DIGITAL OUTSOURCING OPPORTUNITIES IN AFRICA www.munutech.com Felix Arim Managing Partner Munu Technologies

INTRODUCTION Africa has been seeing sustainable economic growth and development in many countries. At an average growth rate of 5.6 per cent a year, Africa was one of the fastest growing developing regions from 2001 to 2008 (AfDB and UNECA, 2010). it was also broad based, with many sectors contributing resources, finance, retail, agriculture, transportation, Information technology and telecommunications www.munutech.com

UGANDA’S PERSPECTIVE The Ugandan government has identified Information Technology Enabled Services–Business Process Outsourcing (ITES-BPO) . As one of the key sectors to enhance economic growth and reduce youth unemployment in the country. The overall vision of the Ugandan government is: “ To transform the country into a ‘Knowledge-Based Uganda’ where national development and good governance are sustainably enhanced and accelerated by timely and secure access to Information and efficient application of ICT. ” www.munutech.com

BPO REGULATION IN UGANDA The government of Uganda established the National Information Technology Authority Uganda (NITA-U) in order to: Strengthen efficiency and effectiveness in the delivery of public service through the use of Information Technology. www.munutech.com

CONT’D Offer a technological fix to some socio- economic problems of unemployment, Poverty and inequality by connecting clients/employers to prospective workers around the world in what seems to be a simple route to employment and income-generation for workers. A small number of companies, nonprofits and foundations want to see if the rapidly growing global supply. www.munutech.com

BPO OPPORTUNITIES Leverage the image of its democratic and relatively stable political environment towards establishing itself as a regional hub for offshoring services. Establish itself as a subcontracting hub for more established destinations. Develop offerings such as call centres and data processing in the short and medium term for the domestic, regional and international market Leverage opportunities created by the e-governance initiatives to kick start the Industry www.munutech.com

CHALLENGES TO SECURE GLOBAL INTERNATIONAL CONTRACTS Among others, Lack of readily available human resource with the relevant skills, high staff turnover which was partly attributed to low remuneration, lack of proper policy governing the sector and high taxation. Accordingly, the successful development of this sector required government intervention. www.munutech.com

CHANGE MANAGEMENT AS A MAJOR CASE Blue-chip service providers and innovative, risk-sharing contracts. If one underestimates the importance of Change Management and Governance in outsourcing, success will elude you. In multiple interviews with outsourcing providers and buyers of outsourced services (clients): Also poor Change Management and Governance are the most systemic and far reaching of all the mistakes that can occur. Experience shows us that managers and project leaders tend to excel at domain knowledge, vendor and portfolio management, rather than Change Management itself. www.munutech.com

Why are Change Management and Governance critical business issues? Outsourcing agreements can fail to achieve intended benefits, not because the goals were ill-conceived but because of poor planning and execution, even cultural intransigence. The benefits of outsourcing come through the successful introduction and sustainment of change a continuous commitment rather than a one-time event. www.munutech.com

Change cont’d… However, making change happen successfully is one of the more difficult aspects of organizational leadership and corporate management. we are highlighting the commonly encountered problems that impede successful outsourcing implementations and, in particular, undermine changes required to achieve expected results. The outsourcing implementation is when "the rubber meets the road." It is the critical juncture in the outsourcing relationship where: www.munutech.com

More challenges The Lack of understanding of post-contract processes and decision rights Little or no support from client leaders receiving services. Poor Mutual Understanding of the Contract Client Retained Team Not in Place or Too Small. Client Retained Team Lacks Required Skills. Loss of Key Talent and/or Poor Knowledge Transfer. Outsourcing creates uncertainty for www.munutech.com

More challenges Inability to Meet Pent-Up Demand for Services. Prior to an outsourcing End-User Resistance to Adopting New Methods. Oftentimes, a third-party service provider is Culture Clash Between the Client and Service Provide Changes Don’t Last www.munutech.com

Conclusion As late follower countries for BPO, Uganda,Kenya and Rwanda have faced strong competitive pressure from mature BPO industries in India and South East Asia. The local BPO sectors do not have the depth, scale efficiencies, cost-competitiveness and skill base to compete for international customers with established foreign BPO companies and markets. Due to a lack of international competitiveness, Rwandan and Kenyan-born BPO enterprises have largely expanded within their home countries or across Africa (for some Kenyan companies), where they can offer a better fit of supply and demand (defined by provided/demanded quality and price). www.munutech.com

Conclusion Cont’d.. At times, local BPO companies themselves “re- outsource” their work abroad, hiring foreign companies, as this can still be cheaper than doing it locally for large scale and complicated projects. In addition, subsectors of BPO do not always adhere to the same market dynamics, for instance, regarding available deal flow and required skills. www.munutech.com

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