Information technology (IT), which has evolved from the merger of computers, telecommunications and office automation technologies, is one of the most rapidly growing industries in the world. In Bangladesh, IT use is still in a backward stage in terms of information generation, utilization and applications. A dependable information system has not been developed for the management and operation of the government machinery and large volume of data transactions in the public/private sector organizations. There is a lack of locally and externally generated information needed for the efficient performance of the government, production, trading, service, education, scientific research and other activities of the society. This case study of the IT scenario in Bangladesh discusses the challenges, analyzes the key issues that may be barriers to thesuccess of its IT industry and discusses the inherent strengths which can be used as the launching pad for making Bangladesh a potential offshore source of software and data processing services. Recommended actions have been proposed under ‘short term’ and ‘medium term,’ depending on the priority and importance, and categorized by the fiscal, human resource development, infrastructure and marketing functional areas. The necessary ingredients to become a potential exporter of computer software and data processing services do not currently exist in the required quantum in Bangladesh. If Bangladesh wants to enter into this market, it needs to cross a number of hurdles within a very short time span. Concerted efforts from everybody concerned have to be put in on a war-footing basis, as this sector has the potential to generate the highest revenue for the country.