outsourcing destinations like India, vendors are popping up left and right… usually with little business credentials, or at least none doing business with Western clients. The mature and stable Indian offshore companies, most of which were founded by Indian expats are now so large that they are quite selective with the types of clients that they work with (usually F1000); hence the headache for SMB's in finding a reliable provider. Now there are literally hundreds, if not thousands of smaller outsourcing vendors that smell money. They're reaping the benefits of work done by their larger counterparts 20 years ago. Unfortunately, these firms have not developed the business processes and professionalism expected by clients; a major reason why many US clients that work with offshore vendors bring the work back.
The Pakistani outsourcing industry is ideal for SMB's because vendors in India are in a dog fight. The bigger ones don't find it profitable to work with smaller clients and the smaller vendors have very little experience working with western clients. The Pakistani vendors (in addition to Filipino, Vietnamese, Ukranian, etc.) that are keeping customers happy and growing while navigating the political turmoil, economic disparity, are proving themselves and making themselves bulletproof. Eventually, as they grow, they will be more mature and selective. If you're a SMB looking to go offshore, look for vendors in emerging outsourcing destinations with a management team that has worked in the US and you can expect much better results.
Reader Comments (6)
Very interesting point, this is the time to grab a good vendor. It won't be possible to do that a couple of years from now. In 2003 the Pakistani offshore companies were doing about $300 million worth of business, now it is around $3 billion with a forecast of $10 billion by year 2010. But do check the references of anyone you are planning to work with.
Very accurate article. I have been dealing with many vendors for about 5 years now and we have seen the quality of Indian firms go down while price continues to rise. Pakistan has been a great alternative and we find the firms to be very professional and fast. So far we have had good luck, hopefully it will last a while.
Quite an interesting insight . I very much believe the same , even with the present "political turmoil" , life is still moving in Pakistan and so are the Small 20-30 people software companies.
I wonder if the author was talking about me when writing this article. I totally agree with him. Many of the small IT firms in Pakistan are currently being run by people who have lived in North America for more than a decade and have a good exposure to dealing with Western Customers. We do cater mostly to the niche demands of small to medium size companies. The only thing I as a CEO of a software house in Karachi I wish for is political stability and better law and order situation. It would really help smooth our operations and enable western clients to trust offshoring to Pakistan.
yeah, as the situation unfolds we'll see what happens. As they say, "the show must go on"
www.software-sweatshop.com
Raza,
Is there a website or a list that lists all those small companies that are dealing with foreign-outsourcers?
Arsalaan