|Foreign firms are establishing a strong presence in the burgeoning East Africa's business process outsourcing (BPO) sector as countries embrace innovative solutions to boost public and private sector competitiveness.
Senior executives have said that outsourcing has re-engineered business processes in East Africa and is an integral component of companies' rebranding.
"Business Process Outsourcing (BPO) has transformed operations in many firms across all sectors of the economy from finance, retail, telecoms, healthcare and transport," said Munjal Shah, the Director, Business Development and IT, Techno Brain BPO ITES Ltd.
Techno Brain Group is an African company focusing on IT solutions, training and Business Process Outsourcing. It has established presence in 12 countries worldwide, nine of which are in Africa.
Techno Brain has penetrated the nascent BPO industry in Kenya, Uganda, Tanzania and Ethiopia and has cut a niche in the public sector to provide solution to government ministries.
Speaking to Xinhua on Wednesday during the ongoing East Africa Outsourcing Summit in Nairobi, Shah was categorical that the business of outsourcing critical services has gained traction in the East African region.
"An organization outsources services that are non-core. This activity is no longer a luxury but an imperative for businesses that want to remain competitive and relevant to emerging dynamics, " Shah said.
He regretted that the myth surrounding business process outsourcing has hobbled the growth of this crucial sector.
"Outsourcing is not confined to the IT sector; it can apply to retail, banking and finance, human resource, healthcare, media and research. Many people associate business process outsourcing with call centers yet they comprise 5 percent of the entire sector," Shah told Xinhua.
He was clear that the East African region can become an outsourcing hub in the light of abundance of skilled workforce, robust economies coupled with adequate infrastructure.
"The policy and legal environment has improved. For the last two years, governments in the region have facilitated the development of BPO sector. In Uganda, there are public private partnerships that have enticed operators to set shop in the country," Shah said.
He reiterated that for BPO sector to succeed in the East African region, governments must invest in supportive infrastructure and improve on business climate.
"As for now, skills and expertise are satisfactory, what is needed is to get more companies to set shop in the region," Shah said.
He added that incentives such as tax breaks will attract large pool of local and foreign investors to the BPO sector.
The BPO sector in Uganda is growing due to recognition by the government and private sector of the huge potential of this sector to transform the country's economy.
Badru Ntege, chairman of the Uganda BPO Association, said that the domestic BPO industry in Uganda has thrived against a backdrop of support from government and the business sector.
Ntege challenged policymakers and captains of industry in the East African region to demystify business process outsourcing and integrate the sector in all sectors of the economy.
"BPO can apply everywhere, to boost productivity in a company, outsourcing must be done. If you run a transport company, you can outsource the services of someone who has a stream of mechanics to service the fleet of vehicles," said Ntege
He emphasized that outsourcing is an integral aspect of modern businesses. "Office cleaning is a BPO, you outsource a job function to someone who can do it better at a cheaper cost," Ntege said.
He revealed that BPO has been refined in Uganda through creation of basic policies that support growth of this sector. The East Africa region could become the next frontier for business process outsourcing after South East Asia.
Anil Wadhwa, the Global Business Development Director, Spanco BPO, an Indian Company, said that healthcare, telecoms, government and utilities are niche sectors that overseas BPO firms have established themselves across East Africa.
"Sub-Saharan Africa region is an emerging outsourcing destination due to abundance of talented workforce, huge investments in technology and infrastructure alongside favorable policies," said Wadhwa.
The top 10 countries most attractive for outsourcing are mainly in Asia and include China, India, Malaysia, Indonesia and the Philippines. Wadhwa noted that Africa is an untapped BPO hub as the ICT sector grows exponentially.
"Macro-economic changes, policy reforms, infrastructural improvement heralds bright prospects for BPO sector in this region, " Wadhwa said.
He reiterated that the East Africa region can grab a slice of the global outsourcing BPO market estimated at 155 million dollars if countries tap a local talent pool, sustain economic growth trajectory alongside political stability.
Value addition is critical to spur growth of BPO sector in the East African region.
Tejpal Bedi, chairman of the Kenya IT and Outsourcing Services (KITOS), noted that knowledge process outsourcing and software support are niche areas that companies should tap into to remain relevant in the BPO industry.