BY: Geoffrey Manono
The governmentâ€™s strategic plan â€˜vision 2030â€™ singles out Business Process Outsourcing (BPO) as one of the six pillars to drive the country to a medium developed economy. In the short run the government aims at achieving a top three position as a BPO destination in Africa.
The government has taken key steps to ensure targets are met; budgetary allocation, setting up of complementary institutions like the Information Communication and Technology Board (ICT Board) that will ensure facilitation and implementation of desired targets.
Currently India is the leading destination for BPO outsourcing; other countries include Philippines and China. Many countries and regions are being bypassed in the new wave of offshoring.
The choice of a global sourcing destination depends on many factors key of which include labour costs, technological advancement, infrastructure, language, education system, competent manpower, host government support, data security, political and economic environment, cultural compatibility and legal maturity.
Kenya stands to win immensely due to positive outcomes associated with the dynamic stimulation of local networks of linkages that transmit income and expertise more broadly. Some local companies will upgrade their capabilities to â€˜full package productionâ€™, joining the ranks of first â€“tier suppliers that are tightly integrated with leading world class companies.
The first BPO in Kenya that met international quality standards was set up in 2004; three years later there were 18 call centres. The arrival of the first undersea fibre optic cable (SEACOM) connectingÂ South Africa in 2009, the completion of the East African Marine Systems (TEAMS) fibre optic in 2009 and the East African Sub-marine Cable systemÂ (EASSY) reduced bandwidth costsÂ making internet use more efficient and cheaper.
Kenya ICT has evolved quickly demonstrating a competitive potential, the success of mobile phone premiÃ¨red by Safaricom (a subsidiary of Vodafone) has expanded internet access to millions of people. Kenyaâ€™s ICT services firms such as KenCall have had substantial success in the domestic as well as the international market.
Connectivity is fundamental in fueling outsourcing relationship but also service providers must enhance their ability to compete with other firms globally in the same industry.
Most developing countries tend to export basic business services such as back office tasks or low value offshoring. Increasing exports of a service especially high value added business represent an important opportunity to drive economic growth in Kenya.
Government and other key players shall have to invest significantly in garnering â€œmindshareâ€ amongst the global influencers like buyers, analysts, advisors and other service providers.
For the country to remain competitive the government should create a framework beyond the fibre optic cable and other capability development initiatives to remain relevant.
Kenya lacks the technical competence to handle major IT assignments, the government should direct its policy towards making the ICT industry competitive, the government should grant Â work permits to highly skilled foreign nationals to develop the industry. This should act as a sweetener to FDIs who could want to relocate their lead staff to Nairobi. The quality of life has to be showcased as better and adaptable to the foreign expatriates.
The arrival of the undersea cable was a major step; however the country needs to have other physical infrastructure in place in order to compete effectively. The IT industry has to be complemented with other industries. The improvement of the road network should be accelerated. The revamping of the railway network should be fast tracked. An efficient transport system will cut cost internal transportation hence a big boost to outsourcing industry.
The government should work round the clock to guarantee security, the threats from Somaliâ€™s Al Shabaab terror group should be dispensed together with other local security concerns. Security is a major factor for companies to consider relocating sensitive work to Nairobi, guaranteeing data protection is extremely important.
To make significant impact and gain visibility in the industry globally, the government needs to create a pipeline of highly skilled and trained IT professionals who will propel the industry to compete against outsourcing champions.
The last five years have seen a rise in IT training, several universities are offering IT training. There is need to empower universities to offer market oriented courses. Incentives can be given to businesses that are training employees internally or externally in acquiring prescribed skill set.
The government should do more to attract ICT related Foreign Direct Investments (FDI). To attract FDI, the government will have to offer incentives like tax breaks to the investors. According to the World Bank, Kenya scores very low in the parameter of ease to do business.
The liberalization of the Telecommunication industry gave rise to high FDI inflow in the sector, this should be emulated in other sectors. Global IT giants like Accenture, Cisco, IBM and Microsoft have made some minimum presence in the country, a sign that they anticipate the industry to grow. The active participation of these multinationals in local business will enhance competitiveness.
The government pledged a substantial budgetary allocation for the establishment of 7,500 seat BPO Park in Nairobi. The park is expected to attract investments and enhance the sector. The park will provide infrastructure and support services for businesses mainly office space, it will also facilitate technology transfer and enhance competitiveness in the sector
The pitch for Kenya in BPO has many greats, with a grounded English language, available young talent with fairly cheap wages, the mobile internet revolution, near same time zone with Europe, a confident judiciary to enforce contracts and vibrant related industries like banking. The government should catalyze the FDI inflow, enhance pipeline for high IT skills professional, efficient provision of infrastructure and an enabling business friendly environment to claim its rightful position as a destination of choice for BPO.
The aim should be to compete at global level and not the uncompetitive East African region where Kenya reigns supreme.