Hi Listers,
I am not sure if it is due to the end of two weeks of intense
discussions but we are supposed to bring the discussions to fruition
today. As I had mentioned, day 9-10 discussions are the same, that is
as described below.
Please let us continue to have your input. We will spill over into
Monday as this is a very topical issue.
Let us strive to identify Kenya's niche areas based on the strengths
and weaknesses identified.
Have a great weekend as we continue receiving your input.
Nyaki
2009/6/12 Catherine Adeya <elizaslider@yahoo.com>
- Day 9 of 10 - BPO
Discussions, BPO Discussions, Strengths and Weaknesses (Observations
from USA and UK); and Trends and Niches My apologies about the
bouncing emails yesterday, the issue is being addressed. As we close
the youth and gender debate, I do recognize that some issues may be
pending on this so feel free to address them but under the right
subject header. I also noticed that there were queries about the
labour laws and Employment Act and maybe we can revisit this at the
right time.
However, we have two days to discuss
the final theme beginning today. This theme synthesizes the strengths
that make South Africa, India, Mauritius and Kenya choice BPO
destinations. It also synthesizes the countries’ weaknesses.
Finally, the synthesis includes observations from the USA and UK as
sources of outsourced work, the trends in BPO and the niches the
selected countries have pursued or are likely to pursue.
The following is a summary of the research findings; a more detailed
summary is attached.
STRENGTHS AND WEAKNESSES
The researchers found
that some of India’s strengths
include government championship, the government works closely with
NASCCOM (National Association of Software Services Companies) and
involves NASCCOM in all policy decision making regarding the
industry. India generally has a large pool of science, technology
and engineering graduates which has made it a preferred destination
for high end knowledge process outsourcing. In addition, there are
tax incentives; National Skills registry (NSR) to facilitate
personnel background checks; and investors have single window
clearance for License application. South Africa on the other hand
also has clear government championship for the BPO sector evidenced
by the fact that investors and potential vendors are wooed from the
Office of the President.
There is also commitment to regulatory changes when required. There
is an effective marketing strategy (target marketing and perception
management), which has made many in the world perceive South Africa
to be politically and economically stable. There is world class
connectivity; S. Africa has 10 international airports, an excellent
road and railway network.
Mauritiusstrengths include good ratings from the World Bank ‘Doing
Business Indicators’ which ranks the country at position 24 for
favourable investment climate and number 11 for protecting investors
and 7 for starting a business. In addition, it is a multilingual
country (with two European languages) so it is an attractive
destination for both English and French speaking clients. Some of the
key strengths that make Kenya a choice destination for outsourcing is
that it is a good place to work and holiday (temperate weather and
beautiful country).
Indeed,
many senior people working for bilateral or international
organizations have preferred to live in Kenya after the end of their
contracts. Kenya also has government championship of the BPO
industry. The country is strategically located and a regional hub for
communications and finance. Kenyans generally have a good English
accent for English speaking clients.
Weaknesses were also
assessed in all four countries. In India, for example, there has/was
an international backlash due to security breaches that made some
companies pulled out of India. There is also the issue of high cost
of electricity.
Another
factor is the heavy Indian accent which has resulted in poor customer
experience especially for call centre work for international clients.
In S. Africa the cost of operation is still high compared to other
outsourcing destinations. Also, even though there are BPO specific
incentives, investors are yet to take advantage of these because of
the strict qualification criteria.
In Mauritius some of the weaknesses
highlighted were the negative perception of working in 24/7
environment and many Mauritians cannot imagine working at night.
Secondly, Internet and mobile communication tariffs are still high
despite liberalization and presence of the submarine cable. Finally,
in Kenya, I will emphasize a little more, there is a perception in
client countries thatKenya is not politically stable. It also
appears that Kenya lacks an effective marketing strategy.
Some believe that Kenya is sending the wrong people to woo investors.
There is lack of coordination and perceived ‘bad blood’ between
some of the key institutions and groups that represent this industry;
this is also evident to client countries like in the UK. This is not
helped with the soaring electricity costs combined with the high
amount of power outages which has made the cost of doing business
very high as companies have to invest in generators.Of course, the
state of the road infrastructure is wanting and the issue of constant
traffic jams causing loss of productive time.
USA
and UK: The attached summary has some analysis from the USA and UK
which includes their preferred outsourcing destination. In the USA,
the top ten (10) preferred outsourcing destinations, in order of
preference are:
1.
Rural or Small Town USA (via Indian Companies), 2. India, 3. Eastern
& Central Europe, 4. UK & Ireland (areas of high unemployment), 5.
South America, 6.
Mexico, 7. Philippines, 8. Canada, 9. Russia and 10. Middle East. It
can be noted that Africa does not feature. In the UK, the perceived
best three destinations as voted during NOA’s 2008
(www.noa.co.uk.index.php/awrds
)
annual awards: 1. Egypt, 2. Romania and 3. Philippines.
NICHE AREAS
Some of the proposed niche areas for the vendor countries are:
India: The niche areas for
India are a little hard to perceive as they were front-runners in the
BPO industry amongst developing countries. Over time they have found
that some of their niche areas are in remote ICT systems maintenance,
software development, and numerical analysis for various companies.In
addition, they have capitalized on their experience and historical
advantage and are now outsourcing work (or assisting the client
countries to outsource work) to destinations where they do not have
the comparative advantage. A case in point is actuarial work to South
Africa.
South Africa: Great potential in the banking sector. South Africa
also has excellent actuarial and insurance services. It is common to
find people who may source work to India because it is cheaper but
are now taking some of the actuarial work to South Africa as they
will find the skill sets that they may not get as easily in India or
Philippines. This trend may increase as they are willing to pay the
optimum price for these skill sets not necessarily the cheapest price.
Mauritius: Mauritius’s greatest niche comes from the fact that the
country is generally multilingual in two European languages (English
and French). Many of the current BPO work in developing countries are
amongst English speakers and they definitely need contacts who can
also work with their potential French clientele. Mauritius is a good
destination for back office transcription and translation services.
It may also be a good destination for front office work that needs
translation (English-French).
Kenya:Kenya
appears to be an excellent destination for some types of back office
work.
These include financial services (accounting and payroll services)
and legal work as there is a highly educated population in these
areas. It can be argued that there may be an opportunity for front
office (call centre work) as many say the Kenyan accent is neutral
though there has to be training in this area to ensure there is
standardization so Kenya can avoid many of India’s mistakes.
There is clearly an opportunity for transcription and translation
services (based on fact that multi-lingual workers are easy to find).
Due to the predominance of the tourism and hospitality industries in
the economy, customer service orientation is high amongst trained
Kenyans.
Discussion
Q12.There are many institutions marketing Kenya and are not doing a
good job of it and/or are not working from the same script.
What institutional set up should we have for marketing Kenya for
BPO&O and how can we improve the coordination and the similarity of
the messages?
Discussion
Q13.
Consider the following three examples. One, South Africa has many
challenges, some of which, like security, are more serious than those
for Kenya.
However,
many in the world perceive South Africa as a worthwhile destination
in Africa.
A lot of work has been done by the South African Government to create
this perception. Two, India’s cost of electricity is as high and
unreliable as Kenya’s. However, India is still the number one BPO
destination.
Three,
there is
the issue of the heavy Indian accent which has resulted in poor
customer experience. Consequently, there are jobs that are going back
on-shore to the client countries. Some of these clients are willing
to outsource again to the right destination where accent will not be
a major problem. This was confirmed in interviews in the UK. Given
the strengths of Kenya, the opportunities available locally and
abroad, and the lessons from other outsourcing destinations, what key
marketing strategies should Kenya adopt?
Discussion Q14.
Given the findings reported here and the discussions that we have had
here on KICTANET in the last two weeks, what niche(s) do you think
Kenya should pursue?
I
know the Bugdet 2009-2010 issues may be upper most in your minds but
let us focus on bringing this excellent 10 day discussion to
fruition.
I thank
you in advance.
Nyaki
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