IT Outsourcing and Bangladesh IT Policy

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IT Outsourcing and Bangladesh IT Policy

• Presentation
• by
• Sayeed Rahman
• Founder of BANGLA IT
• Bangladesh Information Technology (IT) Group
• Dec 20, 2004
• http//www.banglait.org

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" MAKING BANGLADESH A NEW SILICON DELTA
Recognition of Bangladesh as an emerging
Silicon Delta is the vision of all of us. We
believe we can all bring our aspirations to
fruition by pulling together, as one. With that
vision held aloft, our primary objective for
Bangladesh Information Technology (IT) group mail
list would be to exchange ideas, share articles,
present the current trends, and introduce
futuristic vision directly related to the real
development of the IT sector in Bangladesh. The
idea is to create awareness among budding
Bangladeshi entrepreneurs and IT architects. This
IT forum, dedicated to the Non Resident
Bangladeshi(NRB) and RB IT professionals and
students, will make a difference in the years to
come. IT professionals and students from all over
the world are cordially invited to join this
group to get an overview of the cutting edge,
state-of-theart technology and future job
trends. Vision To provide technical
leadership in meeting the needs of Bangladeshi
Citizens by addressing ICT opportunities through
the effective use of technology
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Mission We strive to bring this Mission to
fruition by aspiring to be an organization that
is A catalyst for emerging technologies Provid
e information and guidance to Bangladeshi
companies to achieve certifications such as
CMM/PCMM/CMMI Provide a single source of
information on IT services and industry in
Bangladesh Transforming the Internet into a
powerful environment for Bangladesh
Education Recognized as a center of expertise
for Information and Communication
Technology Help Bangladeshi companies access the
expertise of the non-resident Bangladeshi (NRB)
community in the ICT industries around the
world Use Open Source Software for the
development of Bangladesh Share information,
experiences and resources to realize the
potential of Information and Communication
Technologies to improve lives, reduce poverty and
empower people http//groups.yahoo.com/group/bang
la_ict/ Subscribe bangla_ict-subscribe_at_yahoogr
oups.com
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The need for ICT in Bangladesh

• ICT plays an indispensable role in promoting
  openness, accessibility,accountability,
  connectivity, democracy and decentralization- all
  the soft qualities so essential for effective
  social, economic, and political development.
• Bangladesh needs the capacity to network with
  people, ideas and initiatives. This is as
  critical and fundamental to nation building as
  water, agriculture, health and housing, and
  without it, Bangladeshs democracy could founder.

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Background

• Computer use started back in 1964 by Atomic
  Energy Center, Dhaka and Universities, first main
  frame computer came to Bangladesh in 1964
• The Internet came late in Bangladesh, with UUCP
  e-mail beginning in 1993 and IP connectivity in
  1996 . By July 1997 there were an estimated 5,500
  IP and UUCP accounts
• Source http//www.c2o.org/reports/Report_PAN_Asi
  a_Networking.pdf
• In June, 1996 the government decided to allow
  private companies to act as Internet Services
  Providers (ISPs) using VSATs.
• In June 1997, the Government of Bangladesh
  appointed a Committee to look into the problems
  and prospects of export of software from
  Bangladesh. The Committee submitted its report in
  September, 1997.
• http//www.sdnbd.org/sdi/issues/IT-computer
  /expartsoft-report.htm
• The government has taken a decision on June, 1998
  to withdraw all import duties and VAT from all
  computer hardware and software. This has brought
  the prices of computers down to a level
  affordable by middle income households

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Cell Phone Networks in Bangladesh
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Telecom Infrastructure in Bangladesh

• 950,000 fixed lines Operated by BTTB- (Government
  monopoly)
• Next five yrs demand for fixed lines will be 3.5
  million and experts think BTTB will be unable to
  deliver.
• 3.3 million Mobile Phones- Operated by Four
  Company
• Bangladesh mobile market has potential to grow
  for 15 million user by next three years
• Grameen- Current subscriber base of GP is 2.1
  million while it has coverage in 52 districts
  including all six divisional headquarters.
• Aktel- 900,000 subscriber
• CityCell- 330,000 Subscriber covers 46 districts
• Sheba Telecom (Banglalink- New owner Orascom)
  60,000 subscriber
• 32,000 Village phones are in operation in 52
  districts, 60,000 Bangladeshi women making living
  as Grameen phone ladies. Source Grameen, BBC
  News, BD Media

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The Digital Divide

• More than 600 Million people worldwide have some
  sort of access to the Internet. That is an
  astonishing number, and reflect the rapid growth
  of the network since it was invented in 1970s.
• While over half of UK households are online, only
  0.1 of homes in Bangladesh (Source BBC News)
• Present Position in Bangladesh
• Registered Dial-Up user accounts 250,000
• Broadband(Radio, Cable, xDSL) accounts 15,000
• Cyber Café Users 25,000
• BTTB is now offering its service in all 64
  districts Source http//www.bttb.net

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Total Number of Internet Service Provider

• Prior to the formation of BTRC(Bangladesh
  Telephone Regulatory Commission) Total Number of
  ISPs 130
• Operational around 62
• Highest Bandwidth available now 4 mbps Source
  http//www.ispabd.org
• Internet User about 2,000000
• Internet Access Charge went down to .20 paisa/min
  (2 am 8am)
• Tk 3000 for Unlimited Access
• Broadband-64kbs Tk 10,000/month, 128kbs Tk
  22,000/month
• 512 Kbps Tk 96,000/month Source Grameen
  Cybernet

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Recent Developments

• Grameen Phone launch Wireless Application
  Protocol (WAP) service on July1st, 2001 and Short
  Message Service.
• Ministry of Science and Technology has been
  renamed on April 2002 as Ministry of Science and
  Information and Communication Technology
• BTRC (Bangladesh Telephone Regulatory Commission)
  was set up in Jan, 2002
• VoIP ( Voice Over Internet Protocol) has been
  legalized on Nov 10, 2003, Government suppose to
  break the Monopoly on Fixed Lines (BTTB) by June
  2003 but its unlikely to see Fixed Lines phones
  by 2004
•  Equity and Entrepreneurship Fund is being
  introduced
• http//www.bangladesh-bank.org/about/dept/eefu/ee
  fu.html

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Global Information Superhighway

• Submarine Cable connection to Global Information
  Superhighway(SEA-ME-WE-4) will be ready for
  service in 2005. It will be built using DWDM
  (Dense Wavelength Division Multiplex) technology
  with 1.28 terabits per second speed

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Bangladeshs Strengths

• A substantial number of educated unemployed youth
  force, with ability to read and write English
• About 2500 Bangladeshi NRB(Non Resident
  Bangladeshi) IT professionals employed in North
  America
• Total number of ICT related graduate every year
  now Bangladesh producing about 5000 from 21
  Public and 51 Private Universities
• A large number of Bangladeshi students are
  studying overseas in Computer related subjects,
  specially in India
• Bangladesh offers a very attractive
  cost-effective wage level for Programmers about
  half of India
• Visit http//www.banglait.org for more info

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IT Outsourcing
Where CMM Comes From The CMM was a direct
response to the Air Force's frustration with its
software buying process in the 1980s. The Air
Force and other DoD divisions had begun farming
out increasing amounts of development work and
had trouble figuring out which companies to pick.
Carnegie Mellon University in Pittsburgh won a
bid to create an organization, the SEI, to
improve the vendor vetting process. It hired
Humphrey, IBM's former software development
chief, to participate in this effort in 1986.
Humphrey decided immediately that the Air Force
was chasing the wrong problem. "We were focused
on identifying competent people, but we saw that
all the projects the Air Force had were in
troubleit didn't matter who they had doing the
work," he recalls. "So we said let's focus on
improving the work rather than just the
proposals." The first version of CMM in 1987
was a questionnaire designed to identify good
software practices within the companies doing the
bidding. But the questionnaire format meant that
companies didn't have to be good at anything
besides filling out forms. "It was easy to cram
for the test," says Jesse Martak, former head of
a development group for the defense contracting
arm of Westinghouse, which is now owned by
Northrop Grumman. "We knew how to work the
system." So the SEI refined it in 1991 to
become a detailed model of software development
best practices and added a group of lead
appraisers, trained and authorized by the SEI, to
go in and verify that companies were actually
doing what they said they were doing. The lead
appraisers head up a team of people from inside
the company being assessed (usually three to
seven, depending on the size of the company).
Together, they look for proof that the company is
implementing the policies and procedures of CMM
across a "representative" subset (usually 10
percent to 30 percent) of the company's software
projects. The team also conducts a series of
confidential interviews with project managers and
developersusually during the course of one to
three weeks and, again, depending on the size of
the organizationto verify what's really
happening.
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  U.S. CIOs want to do business with offshore
companies with high CMM ratings. Why?
Today, many U.S. government agencies in addition
to the DoD insist that companies that bid for
their business obtain at least a CMM Level 3
assessmentmeaning the development organization
has a codified, repeatable process for an entire
division or company.   CIOs increasingly use CMM
assessments to whittle down the lists of dozens
of unfamiliar offshore service providersespeciall
y in Indiawanting their business. For CIOs, the
magic number is 5, and software development and
services companies that don't have it risk losing
billions of dollars worth of business from
American and European corporations.   "Level 5
was once a differentiator, but now it is a
condition of getting into the game," says Dennis
Callahan, Executive Vice President and CIO of
Guardian Life Insurance. "Having said that, there
are some Level 3 or 4 startups that we might
consider, but they have a lot more convincing to
do before I would do business with them. They
would be at a disadvantage. With CIOs
increasingly dependent on outside service
providers to help with software projects, some
have come to view CMM (and its new, more
comprehensive successor, CMM Integration, or
CMMI) as the USDA seal of approval for software
providers.   The depth and wisdom of the CMM
itself is unquestioned by experts on software
development. If companies truly adopt it and move
up the ladder of levels, they will get better at
serving their customers over time The Five
levels of CMM Level One Company has no standard
process for software development. Nor does it
have a project-tracking system that enables
developers to predict costs or finish dates with
any accuracy. Level Two Company has installed
basic software management processes and controls.
But there is no consistency or coordination among
different groups.
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Level Three Company has pulled together a
standard set of processes and controls for the
entire organization so that developers can move
between projects more easily and customers can
begin to get consistency from different groups.
Level Four In addition to implementing
standard processes, company has installed systems
to measure the quality of those processes across
all projects. Level Five Company has
accomplished all of the above and can now begin
to see patterns in performance over time, so it
can tweak its processes in order to improve
productivity and reduce defects in software
development across the entire organization.   Sour
ce CIO.COM CMM-I CAPABILITY LEVELS CAPABILITY
LEVELS IMPLEMENTATION IN A SERVICE ORGANIZATION
Level 0 Incomplete The Organization
implements only some applicable specific
practices Level 1 Performed The Organization
lacks the necessary processes for sustaining
service levels Level 2 Managed The Organization
manages and reacts, but isnt able to
strategically predict costs of services and
compete with lean competitors Level 3
Defined The Organization anticipates changes in
its environment and plans, but still lacks the
ability to forecast changing costs and schedules
of services Level 4 Quantitatively Managed The
Organization statistically forecasts and manages
performance against selected cost, schedule,
and customer satisfaction levels Level 5
Optimizing The Organization can reduce operating
costs by improving current process performance
or by introducing innovative services to maintain
their competitive edge Source SEI
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COST   When done correctly, CMM is a costly,
time-consuming effort. The average time for a
company to move from Level 1 to Level 5 is seven
years, and the expense of building a really
robust, repeatable software development process
with project and metric tracking is many times
the cost of a CMM assessment (which alone costs
about 50,000)   The higher CMM levels (3 and
above) require that a company have a centralized
process for software development and project
tracking, among other things. Since everyone
across the company is supposed to use that same
process that was used in the projects that were
assessed at Level 5, for example, all projects
across the company can be assumed to be at Level
5.   More recently, the SEI toughened up the CMM
itself and plans to completely replace it (as of
December 2005) with a broader, more in-depth
model called CMMI. In the process, it has
increased the training requirements and controls
on appraisers. Under CMMI, the SEI reviews each
appraisal that comes in for irregularities. And
under CMMI, appraisers have to file a report
called an Appraisal Disclosure Statement that
clearly states which parts of the organization
and projects were assessed, as well as all the
people who took part in the assessment (though
assessed companies are not required to reveal
that report publicly, either). The SEI, along
with the lead appraiser community, is also
developing a "code of ethics" for appraisers.
SEI has no intention of becoming a governing
body like the American National Standards
Institute (ANSI), which controls ISO 9000
certification in the United States. ANSI requires
companies to be reassessed every six months if
they want to maintain their ISO 9000
certification and reassesses all its appraisers
each year.
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Critical Questions CIOs Will Be Looking Who was
the appraiser?   How many Level 5 assessments
has he done? (If, for example, the appraiser had
never evaluated a Level 5 company before, he will
not be well qualified to know what a Level 5
company really looks like.) What part of the
company was tested?   "Enterprise CMM" companies
may have had 10 percent or less of their projects
assessed to get the level. How long ago was
this done?   If it's more than two years old,
chances are it has little meaning because the
company will have changed and, in the case of
offshore companies, may have grown many times the
size it was when assessed. How long did it take
the company to move from one level to another?
  If it's fewer than two years between Levels 1
through 4, or fewer than one year between Levels
4 and 5, that does not fit with the average.
Check the company out further. Where is your
evidence of continuous improvement?   CMM Level
5 means continuous improvementmake the company
show you its improvement history. Who runs the
quality group?   Ask to meet the quality
organization that monitors and audits the
process, and make sure it isn't ghettoized. There
should be more than a handful of people, and they
should have the power in the organization to
change things. They should report directly to the
CEO, and the company should link the quality
system to executive accountability and
compensation. Was the appraiser from inside or
outside the organization?   Internal assessors
cannot be as objective as external lead assessors
who have no links to the company
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• Where are the reports?
• Ask for formal documents that the assessor must
  provide to the company, most importantly the
  Final Findings Report (discusses strengths and
  weaknesses of the company) and, for CMMI, the
  Appraisal Disclosure Statement (states exactly
  where, when, how and by whom the assessment was
  done). If the documents are vague or fluffy, ask
  for more detail. The company has it. If the
  company won't let you see the reports, move on.
  You may have found a cheater. What types of
  projects were assessed?
• If you're a financial services organization, you
  want to make sure that at least one of the
  projects assessed had something to do with
  financial processes. Did the appraiser consult
  on the processes being assessed?
• Appraisers are supposed to be independent and
  objective. If they've helped the company develop
  the processes they are rating, it's a conflict of
  interest, and they may be tempted to improve the
  ratings to get their consulting fees. How does
  the company train new people to be CMM Level 5?
• If the company doesn't train well, it will not
  sustain its CMM level for long.
• Why CMMI?
• Process improvement has become essential to the
  overall success of all organizations, with more
  pressure on IT to make a positive and measurable
  impact on the bottom-line. Organizations that
  fail to take control of their IT processes are
  finding it increasingly difficult to compete and
  remain competitive in the global marketplace.
  According to recent Carnegie Mellon University
  Software Engineering Institute studies, companies
  that implemented the CMM and CMMI reported
• 33 decrease in costs to fix a defect
• 50 reduction in cycle time
• 30 productivity increases
• ROI ranges from 21 up to 131

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Comments It doesn't matter how good
a company's programming skills are. Until
business folks and IT folks are taught how to
collaborate effectively with each other, business
will continue to be frustrated by its inability
to get satisfactory results from IT related
projects. Advertising from TCS Quality
Initiative- 15 SEI CMM Level 5 Centers (12,000
consultants) and over 1600 Certified Quality
Analysts (CQA), State-of-the-art R D and IT
Training Facilities News February
2000 http//www.tcs.com/0_media_room/releases/2000
02feb/200002_cqa_top.htm TCSer tops the Certified
Quality Analyst (CQA) examination - Third time in
a row Mr. Raju Dutta from TCS Calcutta has scored
the highest marks in the CQA exam conducted
worldwide in Oct'99. To date there are
approximately 2000 active CQA's all over the
world of which 678 are from TCS, the highest
number of CQA's in any organisation world-wide
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E-Government

• http//www.bangladesh.gov.bd/
• http//www.mosict.gov.bd/
• These two web sites will give you the answer ,
  where we are and what need to be done
• Most of the web sites contains obsolete
  information even the Universities dont have any
  web sites.
• No interactivity emails are not replied
• Recently by newspaper report shows that
  Bangladesh Police to adopt E-Government to fight
  crime
• Bangladesh eGov for DevelopmentBangladesh's
  Ministry of Communication (MoC) set up a series
  of Web sites in 2003 to improve the flow of data
  from government to citizens. As a part of
  introducing e-governance, the Ministry of
  Communication in Bangladesh launched four Web
  sites of its major departments to enable citizen
  access to government information. In general
  terms, the Web sites provided information in
  English about the organisation, personnel and
  activities of the four agencies.
  http//www.egov4dev.org/banglaweb.htm

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We can evaluate the project cost, which have been
created as part of a much larger US7 million,
four-year reform project of the Ministry of
Communication, 80 of which is donor-funded. As
it says The benefits to citizens are unknown,
but one should not underestimate the gains
delivered by publication of even basic
information in a medium ofgrowing accessibility
information that was often hard to access before.
Impact Costs and Benefits The Web sites have
been created as part of a much larger US7
million, four-year reform project of the Ministry
of Communication, 80 of which is donor-funded.
Capital costs for the Web infrastructure were
bundled into the larger project maintenance
costs for the Web site (ten staff plus Internet
connection costs, excluding depreciation costs
for IT) are aroundUS60,000 per annum. The
larger project began in 1999 Web-related
developments began in earnest in 2002, leading to
launch in mid-2003.
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E- Commerce

• CSE (Chittagong Stock Exchange) offers Online
  Trading of Stocks
• Few Private Banks are offering online Banking
• http//www.bdauctions.com/home.htm
• Market place combining B2B, B2C C2C resource
  groups to buy and sale all sorts of new and used
  products
• http//www.homeviewbangladesh.com
• Offers variety of consumer items
• Visit http//www.banglait.org

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Concerns and Recommendation

• BASIS and MOSICT should encourage Bangladeshi
  Software companies to get certified for
  CMM(Capability Maturity Model) from Software
  Engineering Institute http//www.sei.cmu.edu/cmm/
• http//www.sei.cmu.edu/ instead of ISO 9001
• BTTB need to be privatized ASAP
• Open a cell on EPB for monitoring the ICT related
  exports like Pakistan Software Export Board
  http//www.pseb.org.pk/ which will keep track of
  IT and ITES export for Bangladesh
• Be open when it comes to vital data about
  Bangladesh IT export, our so called ICT policy
  makers should give real data instead of imaginary

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What should be done?

• BASIS should target a realistic number for IT
  ITES export by 2006 instead of imaginary 2
  Billion, when our last fiscal year IT ITES
  export was only paltry 3.2 million (2002-03),
  India's booming software export sector has a
  share of around 10 billion last fiscal
  (2002-2003) year and Pakistan has only 60
  million
• Promote e-governance-Ease of governance with less
  scope for corruption
• As the formation of BASIS was according to Dr.
  JRC Committee Report to folllow the example of
  NASSCOM http//www.nasscom.org "Encourage firms
  involved in software development and data
  processing services to form an association in
  line with e.g. NASSCOM."
• So far Recommendations were given not for the
  Peoples of Bangladesh only for personal gain!

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What should be done?

• We need to reorganize the leadership on
  BASIS(http//www.basisbd.org),BCC(http//www.bccbd
  .org)BCS for our real ICT development and enhance
  the image of our country
• Bangladesh spends only 2.2 of GNP on Education
  compared with 3.4 by Sri Lanka, 3.2 by both
  India and Nepal and 2.7 by Pakistan. We need to
  spend more on Education of our GNP. Source
  www.adb.org
• Make our Polytechnic Institutes breeding ground
  to provide Associate Degree in CS or reorganize
  them as BITs, since all 4 BITs are recently
  being transformed to Science Technology
  Universities
• From Statistics per capita investment in
  education in Korea 170, in Malaysia 150, in
  India 14, in Pakistan 10 and in Bangladesh its
  only 5

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What should be done?

• Invest at least 5 of our yearly defense budget
  on IT related RD, take example from Israel,
  India, Pakistan, todays war is Network Centric
• Make compulsory IT training for all Government
  Officials and Defense Officials.
• Make compulsory English for all Graduate Level
  Courses
• Promote IT-Enabled Services like Medical
  Transcription, Call Center, Data Entry, which
  requires only 3-6 months training
• Target to produce ICT related graduates about
  25000/yr by 2006, now Bangladesh producing
  5000/yr from Public/Private Universities
• Invite at least one big company like Microsoft,
  Motorola, IBM to open a development center in
  Bangladesh that should be our target

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What should be done?

• All Government Organization (Ministries/Offices)
  with whom Citizen need to interact must have
  websites
• All Private/Public Universities must have
  websites and their Final Year CS students could
  developed these web sites as their projects
• Teachers should be updated with latest technology
  rather than sticking with their old lectures
• Emphasis should be given to open source
  technology with highest priority
• We shouldnt focus on giving away 10,000- 25,000
  computers to schools rather we should make
  25,000 computer literate teacher for schools
  colleges
• The government also dreams of changing the
  country through IT, although not farsighted
  enough to make investment in IT Education
• Compare to other Engineering Science education
  IT education requires low investment which is
  good for poor countries like ours

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Success Stories in BangladeshICT

• At present 32,000 village phones are in 52
  districts, 60,000 Bangladeshi women making a
  living as Grameen phone ladies, as they are
  known. Thus emerged Bangladesh's 'telephone
  ladies,' who gained social importance-not to
  mention income-from selling wireless service to
  fellow villagers. The women, who power their
  phones with solar panels, now make 500 per
  month, about the same amount as earned by the
  typical CEO of a Bangladeshi bank a far cry from
  the annual average income of US380. As of
  November, 2004, Grameen has over 2.1 million
  subscriber and phone ladies, who are 3 of the
  subscriber, uses 15 of the airtime of the
  company
• In the early 1990s, when Iqbal Quadir founder of
  Grameen Phone was looking for investors to back
  his idea for a mobile-phone network in
  Bangladesh, he said he was turned down by an
  executive at a cell-phone company in New York who
  told him, "We're not the Red Cross. At the end
  of 2001, Quadir showed how Third World ventures
  can be profitable - and provide a useful service
  - when GrameenPhone Ltd., the cell-phone company
  he founded in Bangladesh, made 27 million in
  pretax profit. It turned that profit after just
  five years far sooner than many First World
  start-ups.

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Disaster Recovery Planning
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Bangladesh ICT Policy http//www.sdnbd.org/sdi/iss
ues/IT-computer/itpolicy-bd-2002.htm 3.4.1.6 An
annual target of 3 (three) billion US dollars
from earnings of export of software, data entry
and IT-enabled services shall be planned up to
year 2006. The target shall be revised
periodically to match the growth of the
market. Information Technology Policy Information
Technology Policy 2001-2005 - (Draft)
BASIS  Domestic IT Industry will have an Export
Target of US 2 (Two) Billions by June 2005
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http//www.outsourcebangladesh.com