28 November, 2009 - In a bid to revive Bhutan’s failing business processes outsourcing (BPO) companies, a recent cabinet directive has instructed the labour ministry to boost its support for the industry.

Despite the government identifying Bhutan as a country with potential to compete in the information technology enabled service (ITES), the country’s four business processes outsourcing (BPO) companies are still ailing, despite the labour ministry investing around Nu 8m in training more than 300 agents for the BPOs since 2008. Figures for 2007 were not available.

Two of the BPOs, TST systems pvt ltd and Bhutan business solutions (BBS), are on the verge of shutting down.

TST, established in 2007, is currently facing a loss of nearly Nu 20m, said one of its proprietors, Tshering Wangchuk. “We’re not doing well at all,” he added.

But the company will continue operating for now, said Tshering, after being notified of the government’s effort to revive the BPO industry.

Although seeing its first profit of Nu 10,000 in October, BBS, established in 2007, is also contemplating shutting down after not being able to find space to relocate from its present premises. The company has also been operating at a loss since its creation.

The other two BPOs, Bhutan centre for excellence (BCE), and recently established computer management institute (CMI), have also been operating in the red since their establishments in 2007 and 2008 respectively. But proprietors for both companies said they would not be closing their doors despite their losses, saying that the future of the BPO industry in Bhutan would be profitable.

TST’s Tshering Wangchuk said that one of the problems BPOs in Bhutan faced is a lack of direct links to business outsourcing countries like the USA and UK. He pointed out that, initially, the government should publicise Bhutan in these countries as a BPO source, as currently local BPOs had to rely on “middle men” in India, decreasing the amount of business the BPOs could obtain.

But even with direct links established, other problems could still hinder the local BPO industry. CMI director Taliman Chhetri said that connectivity is a major obstacle, pointing out that calls frequently could not be completed because of line disturbances. He said the government needed to provide the best possible connectivity if the BPO industry is to survive in Bhutan. CMI had to shut down after its establishment in December 2008 until July this year because of bad connectivity.

The quality of persons supplied by the labour ministry is low, said the CMI director, referring to English standards. “I think the education sector needs to focus on improving English grammar,” he said, explaining that articulate English is essential in the BPO industry.

Similarly, BBS proprietor, Damchae Dem, said the training period needed to be extended to 18 months instead of six. “Experience shows us that the gestation period of Bhutanese is longer,” she said. Damchae Dem said the labour ministry did not accept the proposal to lengthen the training period. The labour ministry funds the training period of a student at Nu 4,500/month, after which they are employed by the BPOs.

BCI’s Singay Jamtsho said that another obstacle BPOs in Bhutan faced is a lack of awareness of the facts and advantages of being employed in such an industry. The BCI co-founder said the failing of the country’s biggest BPO project, Drukonnet, should not be taken as a precedent of the industry. He added that call centres were only a small segment of the BPO industry. In December 2008, 40 agents of Drukonnet resigned after the company did not pay them for six months. The company owed these agents between Nu 26,000-Nu 40,000.

Singay Jamtsho said that, once the youth realise how successful the BPO industry could be, Bhutan’s BPOs would succeed. He pointed out India’s example where he said the country’s middle class had blossomed because of the BPO industry.

The labour ministry will be pumping Nu 8.4m into the BPO industry between 2009-2010. It will also be using most of a Nu 36m World Bank (WB) generic skill development programme fund to “put the industry back on its feet,” according to labour officials. As part of the WB project, more than 2000 graduates will be trained in Bhutanese BPOs by 2011, according to the labour secretary, Dasho (Dr) Sonam Tenzin. This force is then expected to be employed by Bhutanese and international BPOs, either in Bhutan’s IT park, Thimphu Techpark, or abroad.

The labour secretary added that other BPOs locally set up would also be able to avail of the ministry’s support after an assessment.