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Last Updated: Tuesday, 13 July, 2004, 16:57 GMT 17:57 UK
Sri Lanka embraces outsourcing
Outsourcing in India
200,000 British jobs are forecast to move overseas in next five years
Sri Lanka is to become the latest destination for British companies outsourcing their operations overseas.

India's leading provider of third party business process services, is opening an office in Colombo.

WNS, which provides accounting and other business process functions, said it had signed up one of Britain's largest companies as its first client.

Outsourcing of back office business services, which is largely concentrated in India, is worth $1.6bn globally.

"Sri Lanka has a pretty good business climate and there is a tranche of people who are very well educated and widely travelled"
David Tibble, WNS Global Services

WNS said it was expanding into Sri Lanka because of the availability of highly qualified English speaking staff with specific expertise in professional services such as accountancy and commercial law.

WNS plans to hire 50 staff initially. The recruits will provide a range of accounting services including preparing foreign company accounts.

David Tibble, executive chairman of WNS Global Services, said all its Sri Lankan staff would either have been trained in Britain or possess internationally accepted legal or accountancy qualifications.

Client list

Mr Tibble would not reveal the identity of its first client but said it was a FTSE 100 company.

He said: "Sri Lanka has a pretty good business climate and there is a tranche of people who are very well educated and widely travelled. They have an international outlook and a good work ethic."

WNS' Indian clients include Norwich Union, WPP, Royal Sun Alliance and British Airways.

BA established WNS in 1996 to handle some of its ticket processing and other data management functions.

It sold the business to venture capital firm Warburg Pincus in 2000 although it retained a 30% stake. It will not be transferring any of its business to Sri Lanka.

India accounts for approximately 90% of the offshore business process outsourcing industry, employing more than 100,000 people.

Cheaper labour

Labour costs are even lower in Sri Lanka than India, making it potentially attractive to European companies looking to make savings.

However, it has a far smaller pool of qualified English speaking professionals and has a lack of large office space and a relatively backward telecoms infrastructure.

Despite this, Sri Lanka hopes to create up to 30,000 new jobs in the sector over the next ten years.

Mr Tibble said opportunities in Sri Lanka would appeal to a limited number of British firms, which wanted to improve productivity while not sacrificing service standards.

"The issue for British companies is how they cope with the growing customer service requirements when the British population is not growing," he said.

"The only way for business to do this realistically is to use a combination of domestic and offshore operations."

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