Outsourcing Boom Coming to Kenya.
Outsourcing is the process of an organization or person contracting a company or person to do a particular function that is considered non-core. Outsourcing has emerged as one of the worldâ€™s fastest growing business sectors with countries like India leading the pack by having between 5-6% global market share and generating revenues of US$ 10.9 Billion from offshore outsourcing and US$ 30 Billion from IT and total outsourcing in 2008. The success of countries such as India, China and the Philippines in outsourcing has led to many countries, including Kenya, investing substantial resources to develop their outsourcing potential.
Although Kenya already has a growing outsourcing sector with over 50 registered companies operational, a boom is expected from this year. The main reason is that in June 2009, the first of three high-speed undersea fiber-optic cables will become operational in Kenya. The first to go live will be the SEACOM cable, followed by the TEAMS cable later this year and EASSy cable in the second quarter of 2010.
The cables, once operational, will give Kenya significantly faster, more reliable and less expensive telecommunications connectivity to the rest of the world. One report suggests that the Internet costs could drop by as much as 70% which means that a far larger number of Kenyans will be able to go online as it becomes much more affordable. Ultimately, all these factors will make Kenya much more competitive in offering outsourcing services in the global marketplace.
Apart from the much improved telecommunications that the high-speed undersea fiber-optic cables will provide the emerging outsourcing sector, Kenya has an abundant English speaking population who are highly literate and IT skills competent with clear accents that are ideal for call centers. It also has the advantage of a skilled and cost-effective workforce that has over 20,000 young graduates coming into the job market every year.
The Kenyan Government has also introduced a raft of incentives to make investing in outsourcing businesses a very attractive proposition. In fact, Outsourcing is underscored in Kenyaâ€™s recently unveiled Vision 2030 initiative as a key pillar and driver of social and economic improvement through job and wealth creation. Some of the key organizations that are driving the Kenya outsourcing agenda include the Kenya ICT Board, Kenya Business Processing and Contact Center Society , Export Processing Zones Authority, Communications Commission of Kenya and the Ministry of Information and Communications.
In the outsourcing sector of the Kenyan economy, the largest amount of attention has been centered on call centers. Companies such as Kencall, Skyweb Evans and Ken-Tech Data are some of the better established and successful call centers in Kenya. Setting up a call center requires large financial resources, technical expertise and international business development. For these reasons, this may not be most ideal of the outsourcing opportunities.
However, there are many low-cost entry points into the outsourcing sector. One of these is by leveraging online marketplaces that enable individuals and businesses alike to bid for outsourced assignments. Some of the largest online outsourcing marketplaces include eLance , RentACoder , and Guru which enable anyone from a software developer to an accountant to create their service profiles and then bid against competing bidders for assignments from practically every corner of the world.
Outsourcing is generally broken down into two distinct focus areas, Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO):
BPO, fundamentally, is the contracting of operations and responsibilities of a specific business function to a third-party service provider. Examples of BPO services include information technology systems management, multimedia and animation, bookkeeping and financial services, business consulting, computer assisted design, call centers, data entry, desktop publishing, typesetting, Handwriting services, human resources services, internet marketing, legal services, medical billing, proofreading, editing, software & technology, transcription, web design and web development, writing and translation.
KPO, on the other hand is outsourcing in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization. Examples of KPO services include knowledge processing services, intellectual property research, animation and simulation services, data research and analytics, litigation services, medical content and services, pharmaceuticals services, writing/content development services and database development services.
This article was written by Moses Kemibaro and published in the April 2009 edition of Adam Magazine.