[kictanet] Develop the LOCAL Outsourcing Market

Thu Feb 14 09:27:20 EAT 2008

Fellow Contributors,

Firstly I am impressed by the contributions that have been made in this
discussion forum and I must commend Marcel for kicking off this timely
discussion in the first place. Kenya is a beautiful country with a
determined and hard working people. If there is one thing we Kenyans ask is
an equal opportunity and we shall excel. If you talk to any economist they
will tell you that the future is in the service industry more so for a
country like Kenya that is neither gifted in mineral riches nor expansive
arable land (Kenya is primarily 70% desert however with the remaining 30% we
are able to become one of the global leaders in floriculture and tea
production).  The sad thing is that the world markets have changed and
become increasingly competitive. Service industries worldwide more so in the
IT Outsourcing space compete very aggressively for the market opportunities
that present themselves. And those opportunities that have already been
bagged are protected jealously. 

Unfortunately when it comes to the IT industry the trend that is emerging is
not pretty. Blue chip companies, government departments and parastatals have
for a while adopted a strategy that has not been conducive in nurturing this
industry. The sad thing is where they seem to have a silent conspiracy in
only seeking international players for the major IT projects. Talk of
Chinese Government IT Loans/Grants complete with planeloads of Chinese
Engineers and technicians who swarm in and out without passing on any skills
leaving us with pretty much mis-directed/unused investment once the project
is implemented aren't misplaced. Almost all of these institutions continue
running non-core back office activities that should be outsourced. The
"smarter" ones that should outsource are sure take their business offshore.
Yes this is true. It is an open secret that if you were to pick up a phone
in EABL, the pride of Kenyan Manufacturing, and dialed IT help desk you
would end up talking to a person sitting in Bangalore India. It's not that I
have anything against the good people of Bangalore, my issue is that by
farming out this work to Bangalore and not giving local companies a chance
to undertake the work locally we are actually exporting jobs. We are taking
jobs that were previously there and shipping them to India. The very least
Mr. Gerald Mahinda should have done was to engage local entities to carry
out this work and require them to partner with international firms to so as
to ensure that the necessary skills are brought to this market. A very good
example of this is the proposed IPO for Safaricom, some of the world's
leading investment banks partnered entered into consortiums led by local
entities to carry out the investment advisory work. It took a concerted
government policy to ensure that this happened; otherwise local Investment
Banks would have had no chance in the world to win that work.

The Kenya BPO & Contact Centre Society (KBPOCCS) says very little about
growing local BPO outsource work. Is this not on your agenda? It seems that
we are focussing (hastily) more on closing international outsource work even
before you build and deepen your local capabilities and capacity, not
forgetting experience. Do you also think that it is feasible/advisable to
only depend on work from off-shore, when we know of the many other
challenges that we face e.g. bandwidth availability and even when available,
the quality of this bandwidth?

Fortunately not all is lost, one major player (Safaricom) announced plans
sometime mid-last year thereabouts to outsource part of their customer care.
Has the KPPOCCS motivated for this work to be awarded to a local service
provider OR are we going to see this work being awarded to an off-shore
operation? Did they ever award this work? Safaricom made a clear indication
that it is interested in engaging local entities to carry out this work.
However given that this process has gone quiet I pray they have not sold us
down the river and awarded the business to some Indian or Philipino or even
South African company. My point is the international clients we are trying
to woe into farming out their work to Kenya will check us out thoroughly and
if they see that the big players in this market are not giving their
business to their fellow Kenyans why should they?

Similarly, Barclays Bank is another major player where the CEO is on record
for declaring he was looking to establishing a large Contact Center in Kenya
which could serve other Barclays operations across the globe (I think he
said something like up to a 10,000 Seat contact center would be established!
Can you imagine that? No one knows whether he was misquoted). He lamented
the poor telecommunications infrastructure and our unpreparedness (probably
skills, technology, work ethic, culture etc -wise) for such work. I think
that the best strategy to adopt is for KPPOCCS in conjunction with the Kenya
ICT Board and the Ministry of ICT to lobby hard for these kinds of declared
outsource opportunities and bring them to fruition. Neglecting local
outsource opportunities is like giving these potential outsourcers a "carte
blanche" option to look externally for service providers. This way, many
potential jobs are lost not forgetting the foreign exchange that is exported
with the jobs!

I read in the newspapers yesterday that the "World Bank has released funds
to support Kenyan Call Centres". The entire article was based on mostly
subsidising the cost of international bandwidth. In effect the money being
lent to us for this is all being remitted out to bandwidth providers who in
a way put a premium to the bandwidth that they supply us. Isn't this money
better utilised now to actually help "incubate" the budding BPO/Contact
Center businesses by strengthening their skill capabilities, technology
capacities, etc.with seed capital. It is clear that only the few established
players and those yet to establish but with deep pockets to set up big, will
reap the benefits of this bandwidth subsidy.  

These are the reasons that I will throw the gauntlet to the Honorable
Minister Samuel Poghisio, Bwana PS Dr. Ndemo, CEO of ICTBoard Mr. Paul
Kukubo etc, please be vigilant, do not rest. Fight for this fledgling
industry, there are many low lying fruits such as Call centers for
organizations such as Safaricom, Kenya Police, GoK etc which you can lobby
and encourage to be outsourced to local entities that will give the local
industry the critical mass that will enable it grow and compete very well in
the international arena.

I rest my passionate plea!

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Akich D. Kwach
Director - Research & Operations
ARCHWAY Technology
Mobile:+254 722 742155
Tel: +254 20 4778026
e-mail:  <mailto:kwach at archway-productions.com>
kwach at archway-productions.com 

www.archway-productions.com <http://www.archway-productions.com/> 

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