Karachi, Islamabad & Lahore to have IT Park by 2008-09: PSEB

SHAMIM AHMED RIZVI, Bureau Chief, Islamabad
Dec 25 - 31, 2006

Information Technology industry in Pakistan has emerged as the fastest growing sector during the last two years, mainly supported by phenomenal jump in call center operations. The country's software exports crossed $ 70 million during 2005-06 (against $ 48 million in 2004-05) as Western firms started turning more and more to Pakistan for IT enabled services to cut cost and raise profits. The target for the current financial year (2006-07) has been set at $ 108 million. According to the officials of the Pakistan Software Export Board (PSEB) the target for the current year may be surpassed.

This correspondent met some senior officials of PSEB as the dynamic Managing Director Yusuf Hussain was out of the country. Officials told PAGE that three IT Parks will be setup in the country at Karachi, Islamabad & Lahore by 2008-09. Sites have already been selected and work will start soon. The government has provided Rs.250 million for financing the skill-enhanced programme for IT professionals and increase capability of the available human resource in the country.

Talking on behalf of MD PSEB, a senior official told PAGE that IT industry -characterized by about 90,000 professionals, major ongoing IT projects within government and the private sector to the tune of hundreds of millions of US dollars, and world class software product and services - companies bear testimony to the vibrancy of the IT and IT enabled services sector in Pakistan. The convergence of communications, computing and entertainment has resulted in the blurring of boundaries between disciplines and IT companies now come in all shapes and sizes. "IT has indeed been taken out of the closet and has been mainstreamed into every aspect of industrial and economic activity within the country," he observed.

The business community in the country has finally understood the value that automation can add to their commercial concerns, by driving down costs, marketing and providing quality services to their customers. The banking sector in particular has dramatically increased its dependence on the use of IT, as is evident by the growth in the number of branches that are connected online. Likewise, the number of Automated Teller Machines (ATMs) and the use of automated cheque clearing and other back end systems within the banking community has increased. Customer relationship management system typified by Siebel have been deployed, and online banking is de rigueur. In the industrial sector, the use of Enterprise Resource Planning software such as SAP and Oracle has become commonplace. Companies such as ICI, Caltex, PSO, Packages, KSB pumps, Pakistan Tabacco, Honda Atlas and tens of others have deployed high-end ERP solutions.

The textile sector is investing heavily into specialized software and IT solutions to reduce costs and improve quality. The government has not lagged behind, with the more mundane applications such as office automation and budgeting currently being developed, and SAP implantation with the AGPR nearly completed. CBR has massive IT projects in the pipeline, starting with the customs and taxation systems in 2005.

Complex logistics systems for the armed forces, sophisticated intelligence gathering and sifting systems for the intelligence agencies, guidance and control systems for missiles, simulators for nuclear plants, avionics software for the JF-17 fighter aircraft, and computer aided design and manufacturing systems for submarines are examples from the defence sector. The airline industry is another enthusiastic user of IT, with Air Blue being totally automated, there being no paper ticket whatsoever. DHL hand held devices to interact with their base stations and packages are being tracked in real time. Stocks are trader online, and the National Commodities Exchange set to start operations in September 2006 is one of the most advanced implementations of its kind anywhere. The electronic media has not been left behind, and state-of-the-art IT solutions are being used by these companies to record, produce, edit, transmit and otherwise manage their entire operations.

Officials at the Pakistan Software Export Board, a federal body set up to boost software exports, said the project emerged after recent studies and surveys, which indicated shortage of specialized manpower in the Pakistani IT industry. "Also the market size, business volume and uncertainty in the global marketplace hinder local companies from making substantial investments in human resource development directly or indirectly. However, it is a proven fact that the Pakistani IT industry has competitive advantage in terms of availability of cheap skilled manpower over other regional countries to attract foreign investment." He said the project encompasses two types of trainings - the first comprising corporate training for local IT companies within specialized areas to remain competitive with the international market players. The second is general training in the field of project management, network and security systems and business modeling. These trainings would serve as a major incentive for the IT companies that require financial assistance in training their technical staff and ultimately specialize in a specific technology.

During 2006 Pakistan has achieved the target of 100 ISO certified IT companies and 4 CMMI-rated companies, achieving a major benchmark, to attract more IT business from developed economies. According to a Pakistan Software Export Board (PSEB) press release the milestone was reached under the PSEB programme Standardization of Pakistani IT Industry which was launched in 2003 with a budget of over Rs.200 million.

The main aim of the programme was to assist 100 companies in achieving ISO certification, 20 companies in achieving CMMI level 2 or above ratings and 5 call centers in achieving COPC certification. It may be mentioned that India with a very large and mature IT industry has currently 138 companies that are ISO certified.

CMMI is the framework for process maturity developed by Carnegie Melon University. It is divided into 5 levels with 5 being the highest while COPC caters to the process maturity in call centers. This practice has greatly improved the quality of products being developed by these companies in general and the capacity of individuals implementing SDLC-related processes with greater maturity in particular.

The programme has also helped create about 350 new mid-management level job opportunities in the IT industry. For further improvement in standards, 10 individuals are currently being trained from the academia and various consultancy companies as SCAMPI Appraisers/CMMI auditors.

Two Pakistanis have managed to reach the third level of the training so far, the highest level; with one topping his batch at the second level in the USA, and the other topping his batch in Germany, and also breaking the world SEI record for the second level. The cost of achieving any level of CMMI for Pakistani companies is also expected to reduce to 20 per cent of the original cost after the training of these individuals is completed.

"These (developments) give us hope that Pakistan will emerge as a destination of choice for global IT outsourcing due to the credibility of these companies, resulting in a greater influx of business, and the creation of new job opportunities, acting chief of PSEB said.

How rapidly the IT industry is expanding in Pakistan and what is its potential can be judged by a study conducted by PSEB recently under the direct supervision of its MD Mr. Yusuf Hussain. According to the study, the IT and IT enabled Services (ITeS) marketplace offers lucrative opportunities for developing countries to join the ranks of the developed world. The scale and pace of growth in this sector is faster than in any other industry, and a number of developing countries are attempting to emulate the success enjoyed by countries such as China, Thailand and India. The Government of Pakistan has been proactively developing the IT sector for the last few years. A few of the incentives offered include tax exemption till 2016, establishment of IT Parks with low rent, foreign ownership of equity invested in IT and 100% repatriation of profit allowed to IT companies.

Pakistan's IT industry has been rising steadily for the last three years. A marked increase in software export figures are an indication of this booming industry's potential.


Total number of IT companies working in Pakistan


Number of substantial IT companies

458 (active PSEB members)
162 Karachi
139 Islamabad
137 Lahore
20 Others

Number of ISO certified companies

100 companies

Number of CMM assessed companies

One CMM Level 5 company, One
CMM Level 4, two CMMI Level 3, One
CMMI Level 2

Total number of foreign IT and telecommunication companies working in Pakistan


Total industry size (according to a preliminary

US $ 2 billion (WTO prescribed

study undertaken by PSEB)


IT and IT-enabled Services export in the fiscal year 2005-06

US $ 72.21 million

Percent growth in exports over the last one year


Export targets for the current fiscal year 2005-06

US |$ 108 million

Number of IT graduates produced per year

Approximately 20,000

Number of universities offering IT/CS programs


Number of IT professionals engaged in export orientedactivities (software development/call centers, etc.)

More than 10,000

Total number of IT professionals employed in Pakistan


Total IT spending in the fiscal year 2005-06

US $ 1.4 billion

Total amount of space utilized in STPs

630,000 sq ft








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