Trigger 1.

0 Case 01

Strategic Issues for Accenture Bangladesh:

A Developing Country Perspective

Abstract
This case study was inspected to grasp the facets of information technology (IT) industry in Bangladesh by taking Accenture, a multi-
national management consulting, technology services and outsourcing company as a subject of study. The purpose was to determine
the importance of technology and IT for economic agents, namely, countries, companies and customers. Rapid growth and increase
in demand for internet technology in all layer of activities stimulated country-wide development in IT infrastructure. The concept of
a digitalized Bangladesh was dedicated to prioritize the IT sector in order to precipitate concurrent business growth and to facilitate
both domestic and international relationship with concerned institutions. The ideology was reflected on other industries as these
industries began to rely on a great deal of IT support to implement their operational activities. In such an environment, the Accenture
Bangladesh case discussed its long-term plans for expanding its business horizon in Bangladesh.

Key Words
Bangladesh, Accenture, Information and Communication Technology, Internet

Accenture could face various regional or local needs that transforming public service delivery and democratizing
would not be neglected. While the pursuit of ‘one global innovation. With 10 per cent increased in high speed inter-
firm’ by Accenture was admirable and probably necessary, net connections, economic growth had been increased by
a one-size-fits-all approach without allowance or encour- 1.3 per cent (World Bank, 2014). While the challenges
agement for local adjustments was unlikely to produce the faced by each developing country was largely determined
desired results. by its local, cultural, political and economic conditions;
Paik and Choi (2005, p. 84). some favourable factors were also there to aid in imple-
The Academy of Management Executive menting successful information technology (IT) strategies
(Ahmed et al., 2014). Internet penetration rates in the
developing countries continued to lag far behind than that
Introduction of the developed ones. Over the past decade, developing
Internet was incepted in Bangladesh in 1996 and since countries had witnessed rapid but uneven growth in ICTs’
then it has been widely used to serve multiple purposes access and use (World Bank, 2011). In corporate arena, the
(Ahmed et al., 2015). New information and communi- dominance of ICT could be defined by its impact on cost
cation technologies (ICT), in particular high-speed inter- efficiency and productivity. ICT was critical to any com-
net, were changing the way companies did business, pany’s growth because it incorporated standardization,
scalability and minimalism in the business model (Ahmed of young entrepreneurs made the sector very distinctive
et al., 2014). Companies were using specific information from others and these young entrepreneurs were mainly
technologies to manage human resources, office manage- tech savvy young local graduates along with many home
ment and vehicle management as well as to support their returning foreign graduates. In confronting both local and
regular hardware and software requirements. From 2008 to global economic competition, these young IT entrepreneurs
2013, over a 40 per cent growth rate was achieved in soft- were invigorated the whole sector by conducting excep-
ware and information technology-enabled services (ITES) tional IT projects to put up successful and sustainable
industries resulting from high demand for IT automation IT businesses. The telecom sector, along with financial
in domestic industries and improved IT infrastructure in institutions, pharmaceutical companies, and RMGs had
Bangladesh. ICT brought about amelioration on speed, dili- all initiated large scale business process automation pro-
gence, versatility and accuracy in business processes that jects to broaden the scope of software and ITES companies
ultimately uplifted the overall performance of the company. (Shinkai & Hossain, 2011). Local availability of required
Due to the abundance of talented workforce and relatively qualified IT skills (improved proficiency in English
low wage rate, South Asia became one of the lucrative and language and analytical ability) at a relatively low-cost-
cost-effective choices for IT outsourcing. However, most of enabled Bangladesh to become one of the alluring desti-
the countries failed to capitalize the benefits except India nations for outsourcing. In addition, investment friendly
which accounted for half of global IT-business process out- policies, e-governance projects and rapid development
sourcing (BPO) services (amounts to revenue of USD 59 of internet technologies were initiated by Bangladesh
billion in 2011) (The Economic Times, 24 August 2011). government to provide added incentives in this arena
to deal with increased demand for IT services (Access
to Information Programme, 2011; Financial Express,
Information Technology in Bangladesh: 10 January 2009; Karim et al., 2011). As a result, IT
An Overview industry in Bangladesh had exhibited tremendous perfor-
Since 1980s, Bangladesh had commenced using computers mance in terms of employment creation, rapid growth and
as a research and data manipulation tool. Thus, emergence contribution to country’s GDP.
of IT in Bangladesh was brought into the ground. A series of Bangladesh Association of Software and Information
steps were taken in 1997 in order to gear up the IT sector in Services (BASIS)1 and Bangladesh Computer Samity
motion by emphasizing exports of software and IT services (BCS)2 were two industry bodies representing the IT sector
(Ahmed et al., 2015, 2016, forthcoming). The industry had of Bangladesh. According to BASIS (2015) there were 898
a worth of USD 400 million and employed approximately registered software and ITES companies (in addition to
70,000 professionals (Ahmed, 2014). The IT sector of many unregistered small and home-based software and IT
Bangladesh was backed up by an unprecedented progres- ventures) employing over 20,000 professionals. According
sive policy where government allowed total duty-and- to another survey on 300 BASIS companies, almost 70
tax-free import of all computer hardware and software per cent of the companies were engaged in development
which encouraged the usage and applicability of computers and maintenance of software and almost 50 per cent of
and related activities; hence, promoted the enlargement of them were also providing various IT-enabled services such
IT industry (The Daily Star, 6 January 2010; Wordpress, as data/form processing, graphic/web design and content
2013). The local market had been the focus of some 110 management. Wider internet access, better connectivity and
IT companies competing to grab a chunk (Ahmed et al., introduction of online payment method worked like cata-
2015, 2016, forthcoming). However, the exports by this lysts to ensure an equal opportunity platform for all players.
sector amounted to be around of USD 100 (annualized) Bangladesh Telecommunication Regulatory Commission
during the period 2012–2013 (Ahmed, 2014). This opti- (BTRC, 2015) points out that, at present, around 95 per cent
mism could be secured by the presence of favourable factors (51.982 million) use Internet through mobile network and
such as trend of automation in local companies, large 5 per cent (2.076 million) use broadband Internet. Socio-
demand in global offshore market and outsourcing industry demographic changes were inevitable when growing number
etc. (The Daily Star, 6 January 2010). This sector had long of internet users pushed the IT industry to the next level.
left the stance of being a hardware vendor industry and Local market was considered to be the major part of
renewed itself by revolving around three major activities— business for the software and IT service (ITES) industry.
application services, engineering services and business Approximately 63 per cent of BASIS member companies
process services. About 8 per cent companies were estab- were focused only in local market that had demonstrated
lished through joint-venture with overseas companies or as a healthy growth of around 25 per cent. While ITES com-
an offshore development centre, which were funded fully panies were accounted for 56 per cent of the total revenue
by foreign investment. Availability of qualified and experi- generated in the industry, rests were provoked by soft-
enced young graduates from various academic disciplines ware companies (BASIS, 2014). As mentioned before,
at a low wage rate made the IT sector very prospective and there were 898 existing software and ITES companies in
lucrative to entrepreneurs. The existence of high numbers Bangladesh; however, only 20 per cent of them employed
their devotion in exporting products and services to over Accenture Bangladesh: Management
30 countries. The industry experienced a 28.14 per cent Objectives at a Glance
growth in export in the year 2011, creating more optimism
for the companies operating in the sector (BASIS, 2014). Since its inception, Accenture Bangladesh has been strug-
Although the US market, notably North America was the gling to develop its value propositions. The growth of IT-
major importer of IT products from Bangladesh, other dependent businesses (10 new financial institutions every
countries such as UK, Australia, Japan, India, Netherlands year), de-pricing of internet cost and penetration of
and UAE were gradually coming in the picture (Shinkai & internet connectivity forced the company to undertake
Hossain, 2011). development initiatives through rigorous marketing of IT
solutions. It organized its services and people mainly in
three cross-functional teams. Accenture’s client engage-
Accenture Bangladesh: ment team typically consisted of a combination of industry
The Business in Brief3 experts, capability specialists and professionals with local
Accenture and GPIT came up with an agreement on 27 market knowledge. In 2015, they focused on an operational
June 2013 to sell the stock for USD 10 millions in order to strategy consisting of five major trends:
form Accenture Bangladesh (previously operating as GPIT)
as a new venture. It is one of the leading organizations in • ‘The Internet of Me’—a more personalized world;
the world providing management consulting, technology • ‘Outcome economy’ where products became mean-
and outsourcing services. They have offices and operations ingful from the results they produce;
in more than 200 cities in 56 countries with approximately • ‘Platform revolution’: Platform-based companies are
319,000 employees. It earned net revenues of USD 30 capturing more of the digital economy’s opportunities;
billion for fiscal year 2014 (Accenture, 2015). Accenture’s • ‘Intelligence enterprise’ with big data software intel-
four growth platforms: Accenture Strategy, Accenture ligence will make it easier for machines to make
Digital, Accenture Technology and Accenture Operations better informed decisions;
were the innovation engines through which it built world- • ‘Workforce re-imagined’: machines and humans
class skills and capabilities. It also developed social and are amplified to do more conjointly (Shamsuddoha,
knowledge capital by harnessing and managing key assets 2015, p. 3).
central to the development of integrated services and solu-
tions for its clients. Accenture promised to provide end-
to-end solutions for banking and non-banking financial The Critical Issues: Changing Times
institutions, FMCG companies, pharmaceuticals and other
telecom companies. It started to recruit a team of talented The idea of GPIT was conceived by Oddvar Hesjedal, the
individuals internally and externally. The talent pool of CEO of GP during 2008–2010. He envisioned establish-
Accenture was solely dedicated to creativity, service and ing an outsourcing hub in Bangladesh. With increasing
efficiency. They were devoted to deliver client’s noticeable labour costs in India, and the decreasing cost of capital
transformations in their operational efficiency and strived in Bangladesh, the country was on the verge of becoming
to provide end-to-end IT solutions in unsurpassed value a popular outsourcing destination. The company was initi-
and quantity (GPIT, 2014). Accenture’s vision, as passed on ated to capture international contracts and acted as a system
by GPIT, was to ‘become the most reliable Bangladeshi integrator for local industry. Operating at local market
IT company providing best value solutions both locally and was a necessity for the company’s initial stages of survival.
globally’ and their mission was to ‘Help transform business Accenture was working to realize the vision of being
through best IT solutions to reach new apex in productivity leader in the local market for enterprise grade IT software
and efficiency’ (GPIT, 2014). These goals gradually shaped and was also supervising to manage solutions for quality
their strategy to be an outsourcing agent for international mobile software in terms of design, maintenance and train-
firms and system integrator for both local and global busi- ing. It also had selective partnerships with international
nesses. Before being acquired by Accenture, GPIT Ltd. had IT giants such as Huawei, Oracle, Dell, Cisco, Hewlett-
been modifying (starting from 2010, based on situational Packard and Microsoft to insert the international standard
factors such as the introduction of 3G communications in product and service offerings for all of its deliverables. In
2013) its strategic concerns to adapt with the rapid changes order to sustain its performance in Bangladesh, Accenture
in the market. Initially, it targeted Grameenphone (GP)4 had to deal with the following critical factors.
as its only gigantic client to safeguard financial security.
However, it eventually realized to expand its customer base
internationally through constructing a rigorous business
Frequent Changes in Management
strategy that assembled its strengths, opportunities and Accenture Bangladesh including its previous identity
organization-wide commitment (all of which can be consid- had relatively decent operation in Bangladesh with 400
ered significant competitive advantages for any IT firm). employees during 2010–2012; it had already witnessed
many changes regarding quality and quantity of workforce for Accenture to expand into international markets with
size. Within that short span of time, the company had the image they had. Since Accenture was the leader in
experienced three CEO’s, two COO’s and three head of their area, it would become easier for them to attract more
marketing and numerous other top- and mid-level changes. clients from different parts of the world. Moreover, taking
Therefore, every time a CEO or a COO had been changed, control of the Bangladeshi market was more convincingly
strategic priority and cultural aspects were also altered done by the management team inherited from GPIT.
accordingly. In addition, it caused a very rapid conversion The combination of local knowledge, international reco-
of existing management team as well as subordinates, gnition of Accenture Bangladesh and the availability of
pushed the company in creating job insecurity and caused more resources were promising better performance for
delay in applied operational activities. As a result, stability Accenture in future.
of the company was also hampered.
Lack of Structured Marketing Efforts
Living Under the Shadow of Accenture Accenture Bangladesh including its previous identity faced
the challenges of delivering structured message of its
GPIT had confronted an identity problem from the very
vision through proper promotional campaigns. Moreover,
beginning when it was inaugurated. It was mostly per-
it lacked a planned marketing team while operating in the
ceived as an IT division of GP, rather than regarded as a
fastest growing and most competitive arena in Bangladesh.
separate entity which was a sister concern of GP. It was
Accenture only did its marketing through IT seminars,
so because of the age, size, scope and influence of GP’s
fairs and sponsorship of some local software expos, which
business activities in local market. However, the issue
could barely highlight its full potentiality. Merely a primal
was resolved when Accenture acquired the key control
website was used to accomplish marketing communi-
of ownership as it already had earned reputation of becom-
cation, well evidenced for inadequate marketing efforts
ing global leader in its industry. So, Accenture could be
until the end of 2011. The marketing budget and efforts
able to come out from the shadow of GP to articulate its
had begun to increase significantly since 2012, and the
fortune with own image.
company was being able to unify finally in terms of long-
Accenture integrated its business operation with tech- term strategic objectives. The company started investing in
nology in order to form a technology-enabled strategy. market research, and focusing its efforts on becoming more
Its business strategy, technology strategy and operation attractive in local and global markets through continuous
strategy revolved around its operational model to drive up advertising and awareness campaigns.
value. A matrix structure form was found as operational
model of Accenture, where the first axis was dedicated to
operating groups, or industries of its clients. Broadly, the Accenture Bangladesh:
five operating groups were: IT Challenges and Beyond
According to Jon Fredrik Baksaas,5 ‘Accenture has the
• Communications, media and technology competence to offer modern services and we have our own
• Financial services network and market to provide digital services jointly.
• Products By this, we can also find new investment avenues in the
• Resources ICT and telecom sectors’ (The Daily Star, 13 May 2015).
• Health and public services In Bangladesh, different strategies had been availed
for successful development and implementation of IT.
The five operating groups further comprised 19 industry While internet penetration rates were rising with growing
subgroups. The accountabilities of these subgroups were number of users in the last decade (Ahmed et al., 2014),
to bring about industry evolution through familiariz- Bangladesh lagged behind in facing dreadful challenges
ing new applicable technologies and focusing on other in the IT sector. Absence of proper operational practices
business issues. and guidelines for data standardization and security made
the overall procedure lengthy and difficult. The major
The International Market: With a obstacles in its path of creating digital society were full
New Entrant utilization of capacity and scope at a time of upgrading
ICT infrastructure. Moreover, ICT facilities were asym-
Accenture had established itself as a leader in global metrically distributed where the large segment (rural area)
marketplace. It was well known for its offerings and capi- of Bangladesh lacked access to basic technologies (Ahmed
talizing on evolving management trends and technologies et al., 2014) in comparison to the urban area.
to benefit its clients. The company wide system integration Raihan Shamsi, CEO of Accenture Bangladesh stated
and business integration led the deployment of enterprise that ‘the target for USD 1 billion set by the IT industry can
resource planning (ERP), customer relationship manage- be achieved if the following three issues are address such
ment (CRM) and electronic services. It was much easier as human resources, infrastructure development and policy
support’ (The Daily Star, 4 November 2014). The three 2002, respectively, and also established an ICT incubator
issues would be considered as challenges for Accenture along with an e-governance programme under the ICT
Bangladesh and hereby precisely discussed below. Task Force in 2003. The IT sector was declared a key prior-
ity by the previous government (2007–2013) since it fits
their ongoing campaign to create a ‘Digital Bangladesh’
Human Resources by 2021 (Ahmed, 2014). According to Nyenrode Business
Focusing on developing human resource in the field of Universiteit (2014) report, in order to further develop the
IT is one of the most important issues in management ICT sector and realize the export potential of the sector,
(Tohidi, 2011). the government recently took several noteworthy initia-
tives such as
Infrastructure Development • All software and ICT-based companies, including
According to Techopedia (2015), IT infrastructure refers to those under foreign ownership exempt from income
the composite hardware, software, network resources and tax until 2015.
services required for operating and managing IT environ- • Both a government sponsored long-term equity fund
ment of an enterprise. It allows an enterprise to deliver and short-term working capital financing are offered
IT solutions and services to its employees, partners and to ICT companies.
customers. Generally, it is internal to an organization and • A special hi-technology and software technology
deployed within owned facilities. It can be used for internal park is being built by the GoB to facilitate the devel-
business operations, developing customer IT needs and opment of the entire infrastructure needed by compa-
business solutions. Typically, a standard IT infrastructure nies that outsource activities to them. Furthermore, the
consists of the following components: government has established the Bangladesh Hi-Tech
Park Authority to operate the Hi-Tech Park.
• Hardware includes servers, computers, data centres,
Besides, International Trade Support Institutions (ITSI)
switches, hubs and routers.
plays an important role in creating business opportu-
• Software consists of ERP, CRM and productivity
nities for Bangladeshi ICT and ITES companies. Over the
applications.
years several initiatives have contributed to the growth
• Human users such as network administrators, devel-
of the ICT sector in Bangladesh (Nyenrode Business
opers, designers and generic end users with access to
Universiteit, 2014).
any IT appliance and service. It is also part of an IT
However, there are some issues which must be addressed
infrastructure, specifically with the advent of user-
before establishing software companies and new initiatives
centric IT service development.
like Accenture Bangladesh can flourish in this industry.
• Network refers to internet connectivity, network ena-
Poor infrastructure including frequent power crisis and
blement, firewall and security (Techopedia, 2015).
slow and unreliable Internet connections are the most
immediate problems for the software industry of Bangladesh
Over the last decade, Bangladesh has promoted the idea
(Ahmed et al., 2016, forthcoming). Similar to their counter-
of an ICT. It made significant progress in the telecommuni-
parts, Accenture Bangladesh also comprehends the neces-
cation sector except ICT. sity of ‘an uninterrupted power supply and a second
connection with high bandwidth’ (The Daily Star, 9 June
Policy Support 2011). Currently, Bangladesh is connected to a submarine
cable network that provides an Internet bandwidth of 24
According to Jon Fredrik Baksaas, ‘a predictable and gigabytes, but more speed and an alternative connection are
consistent regulatory framework is needed for sustain- required in order to attract more overseas clients (Ahmed
able growth’ (The Daily Star, 13 May 2015). In 2009, the et al., 2016, forthcoming). Furthermore, there were quite a
National ICT Policy was broadly reformulated across areas few barriers for any software company in Bangladesh but
including education, science and technology, infrastruc- they were no means insuperable. Affordable IT infrastruc-
tural development, employment generation, private sector ture, uninterrupted power system and high speed Internet
development, agriculture, health and nutrition (Nyenrode connectivity were central to the development of IT sector.
Business Universiteit, 2014). The government introduced At the same time, IT businesses most often could not secure
an e-governance vision and promotion programme for the their financial access in local financial institutions due to
ICT sector. This vision should support the aim of deliver- the intangible nature of ICT products. It was arduous for
ing significant gains in terms of productivity and employ- the Bank to measure the value of intellectual property
ment for both domestic as well as foreign investors. The accurately in absence of a framework for the intellectual
Government of Bangladesh (GoB) amended copyright property copyright. Moreover, there were few consequen-
laws for software and other intellectual properties in 2000. tial gap between the existing education system and the
It introduced ICT Task Force and ICT policy in 2001 and industry practices. Therefore, greater industry collaboration
 Bangladesh. BASIS started its journey with only 17 charter
members and currently its members about 900. Members of
was needed to bridge this gap (Rahman, 2015). A
BASIS account for the lion share of the total software and IT
serious communication gap was evident between
services revenue of Bangladesh.
government representatives and the ICT sector as
government officials had deficient knowledge on
fundamentals of informa- tion technology.

The Future of Accenture Bangladesh

The new management of Accenture Bangladesh was
com- posed of former GP and GPIT employees, foreign
graduates and local IT experts. Accenture’s first step
towards the future began with an analysis of current
growth barriers. Those barriers were included global
competitors, sales cycles, investment and risk
averseness for long-term growth, narrow casting
international markets, grey prac- tices in local markets
and other IT firms and venture capital investors. As far
as internal factors were involved, the company set out
to investigate its shortcomings in terms of
bureaucracy, lack of efficiency in product design, pre-
sales, pricing and processes and lack of experience
in the BPO industry.
The vision for the future was precise and clear in
deter- mining each and every tier of the company. It
engaged in setting key performance indicators (KPIs)
that would focus on effective stakeholder management
(strategic client, partner and customer) by adopting
very specific and effi- cient operating strategy. The
main strategic step was geared towards positioning
Accenture in a way that would identify its core
competitive advantages through specialized prod-
ucts/solutions and service excellence and expertise,
not on price. Integration of departments was attained
by asking department heads to take ownership of all
the projects. It enabled all teams to work
coordinately in completing commercial target. The
company was also focusing on relatively less
developed international markets such as Nepal and
Bhutan, and offered its services as an original
equipment manufacturer (OEM) vendor to foreign
clients.
The new strategy was appeared to be paying off.
As a result, the company had managed to establish
itself at the forefront of the IT industry in Bangladesh.
It served clients in over 15 countries and had
partnership with the local government towards
developing the IT infrastruc- ture in Bangladesh.
Accenture also inaugurated training and employee
exchange programmes with many fortune 500
companies worldwide to facilitate knowledge transfer
and acquisition.

Notes
1. Bangladesh Association of Software and Information
Services (BASIS) is the national trade body for software
and ITES industry of Bangladesh. It was established in
1997, the association has been working with a vision of
developing vibrant software and IT service industry in
2. Bangladesh Computer Samity (BCS) is the national
associa- tion of the ICT companies in Bangladesh. BCS
was established in 1987 with 11 members. The ICT
industries of Bangladesh comprises of distributors,
dealers, resellers of computer and allied products, locally
assembled computer vendors, soft- ware developers and
exporters, internet service providers, ICT-based
educational institutions and training houses, ICT-
embedded services providers etc. The total number of
mem- bers stand 1,262 at present.
3. Accenture PLC is a multinational management
consulting services company. It is the world’s largest
consulting firm as measured by revenues and is a
Fortune Global 500 com- pany. With its vast portfolio,
Accenture PLC ventured on to Bangladesh as a world
class consulting firm in 2013. During this time, the
company had acquired 51 per cent of the shares of
Grameenphone’s IT (GPIT) wing enhancing the market
by tapping a very robust pool of skills and capabilities in
the IT sector of Bangladesh. Currently, it is operating as a
private company under the name ‘Accenture Bangladesh’
which is reg- istered in ‘the Registrar of Joint Stock
Companies and Firms, Bangladesh’ as ‘Accenture
Communications Infrastructure Solutions Ltd.’
4. Grameenphone (GP) the leading telecommunications
operator of Bangladesh is part of Telenor Group which
has presence in 13 markets across Europe and Asia. GP
started its journey with the Village Phone program: a
pioneering initiative to empower rural women of
Bangladesh. The name Grameenphone trans- lates to
‘Rural phone’. Starting its operations on 26 March 1997,
the Independence Day of Bangladesh, GP was the first
operator to introduce GSM technology in this country.
GP pioneered the then breakthrough initiative of mobile-
to-mobile telephony and became the first operator to
cover 99 per cent of the Bangladeshi people with
network.
5. President and chief executive officer (CEO) of Telenor,
the majority shareholder of Grameenphone.