Swimming Towards The Tide
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Now onto the topic at hand:
I’ve often heard people use the term “swimming against the tide” to describe situations in which you may be applying for jobs in industries that are clearly dying. For example, trying to become a mortgage broker in the middle of a real estate meltdown or applying for a job with a bank in the middle of a global banking meltdown.
So, in this post, I want to talk about swimming towards the tide, not against it and there was a recent article in the New York Times that highlights this point very clearly.
It’s an article on outsourcing in India. Although the amount of work has slowed, it has not stopped and according to the article, this is one of the few industries that is slated for growth as more and more companies begin to pay closer attention to their bottom lines. i.e. once companies figure out that they can’t go back to the good ole days of wasteful spending, the outsourcing industry will pick up even more than it has before.
For any Kenyan entrepreneur looking to figure out where the tide is headed, it is here. It is outsourcing. One could say that the fiber optic cable line will be landing just in time for this coming tide and will be a vital tool for those willing to take advantage of it’s potential.
Anything that can be done over a computer and over the internet will be outsourced and that list is loooong.
A friend once asked me angrily why I was focusing so much on this issue of outsourcing and the internet. She surmised that I had concluded that it was the only way one could make money. I have not come to that conclusion, but I am recognizing that this is where the tide is moving. It is becoming very, very, clear and if you are a young aspiring, Kenyan entrepreneur, you almost have to pay attention to this.
The dynamics in Kenya, lend themselves to the growth of this kind of industry: A country with a large, young, English speaking population that will soon have high speed internet services and that has some of the highest literacy rates in Africa where cheap labor is widely available.
This is the future…..
I totally agree with the author, I’m currently in Malaysia working in BPO Company which has been given a contracted by a multinational company and we serve the MNC’s customers in Middle East, Africa, SE Asia and Pacific from KL. I probably have interacted with some of you. From my observation there is no reason why Kenya shouldn’t be a hub for BPO’s. With the introduction of fast internet, Kenya should be a prime location for BPO’s due to its time zone, availability of skilled labor, English is widely spoken and the only thing we should worry about is the political stability. I will be back to Kenya soon as the MNC is moving it Contact Center to Philippines and I strongly believe it can land in Kenya in the future.
kevk:
Are you a kenyan based in Malaysia?
Also, why are you so confident that Kenya can do it based on your experiences in Malaysia?
Isn’t the hardest part convincing companies to move their operations to a particular country?
Hi KE.
I will let kevk answer the questions you posed to him but let me jump in on the debate. I have written extensively on this issue of BPO. Before proceeding further I have a question for you.
You have probably heard of this company called KenCall. You know that Kenya was or is paying close to US$ 7000 per Megabit of bandwidth when the world average is US$ 200. Yet there is unanimous agreement from the Worldbank, govt and private sector that Kenya is ideal for the BPO. Now my question why do you think KenCall has still invested in Kenya despite such outrageous prices?
If you read the Business Daily you will see that Kenya was ranked 9 in Africa in terms of business friendly reforms despite going through post election violence and losing tourism and falling remittances. You also may have heard that South Korea invested upto US$10million in the technology park planned for Athi River. Why do you think there is all this interest?
I will tell it in short like you said Kenya has all the right conditions for this growth and more. Second Kenya is emerging as a centre of innovation in technology(read Mpesa, txteagle, ushahidi and a growing FOSS army). What has been missing is the infrastructure of the fibre-optics.
I think political stability is already being addressed. If you saw todays budget you will see that the govt has set aside money for implementing reforms. When Kibaki decides to do something it gets done. The ODM too is now realising that reforms will be carried out and they seem to be going along. Listen also to recent Kibaki speeches on this issue of reform it is encouraging. Why? The buss political establishment has already heard the buss people. It will be done soon.
Infrastructure is the key to development and especially in Kenya’s case. When we talk of infrastructure I think of the broad infrastructure i.e. education, health which encompass human capital and physical infrastructure like fibre, frequencies for WiMax, roads, rail, ports and airports. All this things are being addressed. Kenyans need to start looking deeper at their govt beyond the politics many will be surprised.
Hi KE, yes I am a Kenyan based here in Malaysia for the last four years, first as student and now on a working permit.
The whole idea of BPO’s is to cut costs. The reason I’m confident is because there is nothing really unique about Malaysia, Philippines, India and other major BPO countries apart from the technology and operation costs.
If Kenya’s business environment is favorable that is technology infrastructure (fast and cheap internet), competitive tax and business laws (as proposed in the reforms) and above all peace and tranquility then we be soon a favorite destination for BPO.
Convincing the operations of MNC to Kenya wouldn’t be easy but idea will soon sell itself, why?
Communication: we face lots of communication issues with African and Middle East clients especially with the calls since the technology used is VOIP (voice quality degrades with distance). Kenya can serve 3 regions effectively, Africa, Middle East and Europe with its unique location hence MNC should be willing to move their operation closer to the people.
Labor costs: Kenya is a Multi cultural and lingual country with besides the local language has English, Arabic, Hindu and even French and Spanish speakers. For this reason, BPO won’t have to bring in language speakers from across the globe to work. With these language skills, Kenya can serve all the above regions quite effectively.
Kenya has another advantage of its ideal location hence can serve numerous time zones without stretching the operation hours of a BPO which goes back to the question of cost.
You guys are really brilliant, KE, jelly fish and kevk. I go to uni here in the UK and i see nothing special about students from malaysia or south korea or even china. All they do is work hard, discuss and think for themselves. May thats special. Otherwise checkout my blog http://johnkaranja.com
Hi KE.
I just thought I should add the following links to show why I have confidence things will get better.
http://www.theeastafrican.co.k.....index.html
http://www.businessdailyafrica.....index.html
http://www.doingbusiness.org/E.....regionid=7
http://www.businessdailyafrica.....index.html
Finally TEAMS the Kenya govt/private sector partnership fibre-optic cable will be officially launched tomorrow i.e. Friday 12 June 2009. It will be launched by President Kibaki and PM Odinga. The PS B. Ndemo has confirmed the landing despite some last minute objections by the NMK who stupidly waited until the day the cable is scheduled to land to start raising objections. Sometimes I think some Kenyans have a death wish because only a very foolish or ignorant Kenyan would want to stand on the way of such a historic project or event. Here is the link http://www.eastandard.net/Insi.....14&a=1
Guys,
I’m willing to bet most of you here are just being over optimistic.
The reason I can give is simple. Having the TEAMS Cable arrive is a step in the right direction. But much more has to be done.
Infrastructure involves a lot of things. I believe the Cable will elevate Online Kenyan business but you have to remember they still have to compete with the rest of the World. Its just sad that East Africa was the last place the Cable got to, but none the less. I don’t think we can blame anyone but ourselves.
Hi Pimpin Curly.
An optimist is a positive thinker who looks for solutions and encourages others to find their true potential. A pessimist is a negative thinker who thrives on putting down others and discouraging any venture or enterprize.
Once upon a time there was a man who during his birthday would thank God for having given him an year in which he was able to do alot to advance the good of mankind. He always prayed that God would grant him another year to enable him fulfill what he hadn’t managed to fulfill, though he always added the caveat that it was upto God to decide when he had done enough.
On the other hand there was another man who would never celebrate his birthday because he viewed it as another year closer to his death. He always blamed God for all the misfortunes he had suffered during the year and lamented God’s unfairness or lack of action to help him. It goes without saying every new year was viewed with trepidation. He constantly wondered how foolish God was to allow evil to thrive yet he didn’t fight any negative thoughts he had but walked around depressed. Whenever his friends achieved some important milestones he would always say I hope you dont suffer some misfortune.
Pimpin Curly between the two men in the story which do you think you are? To me it is better to be over optimistic whatever that means than to be the preacher of doom and gloom. Kenyans should learn that it is not intelligent just to criticize. The greatest intelligence is those who discover and find solutions despite difficult odds. You have run away from Kenya because it is poor, undemocratic or uncivilized in your eyes. Yet you dont suggest positive solutions to solve those difficult problems. Even when Kenyans achieve great things you look for an evil thing to say.
In my judgement Kenya can do without people like you. Cynics like you said Obama a black man would never make it to the Whitehouse. Cynics like you said Africans can never rise against slavery, colonialism and poverty. Before the cellphone they asked whether Africans would afford cellphones. How would they charge their phones without electricity? Since they were illiterate and uncivilized how would they understand how to use cellphones. Well Kenya is now leading the world in mobile payments and banking. I live in the Netherlands and here they dont have anything close to Mpesa and USA is even further behind in that respect.
We didn’t say Kenya was not going to compete with the rest of the world. We know how to compete. We have done it in the olympics against greater nations than we and triumphed. We have been competing in the BPO sector with one hand tied behind our backs yet we were still able to hold our own. We have done it with rugby, with KQ, with ushahidi, with txteagle, with horticulture, with pyrethrum and with tourism. We continue to struggle against richer and greater nations than ourselves and with determination we shall overcome one day even if it does not happen in our lifetime. As for you depression will follow you all the days of your life if you see nothing positive from Kenya. Maybe you should renounce your Kenyan nationality and adopt another we the progressive Kenyans certainly shall not miss you.
To conclude my story when the optimist died many people attended his funeral. All the people he had helped including the poor who he gave comfort, the sick who he encouraged, the students whom he had given strength to overcome all came and declared him a hero. As for the pessimist no one came to his funeral because everyone he had ever dealt with always left with a depressed soul. Some even murmured Good riddance.
KE,
I don’t know if you took time to read the above Hate speech.
I suggest it goes back to the T. bin where it came from.
jelyyfish,
U can’t stand Pimpin Curly’s opinion…Yet you expect us to accomodate your shortsightedness! GROW UP.
Guys, I would like to bring back constructive discussion here. To add to my to earlier comments, its not going to be easy to make Kenya a BPO destination as countries such as India and China have numbers in terms of highly technical cheap labor which we have a clear disadvantage. However this does not mean Kenya will remain disadvantaged as with availability of fast cheap internet, will bring the advantage of increased access to information.
Realistically, Kenya as BPO hub will take time before all the prerequisites are in place and this will depend on the will and desire of Kenyans to change hence we have to be optimistic. Yes we can!!
Kevk.
I agree with your sentiments and would very much like to keep a civil and constructive dialogue. The above sentiments were a digression which I thought was necessary to prevent unconstructive cynicism, nevertheless I am normally coolheaded and civil.
Yes it wont be easy to take the BPO industry from India and China. What Kenya should do is concentrate on niche markets within BPO and introduce value addition. For example we have a number of young people trained as accountants with various levels of CPA certifications we could specialize in some of those back office accountancy tasks. We also have quite a good community of Free & Open Source Software (FOSS) developers.
With this group we could begin to write apps for clients in developed markets depending on their specifications. We also could develope quite abit of domestic outsourcing jobs from the govt. Imagine converting the judicial case law and processes into a digital database. Think also of the ministry of lands registry. Converting all their files into digital databases will ensure that our infant BPO sector will develope the necessary experience for handling huge international jobs. Our universities too could begin taking on scientific projects like the WolframAlpha project which is a huge consumer of bandwidth. Actually this BPO thing has unlimited possibilities which is why I cant understand people who predict failure because it just isn’t an option for us. Nevertheless I am not naive to imagine that everyone has such a rosy picture of the future but Kenya does have brilliant people like you for one who is already involved in the buss. Kenya Yes We Can.
Alright so the fibre cable is going to land, and magically turn this shambolic nation into an IT hub ??
What are you guys smoking ?
Where are the engineers, students being turned out by our few, badly run universities. A mobile-phone repair man does not make a software engineer.
“local pool of software workers” ?? have you checked out some of the recent email threads in the nation’s premier technology mailing list – a.k.a skunkworks. Do you see anything remotely intellectually challenging there ????
This is an interesting point you raise because I was just listening to Marc Faber talk about this issue. i.e. The millions of young people in India and China who can now work over the internet and who are hungrier for money and success. These guys (he said) will work 18 hours a day and as he put it, “they won’t be taking time off to go skiing”. That’s your competition.
Ahem:
I”m sure they’re some qualified software engineers, but the problem, as everyone has said, is the number of people, especially when you think of countries like India and China. So, in that respect, an aspiring entrepreneur should not be going after contracts from large corporations, which may need thousands of qualified people. Go for the small businesses that don’t have that much work in terms of volume, but who are still looking to save costs on labor and other operations.
The question then becomes: how do you get these small businesses to move their back office work to a BPO center in Kenya? If you can figure that out, the money will come, but what do you do? pick up the yellow pages and just start cold calling people? advertise your services online? what?
That’s the hard part: figuring out your niche, then trying to convince them to move their work to Kenya. I like Jellyfish’s accounting example.
Ahem,
People said said the same thing about cell phones when cell phones arrived. People said business will thrive.
When the price of sending a text message was high people used to complain that its hard on business. Now that the price of sms and calling is down how come the economy does not show any robust changes.
I mean common guys think for a minute…. Teams cable by itself will reduce internet costs same as the price of a sms reduced when the prices got cheaper. Way much more needs to be done with infrastructure.
Need I say more… I’m I talking to people that been to school ????
KE,
KE I told you before…. You need to be conscious when someone says the truth.
Hi KE.
The BPO business is like any other. Do you know the way when you are a doctor you find you have alot of friends who are doctors or people involved in medicine? Stockbrokers usually know other stockbrokers and so do bankers, lawyers, accountants e.t.c.
Well the first thing you do is register for all the myriad IT conferences dealing with BPO or the niche market you are looking for. Today with the web this is relatively easy to find. You also look to other folks who are in the buss. Infact much of Kenya’s BPO buss could originate from India. India is quickly upskilling and it’s turnover is now very high. They are now looking to outsource the more mundane tasks of their outsourcing jobs.
However the normal marketing techniques still hold for the BPO sector i.e. Advertising online and in the relevant IT publications and good social and business professional networking. Creating a media presence is also a good strategy. Check out how SEACOM has risen from relative obscurity to an almost household name. They used even their environmental impact assessments study to endear themselves to the local fishermen. Now imagine a guy who has never heard of fibre-optics telling you how SEACOM will bring changes to his village and help him sell his fish to distant markets. That means you have to seize every opportunity to sell yourself.
Once the landbased infrastructure is done and the fibres are lit, the software firms will begin to seize the opportunities. The govt too has started offering incentives through the budget. The tax incentives offered to the film board and ISP’s will begin to have an effect. We should however give it two to three years to begin seeing results.
Hi KE
Please refer to Bankelele for an answer as to how the cost of doing business has come down because of mobile phone usage. Here is the link http://bankelele.blogspot.com/
jellyfish,Still drinking koolaid.Such cables have been there around Africa..only eastern africa had been left behind because they were sleeping when at&t was contracted in early 90s .Listen,except maybe ,kagame ,the rest of the region will join other africans in sleep as soon as they celebrate its landing.If feeding 30million people cannot keep us awake..u think you can beat a guy who’s feeding more than one billion and has fun doing it.
Mwalimu.
You are definately out of your league here. Your technical proficiency in such matters is zilch. Say something useful and maybe you’ll earn some recognition. I dont entertain Rush Limbaugh mentality. Since you are obviously looking for a fight I will not dignify you with one. I will very wisely ignore future comments from you. If you feel you want to let out some steam look for me elsewhere.
Jellyfish,
So, why not tell us what you disagree with me…India feeds 1 billion people…We can barely supply unga (corn) population of 3% that of India.
OK you are more than a decade behind them in this..BPO thing..with all their software engineers, college youth, tech expertise,infrastructure..and u gonna beat them.
Dont even talk of china..U’ll be competing with sw africa,SA,Egypt…tell us what u gonna do..Don’t run away, bring your tech proficiency.