Software Development Outsourcing to Bangladesh: Worth It(?)


Software Development Outsourcing to Bangladesh: Worth It(?) software development outsourcing to bangladesh

The IT and software industry of Bangladesh is growing at a rapid rate, turning Bangladesh into one of the most favorable destinations for software development outsourcing.

The total volume of software projects outsourced to Bangladesh has doubled over the last few years. With a higher number of graduates coming out each year possessing strong communication skills in English, the outsourcing industry in Bangladesh is growing rapidly.

Many companies have set up offshore development centers in Bangladesh to utilize this ever-expanding talent pool, and Bangladesh is shaping up to be the perfect outsourcing location of the future.

Bangladesh At A Glance

Bangladesh, situated in South Asia, shines with its vibrant culture, picturesque landscapes, and a rapidly burgeoning IT sector.

With a populace exceeding 160 million and a youthful workforce, it has positioned itself as a prime hub for software outsourcing and top-notch IT staff augmentation.

According to the Bangladesh Association of Software and Information Services (BASIS), over 1,200 software and IT service providers call Bangladesh home.

They offer a diverse range of expertise across various technologies such as web development, mobile app creation, and artificial intelligence.

10 Reasons Why You Should Outsource Software Development to Bangladesh

1. The Talent Pool Is Significantly Large

With a population of 169 million, Bangladesh is the eighth most populated country globally. The literacy rate for the age group of 11-45 has seen a 20% increase since 2011, currently at 73.69%.

The country is producing graduates at a steady rate of 1.22% from 164 universities and 2547 polytechnical or technical institutes, ensuring a significantly large workforce.

While the current IT-skilled workforce of the country is rather small (0.22 million), it’s estimated to go up to 0.44 million by 2025.

There is endless potential within the present workforce which can be utilized for growing the IT sector of the country even further.

With such a large talent pool, it’s much easier for an international audience to source for specific skill sets through different types of outsourcing methods for different projects.

2. Educational Institutions Focused On Tertiary Education

According to a national survey performed in 2022, Bangladesh currently has

  • 53 public universities
  • 111 private universities
  • 2225 private technical-vocational institutes
  • 322 public technical-vocational institutes
  • 31 specialized colleges
  • 2 special universities
  • 2 international universities

Most of these higher education institutions offer one or more majors in IT or software engineering-related fields.

With the growth of the outsourcing industry and outsourcing software projects to Bangladesh over the past few years, it has become the primary focus of these institutes to manufacture graduates geared towards the IT industry.

This sudden growth of the IT and outsourcing industry has resulted in more institutions offering tertiary education focused on the IT industry.

They offer courses that revolve around software development, software engineering, quality assurance, product management, etc.

The courses are designed in a way that ensures that all graduates are ready to pick up professional work right after finishing their courses.

This helps any outsourced project owner to hire and utilize human resources within a shorter time frame.

3. IT Prioritization In Government Policies

Ever since the announcement of the “Digital Bangladesh Vision 2021” back in 2008, The Bangladesh Government has made IT and software industry innovations one of its highest priority goals.

Due to high priority, the software and IT outsourcing industry has received special treatment such as tax holidays, subsidized training, etc.

The government has also planned workshops to increase IT awareness among more non-technical students to modernize the educational approach.

4. Ever-Expanding IT Industry

According to a survey, the computing market of Bangladesh was estimated to make a revenue of US$2,673.0m.

The market is also expected to experience an annual growth rate of 8.09% (CAGR 2023-2028).

The growth rate has been constant over the last few years as per prediction, and the entire industry is going strong constantly.

The expansion of such a large talent pool is leading to a workforce that is more trained and experienced than ever before.

The industry’s rapid expansion has increased the enthusiasm of more people from the younger generations to join the sector.

This way, agencies looking to outsource their projects have higher satisfaction rates when picking their talents from the country.

5. Increased Local Software Demand

The economy of the country has been growing at a steady rate of 6.03%, and it was the same during 2022-2023.

This phenomenon has increased the demand for digitization in both public and private sectors, increasing the IT/ITES requirement in the local market.

With over 4500 software agencies currently present in Bangladesh, more and more businesses can rely on local talents to grow the software agency.

When the local market is strengthened with the power of digital transformation, it’s easier for the local talents of Bangladesh to take up international projects and offer high-quality service.

6. Large-Scale Freelancing Adoption

More and more younger people in Bangladesh are picking up freelancing and other IT-related projects as their main source of income.

With over 600,000 freelancers present with their own unique skill sets, you’re sure to find the right talent for your project regardless of the requirements.

7. Constant Growth of SMEs

Bangladesh occupies a significant place in the top 30 outsourcing destinations, meaning the country is becoming more and more of a preferred outsourcing destination for agencies around the world.

The Government of Bangladesh has provided 100 percent tax exemption to IT and IT-enabled service providers up to 2024 and the benefit could be extended up to 2030.

Hundreds of software agencies from the country are outsourcing various software-related services and professional expertise to more than 30 countries.

With years of expertise in working with clients from highly developed countries and agencies, IT experts in Bangladesh can take on any challenges.

8. Economy-Friendly Yet High-Quality Services

Bangladesh proudly holds the 35th position as a successful digital nation on the Global Location Index.

While Bangladeshi agencies have a lower pricing structure, the overall quality of the price is on par with other Asian countries.

Bangladeshi software agencies offer 30%-40% less price for software products and other relevant services, in terms of both human resources and infrastructure costs.

As shown in the Accelerance Analysis 2021, A software developer from Bangladesh usually charges from $19-$50, whereas other regions are charging an average of $19-$75.

This charge can depend on multiple factors such as

  • Project complexity
  • Experience level of the developer
  • Development time
  • Negotiation

The work ethic of Bangladeshi professionals is very strong, making our country an ideal choice for custom software development.

9. Better Job Readiness With Business Friendly Policies

Due to constant reformation and upgradation of the education system, Bangladesh has seen a drastic improvement in the overall literacy rate to 74.66% in 2023.

Due to early training during the education courses and many NGO-offered educational courses enabling better job readiness, demand for offshore services from the country is increasing as fast as ever.

To make outsourcing more accessible, the Bangladesh Government has shown multiple policy changes to facilitate more outsourcing possibilities.

  • The National Economic Council Executive Committee (ECNEC) has this “Learning and Earning Development Project” and allotted $208,747 for providing outsourcing training.
  • An initiation for preparing 55,000 freelancing professionals at the subdistrict level
  • 4000+ UISC (Union Information Service Centers) – a government program to confirm access to ICT in our rural regions transformed into small outsourcing training centers.
  • Women are urged to pursue freelancing through the “Learning and Earning Program.” The objective is to encourage women to work in or as successful business owners in the BPO (Business Process Outsourcing) industry.
  • Bangladesh Association for Software and Information Services (BASIS) and Bangladesh Computer Council (BCC) are two organizations always trying to develop and expand the outsourcing business.

10. Fastest Growing Economy

The economy of Bangladesh has been predicted to become the 24th largest economy in the world by 2030.

The number of projects outsourced to Bangladesh over the last couple of years has doubled, and Bangladesh has successfully achieved $5 billion in ICT industry revenue.

Choosing The Right Offshore Software Developer Agency In Bangladesh In 5 Easy Steps

  • Step #1: Define Your Project Requirements
  • Step #2: Check Their Portfolio & Expertise
  • Step #3: Check The Client References & Reviews
  • Step #4: Maintain Continuous Communication & Collaboration
  • Step #5: Ensure Their Data Security Measures

Step #1: Define Your Project Requirements

Before you hire a software team in Bangladesh, write down everything about your project. This includes

  • What you want them to do
  • How much it will cost
  • When you need it done

This plan helps you find the right team. Look for a team that can handle your project’s tricky parts and use the right tech tools.

Also, make sure they know about any rules your industry has to follow. A good Bangladeshi software team will work with your plan and follow all the rules.

Step #2: Check Their Portfolio & Expertise

Look at the work of software teams in Bangladesh. See if they’ve done similar projects like yours before.

Inquire if they know the tech tools you need and understand your kind of business. A good Bangladesh software team will show you projects they’ve finished that are like yours.

This helps you know if the agency is the right fit for your project.

Step #3: Check The Client References & Reviews

Before you hire a software team in Bangladesh, ask their old clients about their work.

  • Did they do a good job?
  • Did they communicate well with the client?
  • Did they submit assigned projects on time?

You can find reviews on websites like Clutch, Upwork, and LinkedIn. These reviews tell you what other people think of the Bangladesh software teams.

Also, ask the team for their previous clients you can talk to. Call or email these clients to learn more about how the team operates and collaborates.

Don’t forget to check social media groups about tech work in Bangladesh. Many people there share their thoughts on different software teams. This can help you pick the best team for your project.

Step #4: Maintain Continuous Communication & Collaboration

To make your software project with a Bangladesh team work well, good talking is key. Check how the team talks to you.

Do they use email, video calls, or special apps? Make sure they speak English well, so you understand each other.

Also, see if they use tools to manage the project. These tools help everyone know what to do and when.

A good Bangladesh software team will answer you ASAP and be transparent about everything. They should listen to what you need and fix any problems.

It’s great if they give you one person to talk to, like a project manager. This person helps everything run smoothly and keeps everyone on the same page.

Step #5: Ensure Their Data Security Measures

When you hire a software team in Bangladesh, ask how they keep your ideas and data safe. They should have rules to protect your work, like your special ideas (called intellectual property) and private info. Ask if they follow the proper international regulations for safekeeping IP data.

Also, check how they store your data. Do they have backups in case something goes wrong? A good Bangladesh software team will have strong safety steps to keep your secret info safe while they work.

They might also ask you to sign a special paper called an NDA. This paper says they won’t share your ideas with anyone else.

A Few Challenges With Choosing Bangladesh As Your Outsourcing Destination

1. Limiter Awareness Of The International Market

Bangladesh’s tech companies are growing fast, but they’re still relatively new compared to others in the global market.

Some businesses might worry that companies in Bangladesh aren’t as well-known as those in other countries that have been doing tech work for longer.

This could make it harder for Bangladesh to get more tech jobs from around the world, as people are usually eager to work with companies with better recognition, which clients see as a sign of trustworthiness.

2. Quality Assurance Within Deadline

When you hire a software company in Bangladesh, you want to make sure they can hit the deadlines. But of course, this means you need to take your time to choose the right agency.

To do so, look for a company with a list of happy clientele and unique projects. Check their website for stories about their work and what their clients say.

Also, check how long they’ve been in business, their team members, and their abilities. This shows the level of strength and skill of their teams.

Not everyone possesses enough expertise to deal with international-level requirements, and not choosing the right agency can cause a lack of proper quality assurance and project submission within the desired deadline.

Another great way to keep your project on track, set clear goals and steps. This way, you’ll know how they’re doing and if they’re meeting your needs.

Good teamwork and constant collaboration helps get the job done right and on time.

3. Challenges With Intellectual Property

When an agency hires a software development team in Bangladesh, they want to keep their ideas and intellectual properties safe. This is called IP (Intellectual Property)  protection, in short. The agencies in Bangladesh are improving data safety and intellectual property protection.

But some companies still worry about it, and that’s completely reasonable. While there are agencies that are constantly updating their compliance with international regulations, not all agencies are on par with each other.

Choosing an agency that is up to date with the right international regulations can help you with IP protection with the help of complete compliance.

To ensure additional safety, agencies should create strong agreements that both parties sign under mutual consent.

To give you a better picture of how Bangladesh can be the next best focus point for offshore outsourcing, let’s compare Bangladesh to the most lucrative outsourcing location, Ukraine.

Time ZoneGMT +6GMT +2
Current Size of Talent Pool650,000200,000
English ProficiencyLow (#63 according to EF EPI 2020)Moderate (#44 according to EF EPI 2020)
Average Monthly RateBDT 25,100 ($228)$2000, based on local job market research
Education LevelSatisfactoryGood
Talent AvailabilityHigh availability for junior experts, and low for senior expertsHigh for both junior and senior experts
Natural Hazard-Related RisksHighLow-none
Data SafetyModerate (#65 according to global NCSI)High (#25 according to global NCSI)
Quality of DeliverablesHigh quality for a cheaper costHigh quality for an affordable cost
Ease of Business TransactionsHard (#168)Relatively easy (#64)


Can I Expect Innovative Solutions and Out-of-the-box Thinking From Bangladeshi Developers?

The tech landscape in Bangladesh encourages innovation and creative problem-solving.

How Do Bangladeshi Companies Handle Unexpected Changes or Project Pivots?

Agile methodologies enable flexibility, allowing swift adaptation to changing project requirements, and most Bangladeshi software agencies follow the agile methodology

Can I Expect Support and Maintenance Services Post-development From Bangladeshi Firms?

Yes, many firms offer comprehensive support and maintenance packages post-project completion.

How Transparent Are Bangladeshi Software Development Firms Regarding Project Progress?

Transparency is highly valued, and often facilitated through regular progress reports and updates within the agency, as well as frequent communication with outside clients.

Are There Any Specific Industries Where Bangladesh Excels in Software Development?

While adaptable across sectors, Bangladesh has shown prowess in E-commerce, healthcare, and FinTech.


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