Sunny optimism for Kenya’s BPO market

By RAMADHAN RAJAB

Outsourcing will stem the growing unemployment rate and act as a pillar of development in the country, stakeholders in communications industry anticipate.

This optimism has buoyed the Government outsourcing hopes, as it raves up to take on outsourcing powerhouses, India and China, pegging its optimism of the blossoming of the sector on the arrival of three international fibre-optic cables.

"We already have the bandwidth we were yearning for, and this should spark growth in investment in call centres which will absorb numerous of the Kenyan graduates populace," Dr Bitange Ndemo the Permanent Secretary ministry of information and communications said.

The country is already working with US-Kenya Chamber of Commerce, a key international partner to bring to Kenya data security standards.

"This will act as key building block for the BPO/IT Enabled Service (ITES) industry national standards which will be adopted by Kenya Bureau of Standards (Kebs)," said Mr Edwin Onchari, chief Executive officer, Kenya BPO Society.

So far, Ndemo says, the industry has absorbed over 8,000 Kenyans in 30 call centres, most of which are located along Nairobi’s Mombasa road. Other numerous undocumented seats at unregistered centres provide services in either Business Processing Outsourcing (BPO) or Knowledge Processing outsourcing (KPO). The Government is hoping to create more than 120,000 direct BPO jobs in the next ten years.

surpassing agriculture

Though at its infancy today, the sector will be will be contributing about 20 to 30 per cent to the GDP by 2015, Ndemo reckons.

"We see this sector surpassing agriculture, if fully embraced both at rural and urban areas levels," he says.

According to Central Bureau of statistics estimates, ICT’s contributed 3 per cent of the GDP last year and is estimated to contribute about 8 per cent this year. The sector will also expand at an average of five to 10 per cent annually.

"Apart from enhancing economic productivity through efficiency and effectiveness, the industry will absorb many of our youths, creating more wealth for us," Ndemo noted.

He says his ministry has already forwarded a proposal to Treasury to fund special site, preferably at the new Sameer Park along Mombasa road, where all local small BPOs will be consolidated into one formidable unit to maximise on the economies of scale, with between 5000-10000 seats.

"Mombasa road is ideal because a natural BPO cluster is growing there. The Government would simply provide an enabling environment where the cluster can survive," Ndemo said.

He added that the facility will also incubate emerging software and animation industry.

"Research shows BPO sector begins to break at 250 seats. Combining our small and micro ones would speedup growth, as we stall premature deaths. The cluster theory is a key mover as it enable clients to authenticate our seriousness in growing the sector, thus earning us the blue chips companies (lucrative businesses) that traditional has been going to India," the PS says.

open for competition

Another thing that makes the sector confident of sunny future is that India, which has been a major hub, has embraced Knowledge Processing Outsourcing (KPO), leaving BPO open for competition.

"Kenya will optimise on this and develop BPO and station herself as a major hub," Ndemo adds.

To make the country competitive enough, the Government is pushing the market to embrace digitisation and to stage itself as a major e-service provider.

"We have not even scratched the surface. But the pace at which our information-technology sector is growing spells a bright future for the BPO sector," Ndemo adds.

With the decreasing costs of telecoms links, improved Internet speeds, highly educated hardworking workforce, and its geographical proximity to Europe and America, Africa is a more convenient location than Asia.

Moreover, the focus on proper English diction, cultural adaptability and courtesy that has in influenced Kenya’s excellent warm customer service will act as major stepping stone that will accelerate growth and give the country an edge over other emerging destinations.

But even with the excellent workforce, growth in BPO sector is being held back by apathy from many Kenyans.

"Though we have got the infrastructure in place, Kenyans are not taking advantage of these opportunities to explore outsourcing, for instance. Many mindsets are fixed on foreign contents, whereas they can tap into the local content to break the prejudice and diversify the job markets. Perhaps trail blazers will tap into our technological production to rake in millions," Ndemo said.

But everything will depend on the country’s ability to create a more investment-friendly environment, and improve the talent pool available.

Operators, and those wishing to invest in the sector, cite high operational costs, prompted by unfriendly taxation, bureaucracies in obtaining licenses, rampant power outages, traffic snarl ups, and political risks as the major shortfalls in Kenya’s investments scene.

digitising registries

But Ndemo says the Government is digitising all its registries, to enhance service delivery, scale down expenses by enabling the public view records, and ease the process of getting licenses.

"We want to break the bureaucracies by putting everything online," Ndemo said,

Moreover, he adds, the ongoing road expansions will free the roads from the gridlocks that make Nairobi an expensive city, and have been blamed for blurring prospects of having it as a high-tech city.

"To make our case viable that we are a hub, we need to walk the talk as a country. The society recognises that local and the regional businesses need to embrace outsourcing. We have started monthly sensitisation workshops to businesses and the Government at large, that it makes business sense to outsource and that business data/information is secure in Kenya," Onchari says.

Data insecurity has been the major fear that has scared off investors in the country’s outsourcing market

Another factor that threatens to hamper faster growth is Kenya’s limited skills development opportunities, given that the Multimedia University is the only institution certified by the Government to offer trainings in BPO and call centre operations.

"Top and mid-level management and specialised skilled personnel in the sector are not readily available. But with partnership with various institutions, we are developing training curriculums, as well as encouraging Kenyans to see the industry as a rewarding career path and should pursue it," Onchari adds.

He however contends that the challenges cannot be simplified to a single element, as it depends on the model each BPO start-up adopts.

"If you ask an investor with a sound capital base, the answer would be lack of ready and applicable skills. For a small start up with limited capital, it would be limited access to seed money," the CEO adds.

He however said data security, skilled human resource, business continuity (Data backup, and availability of multiple and credible service providers) will be key in catapulting the sector.

Ndemo said the Government is creating the Special Economic Zones to promote BPO enterprises, and will be assisting in building their capacities as well marketing Kenya as an outsourcing destination.

Other African countries eyeing this cutthroat business is Ghana, which is holding on its dream of creating 40,000 jobs by 2015, with ultimate goal of earning Sh78 billion ($1 billion) annually from the industry.