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Accenture’s withdrawal jolts outsourcing industry

  • Published at 01:18 am July 20th, 2017
  • Last updated at 01:21 am July 20th, 2017
Accenture’s withdrawal jolts outsourcing industry
When Accenture PLC, one of the largest consulting and outsourcing companies in the world, started operations in Bangladesh in 2013, it was seen as another sign that the country was fast becoming a popular destination for business process outsourcing or BPO. Four years on, the outsourcing giant has shut up shop in Bangladesh, terminating all 556 of its local staff and sending a jolt through the outsourcing sector, which has an ambitious target of earning $1 billion annually in BPO services exports by 2021. Accenture entered Bangladesh by acquiring 51% of shares in GPIT, a subsidiary of mobile phone operator Grameenphone. Accenture Communications Infrastructure Solutions Limited, as the new company was called, hired most of GPIT’s staff, as well as taking on its existing work, the bulk of which was providing IT support services to Grameenphone. The aim of the strategic partnership, industry analysts said, was for Accenture Bangladesh to become an outsourcing hub for Norwegian telecom giant Telenor, which has a controlling interest in Grameenphone and several other phone companies in the region. Accenture would provide support services such as call centre management, data management, as well as research and analytics for Telenor while trying to attract international BPO contracts from North America and Europe. On Tuesday, Accenture said in a letter to employees that they would be paid termination benefits and dues by November 30, when the company would cease operations. The letter did not provide a reason for the decision.
Industry insiders told the Dhaka Tribune that Accenture Bangladesh was dependent on the BPO contract with Grameenphone from the beginning and had not developed significant alternative revenue sources
Shahin Ahmed, general secretary of Accenture Employees Union, Bangladesh, said Accenture’s departure would send the wrong signal to investors in the BPO sector. “If a global company like Accenture leaves suddenly like this, that will be interpreted as a bad sign,” he said, adding that the move would jeopardise the professional careers of hundreds of the company’s employees. The employees’ union called for an immediate strike to protest the management decision. Shahin Ahmed said negotiations had started to finalise the employee’s exit plan. Sources said Accenture was offering 18 months’ basic salary for the terminated employees while the employees were demanding 60 months’ basic salary. “I joined Grameenphone hoping for a bright future. Later, my job shifted to GPIT and then to Accenture. Now I’m jobless and I don’t know how I will survive,” an Accenture employee said on condition of anonymity. Ahmadul Hoq, president of the Bangladesh Association of Call Center and Outsourcing (BACCO), said the joint venture initiative of GPIT and Accenture was ambitious but the plan may not have been properly executed. “Though Accenture decided to shut the Bangladesh office, it will not hamper outsourcing business in the country,” he said, adding that the sector was growing and could easily absorb the laid-off Accenture employees. Mustafa Jabbar, president, Bangladesh Association of Software and Information Service (BASIS), said it was sad that an established global BPO company had decided to shut down its Bangladesh operation. It would give a negative message to the world at a time when Bangladesh is trying to bring further foreign investment here, he said. [caption id="attachment_90018" align="aligncenter" width="900"]Zakir-(4) Photo: Syed Zakir Hossain[/caption] Industry sources told the Dhaka Tribune that Accenture Bangladesh was dependent on the BPO contract with Grameenphone from the beginning and had not developed significant alternative revenue sources. Around 50% of its manpower was engaged with Grameenphone’s work while most of the rest worked for Telenor global services. The relationship with Telenor turned sour recently when Accenture raised its service charges, sources said. This prompted the Norwegian company to opt for an open tender for services, leading to the contract to be awarded to Wipro, a Bangalore-based Indian BPO company. At the same time, Grameenphone created an in-house unit to provide IT support. Accenture was simultaneously under pressure from the employees’ union to raise salaries and benefits. “The loss of the GP contract pushed them over the edge,” a source said. Accenture decided that the company’s Bangladesh arm could not viably compete for international contracts, the source said, prompting the company to pull out. Sayed Talat Kamal, head of external communications, Grameenphone Ltd said: “Accenture, Telenor Group, and Grameenphone are working closely together to re-organize several engagements across Asia and Europe. As a result, the services currently provided by Accenture Communications Infrastructure Solutions Limited (ACISL) will be transitioned to both in-house and to Wipro, a leading global IT service provider who is in the process of setting up new operations in Bangladesh.” “Some of the employees of ACISL will have the opportunity to be offered roles by Wipro,” he added. Raihan Shamsi, CEO of ACISL, declined to comment and directed the Dhaka Tribune to the Grameenphone statement. Telenor did not immediately respond to requests for comment. The Global outsourcing market, which includes management, consulting, technology and voice-based services is worth roughly $400 billion annually. Bangladesh earned around $180 million through BPO last year, according to industry sources. The ICT ministry has announced ambitious plans to earn $1 billion from BPO exports by 2021, generating nearly 100,000 jobs, up from 35,000 jobs in 2017.