Making Kenya Next Outsourcing Hub in Africa

Role of ICT
The 2006 Kenya ICT strategy promotes collaboration and outsourcing for economic growth and makes a good read. As a matter of fact, It is now evident that nations the world over have recognized the developmental opportunities as well as the challenges brought about by the fast-paced information age whose hallmark is information and communication technologies (ICTs). Evidence from developed countries has shown that ICTs can play a dramatic role in enhancing economic and social development by acting as a production sector for economic growth and an enabler for social development.

Sectoral Applications

ICT applications have enabled these countries make gigantic improvements in both productivity and quality in agriculture, manufacturing, infrastructure, public administration, and services such as finance, trade, distribution, marketing, education and health.

Kenya ICT Board

The newly launched Information and Communication Technology (ICT) board has started an aggressive campaign to market Kenya as the next outsourcing destination in the world after India and South Africa in this part of the world. South Africa with the largest economy and ICT infrastructure in the sub region, had been poised to lead the charge but now here comes Kenya with its fiber optic infrastructure being set up as well as the emergence of digital villages and kiosks all over the country.

Funding

The heavily funded ICT board plans to use the Sh8 billion loan it received from the World Bank in May to expand use of existing bandwidth, increase capacity for outsourcing as well as digitise the country’s 210 constituencies through digital villages.

Business Process Outsourcing is therefore an idea for 2007/08 and beyond and with enough capital you may wish to lay down strategies towards setting up a call center!

ICT and NSE

With the laying of the submarine cable and the country's fiber optic infrastructure time is now ripe for online shares trading and the emergence of online stock brockers in the league currenlty dominated by 18 brokers making it one of Kenya's exclusive clubs. The emergence of Online stockbrokers will be a move in the right direction. Currently hisanetafrica a stocks agency firm is providing online account management and reports and with the right infrastructure they can easily pounce on this new catch alongside other players as Eight Ltd and more.

Imperatives

As policy makers and the government strive to utilize ICT in all sectors as well as make Kenya an ICT hub it is vital to ensure the following:

Policy-Hasten the formulation of a legal and policy regime that regulates e-transaction, privacy and data protection, intellectual property rights, capacity building and generating content for the digital villages initiative, among others.

Connectivity-This will be achieved through the purchase of broadband capacity in regional and national networks for specific user groups such as universities, schools and technical colleges. Further there is need to fasten ther laying of the fiber optic cable infrastructure in the country and the under sea optic cable to connect Kenya and the world.

BPO-Speed up business process outsourcing (BPO) industry through intense marketing abroad so as to wrestle the pie from such developed economies as India. South Africa etc.

Implementation- There is need to implement the proposals of the Kenya’s National ICT Policy (2005) and ICT Strategy for Economic Growth (2006) amongst others.
Collaborations-The government should encourage partnerships with all stakeholders in maintaining a favorable climate for investment in ICT manufacturing and services.

Foreign Direct Investment-The should be full support for FDIs in this vital sector that is poised to steer Kenya towards Vision 2030.

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!!!!!