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A guru in outsourcing business

By | May 4th 2010
By | May 4th 2010

By Fredrick Obura

At 29, Lucy Mutibo is the proud founder of Ken Tech Data, a multi-million shilling outsourcing company.

In 2008, while the company was still in its infancy, was selected to represent Kenya at the Call Centre Expo in the UK.

The opportunity gave Ms Mutibo, who holds a degree in Computer Science, a chance to interact with multinational companies and convince them to give work to local Business Processing and Outsourcing BPOs companies.

Lucy Mutibo, sees huge opportunities for BPOs. Photo: Jennefer Wachie/Standard

Two years later, she says local BPOs have more jobs than they can handle.

"Kenya has become a major destination for international jobs," Mutibo says.

"We are now taking jobs from leading BPO giants in Asia and South America. "

"Every day, we get more calls from major outsourcing firms in Asia and the Middle East asking us to get into partnership with them," she says.

Heavy investment

Mutibo attributes the growth in the BPO sector to expertise in the country, and the heavy investment in infrastructure by the Government and private investors.

"The dawn of faster Internet through the fibre optic cable, for instance, has provided the industry with brimming opportunities," Ms Mutibo says.

"Many of us are now able to offer value addition like the IT-supported services — another money spinner in the BPO industry."

Ken-Tech data was incorporated in 2006 with a handful of employees, while Mutibo was still in school. Initially, its focus centred on data-related operations targeting local firms.

"As a student then, breaking through an industry which involved doing a third party’s IT-related assignments was a hard sale," she says.

Win clients

"It required dedication and a lot of investment to win trust from both local and international clients."

She says at the time, the Internet was not just slow, it was also erratic.

"We spent a lot of money to pay for low quality satellite Internet and were restricted on the type of work we did," she says.

Ms Mutibo says the company started international voice operations with 24 frontline seats.

With Sh1.5 million family contribution as seed capital, the company kicked off with 10 employees.

"Three years later, we operate 150 seats with about 100 employees working in two different shifts," she says.

"The breakthrough came in January last year, when we bagged a $90,000 contract from one of the leading local Internet Service Providers (ISPs)."

Thanks to the contract, Ken Tech Data expanded operations, and netted more clients from sectors like mortgage, insurance, human resource and other ISPs.

"The interesting part in the industry is that once you get a contract and execute it diligently, more contracts will come your way," she says.

Two years ago, Ken Tech Data was taken over by a well established Export Trading Group of companies, a partnership which has contributed to its stability.

She says opening up to investment companies, and aggressive marketing has contributed to the growth of Ken Tech data.

The firm now plans to venture into other companies in the coming years.

"This would create more job opportunities and help alleviate poverty in the country," says Mutibo.

The firm’s staple of services has expanded to include web design and trouble shooting — a liquid area in the outsourcing business.

The technical services now offered by players in the industry accounts for the bulk of most BPOs’ revenue.

Other services are transcription and data related non-voice operations that include virtual assistance services and application testing.

Great potential

ICT Board Chief Executive, Paul Kukubo, said not many industries have as much potential to create direct and indirect jobs as the BPO industry.

"Corporates should consider outsourcing their non-core businesses to cut on costs," he said.

Local players like Kencall, Horizon, Deproim, and Adept Technologies offer different packages, including call centre services, data processing, transaction processing as well as digitalisation services.

According to Mutibo, the investment in the industry from both the State and private firms has seen renown destinations like India and Malaysia lose their clients to local outsourcing companies.

She says tax incentives and introduction of BPO courses in colleges would help the industry grow further.

Mutibo wants the Government to design a tax structure that will make the industry competitive.

She says the current tax regime is hostile to the sector, which leaves foreign outsourcing companies with a clear headstart due to the tax incentives they enjoy.

The appeal comes after a study by the Canadian International Development Research Council showed Kenya is still far behind popular BPO destinations such as Mauritius, South Africa, Ghana and India.

The study noted that South Africa, one of the leading BPO destinations in the world, does not have tax incentives, but has comprehensive investment, training and funding, while Mauritius abolished all taxes except a 15 per cent corporate tax.

On the other hand, China offers subsidised world class infrastructure, tax incentives for purchases, zero corporate tax status and a 30 per cent personal income tax rebate to employees working in units in the special parks set up by the Government.

Formulate scheme

"The Government should formulate a tax scheme that will expose BPOs to a corporate tax relief of up to five years holiday, and a labour tax relief holiday, in order to encourage youth to join the industry," she says.

"To be factored in the radical tax shift is the pay-as–you-earn relief, BPO training subsidies as well as the formulation of a Data Security Act."

"The Ministry of Information should work with the education counterpart to help us save money in the retraining exercise."

According to experts, the BPO industry in the country has great potential. Communication skills and neutral accents is Kenya’s pillar.

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