Nepali companies are gunning for labor-intensive IT-enabled services. After failing for years to get foreign software development jobs in Nepal, IT entrepreneurs are now gaining access to the international IT world, which allows to create labor intensive jobs
The first movers in IT-enabled services were Geographical Information System (GIS) and data creation companies. The Japanese-funded Geo Spatial Systems were the first in, venturing into converting old hand-drawn cartographic maps into digital format. Then came in the medical transcribers
What make this sector important is that it currently provides around 1,000 Nepalis with hi-tech jobs. Employees don’t need to have first class hi-tech backgrounds. The companies have trained even high school graduates for the jobs. Necessary are people who understand English, and can maintain a certain quality of work. Their level of education is only to some extend important but trainability is.
Initial investment in IT-enabled services has crossed Rs 500mio and as the companies grow and more come in, the investment amount is fast rising. Most companies work only single shifts now, but are aiming at round-the-clock services. If properly planned, revenue from such services can reach Rs1bn annually and more and can provide jobs to at significant number of people.
The question then is why Nepal should be an attractive destination for firms overseas to outsource such work when IT giant India is right next door. The general consensus is that Indian companies are moving towards global e-commerce-oriented services. Nepal lacks up to now skilled manpower for advanced services, but has a workforce that can be trained and so has a slight price edge over India.
Entrepreneurs are doing their best, but it isn’t really smooth sailing. One very big problem seems to be the indifference and to some extend incompetence of the bureaucracy. This has changed over the last few years only slightly. Even though new laws have been introduced the IT- enabled services sector is not yet regarded as an industry and doesn’t receive significant concessions.
Yet, for all that IT businesses remain open to new ideas. As the Internet has grown, new avenues have opened up. Entrepreneurs here hope and are certainly acting on the premise, that there will be a trickle-down effect. In such a large and diverse global market, they feel, Nepal can definitely corner a niche somewhere. And developing the requisite expertise in IT-enabled services, will perhaps help the country move into other IT arenas.
Nepal has the potential to emerge as a global destination and a hub for IT enabled services. Amongst others, it offers cost and quality advantages. A virtual 12-hour time zone difference between Nepal and USA offers a solution that becomes totally never-ending with cost and time saving. A sizeable pool of English speaking and computer literate workforce helps to cater to the growing demand of professionals for IT enabled services. But keep in mind that even though the number of professionals available in this country is significant and growing the demand grows faster.
Estimates suggest that the global market for telephone based industries and peripheral information services activities reached in 2005 around US $650bn. The industry is steadily growing and is showing no signs of abetting. However, the outsourcing of IT Enabled Services is growing very fast. Nepal could have an important role to play in this outsourcing and out locating market.

What are attractive IT services?

Computer Software Development
The vast changes in computer technology and the mass production of very versatile microcomputers have made the use of computers very widespread. The particular needs of computer users are also becoming increasingly specialized creating a demand for customer designed software packages. The development of computer software has thus become a very promising and profitable business and current indications are that this trend will continue in the future. Due to costs involved in software development in many of the development countries, there is an increasing tendency among firms to purchase/develop their software needs in low cost locations in some developing countries, as against in house software development. Nepal has well educated and trained manpower who could undertake the development of computer software packages to meet the special needs of individual clients. The cost of developing software in Nepal would be a small fraction of developing them in a developed country. Already one joint venture company is successfully operating such a system in Nepal. Prospects for setting up a few more software development houses in Nepal are promising. Computer software houses could undertake custom programming, tailoring software packages to operating systems of new machines and generating specialized software for various professional and manufacturing services.

Call Centres
used by most of the large services and manufacturing organizations to provide customer information and services. The are used for responding to customer queries, telemarketing, conducting customers surveys, etc. One drawback for this service are the up to now high costs of telephoning even though the cheap VOIP gets a growing share of the call market.

Medical Transcription
this consists of transcribing medical advice recorded by doctors into Dictaphones or other such recording equipment, and sending them back electronically. The recorded advice are sent to offshore medical transcription centers in remote locations, through electronic means or through physical delivery. The medical transcribers listen to recorded accounts of diagnoses and surgery and then transcribe them to be stored in computer databases. Countries have specific rules about how medical records should be transcribed, so quality is a matter of highest concern here.
As far as we know two Medical Transcription companies have already started in Kathmandu.

Back Office Operations, Revenue Accounting, Other ancillary operations
Paper documents/raw data are sent to remote locations, which are used for data entry and necessary reconciliation. Using high speed datacom links for backoffice and data processing operations, organizations with extensive data turnover and customer interface, are able to save costs and improve productivity. Airlines and Banks are the main organizations who require these services.
Nepal is in a strong position to undertake data entry operations for foreign clients at very competitive prices. Personnel required for data entry operations are available at relatively low cost. Facilities are also available to transmit information required for data entry operations with speed and at relatively low cost.

Insurance Claims Processing
Insurance, a typical instance of data-intensive industry, receive a myriad of claims from their customers. The claims submitted can be processed on the basis of well defined rules and parameters. Remote locations like Nepal can save costs.

Web/Digital Content Development
The services required for developing digital or web content for intra organizational dissemination, web site development and maintenance, CD-ROMs and other forms of new media channels. It’s a multi-billion dollar industry which is growing as well.

Mapping and Digitization
As the world maps get digitized, the older maps need to be corrected with newer construction data and updates. There are already two Japanese companies in JV in Nepal for this kind of work and three more companies have started .