Business Process Outsourcing; An Idea for 2007/08

Over the weekend amidst my weekend escapades i managed to squeeze time and attend a talk by some of the creme-de-la-creme of our society who have been instrumental in their areas of engagements. The weekend saw me attending a business and investments forum addressed by The Investments Secretary Mrs. Esther Koimett, PS ministy of Planning Dr. Edward Sambili, Top CBK Directors, Business Moguls, Entrepreneurs, Young Upcoming Business leaders amongst others.

At the end of the forum i thought it would be prudent if i share the same with my avid readers.

Highly potential sectors:

In their address the emphasis was on the key sectors that are likely to rake in millions in the next few years and any proactive business minded person may wish to venture. These encompass the Information Communication Technology (ICT) sector, Tourism, Financial Services Sector, Service sector, Construction, Agriculture, Capital Markets, Business Consultancy and Supplies and Services/Procurement.

Today i wish to talk about the new craze in town-Call Centers- Otherwise under the umbrella of Business Process Outsourcing. It is noteworthy that the advent of the ICT technology has seen the emergence of various technologies that are expected to change the way business will be conducted and correspondingly enhance economic growth and development. The issue of Business Process Outsouring (BPO) cannot be gainsaid as this was instrumental in the rapid growth and turn around of the Asian economies expecially India, Phillippines, Eastern Europe as well as in South Africa and Egypt.

Business Process Outsourcing (BPO):

Business Process Outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in the marketplace. BPO is often divided into two categories:

-Back Office Outsourcing, which includes internal business functions such as billing or purchasing, and

-Front Office Outsourcing, which includes customer-related services such as marketing or tech support.

BPO in India:

The BPO industry in India refers to the Services Outsourcing Industry catering mainly to Western operations of Multinational Corporations.The sector witnessed considerable activity during 2004–05, including a solidifying of operations by major Indian and MNC players and stepped up hiring. The domestic BPO market, catalyzed by demand from the telecommunication and Business Financial Services segments, matched the growth of BPO exports. The market experienced maturity and consolidation, a result of numerous mergers and acquisitions taking place within the sector. There were over 400 companies operating within the Indian BPO space, and third-party services providers. The key enabler for this has been cheaper bandwith leading to low telecom costs for leased lines and availability of educated English speaking workforce in India.

India's Challenge:

India’s BPO sector is facing increasing challenge from Kenya and other East African countries. South Africa also plans pose a strong challenge. The main daunting problem for India especially in Bangalore and Chennai is low quality in BPO services.

Other Emergent BPO Centers:

India has revenues of $6.4 billion from offshore BPO and $36 billion from IT and total BPO. Apart from India, other locations like the Eastern Europe,Phillippines, and South Africa have emerged to take a share of the market. China is also trying to grow from a very small base in this industry. However, while the BPO industry is expected to continue to grow in India, its market share of the offshore piece is expected to decline.

Call Centers:

Africa's call center industry is set for major growth and are deemed to gain popularity and preference over Indian operators, with South Africa and Egypt leading the charge thanks to cheap labor, good language skills and time zones that chime with Western Europe. South Africa, which is favored by British companies for its cultural affinity with Europe, call center positions are expected to more than triple to 7,400 by 2010. Egypt also continues to impress western investors with its mix of savvy and linguistically-talented agents.

Indeed, countries that have made improving IT and telecommunication a priority, like Botswana, Kenya, Senegal and Ghana, are ripe for growth.

Kenya--impeded in the call center industry to date by poor communications links to the rest of world--is banking that the first fiber-optic cable in east Africa to be laid by mid-2008 will boost its status as the region's top economy. Many Kenyan entrepreneurs hope that this, plus cheap labor, clear accents, and customer fatigue with Indian call centers could help the African country hook into the burgeoning call center and outsourcing Industry, worth $130 billion worldwide.

Fiber Optic Cables in Kenya:

The laying of the fiber optic cable has been on with Telkom having unveiled the long haul Mombasa-Nairobi fiber optic cable measuring nearly 500 km as the state-owned company readies for stiff competition from other players as Kenya Data Network (a company associated with the billionairre Naushad Merali and his Sameer Group) that is also eying the under sea fiber optic cable system. Telkom has introduced a new broadband wireless platform -- Kenstream Wireless -- to complement the already existing Kenstream services.

Kenya Call Centers:

Kenya's endeavor to drive down telecommunications costs to tap into the multibillion dollar outsourcing industry and make Kenya an information technology hub is welcomed in bringing Kenya into the fiber optic loop. Kenya's nascent call center business has grown from employing 200 people last year to 3,000 this year, despite relying on expensive satellite-based communications. To get more companies to give their business to Kenyan call centers, the country needs to increase its bandwidth up to 500 megabits per second by year's end and subsidize the cost until a submarine fiber optic cable is working.

Kencall:

Kencall is a premier call center established in Kenya that is already making inroads into the highly competitive Business Process Outsourcing industry despite the infrastructure challenges to their efficient operations. KenCall, being one of the country’s premier call centres, has defied the odds to win a global award in back office operations business, beating rivals from the infrastructure-enabled markets such as India and the Philippines.

Kencall has 500 agents and 5 international clients and has been at the forefront of an emerging outsourcing industry in Kenya, and is hungry for more growth.

Future 0f Call Centers:

Statistics shows that some 3,000 Kenyans now work in call centres, with the outsourcing sector encompassing about 30 companies. KenCall and 3 others dominate, industry players say. KenCall wants to treble its number of agents by the end of 2008. more

The future of call centers is bright with possible reduction in telecommunications costs. Further, with intense maketing likely to go on and a new focus by western companies on Africa (Kenya Included) It is time we take the responsibility to invest in call centers and MAKE MONEY!!!!!