Business Process Outsourcing: Kenya’s Case

By MWANZIA Kevin

Two years ago, I got a call from a company in the United States. I noticed one thing that sent me searching for answers. The person on the other side of the phone had a heavy Indian accent.

My research led me to the term Business Process Outsourcing (BPO) this is the act of outsourcing non-critical services of a business to a third party. The third party has greater technical expertise in that service or he may perform that activity at a cheaper cost.

Due to the high wage rates in the United States and other European countries, most companies opt to outsource non-critical services from other parts of the world with low wage rates. According to the Outsourcing Unit of the London School of Economics, three main factors make a country a good BPO destination. Cost advantage, availability of skills and the government’s will to establish BPO centres and provide tax incentives to these centres.

Majority of the top ten BPO destinations are Asian countries such as Malaysia, Philippines, China and Thailand.

In Africa, Kenya lags behind Ghana, South Africa, Morocco and Egypt. In terms of countries, Kenya ranks at position 30 in the Clutch ranking of top BPO destinations.

The former Permanent Secretary at the Ministry of Information and Communication, Dr Bitange Ndemo, was very passionate about positioning Kenya as the top BPO destination in the continent. The Konza Techno City, his brainchild, is meant to mark the beginning of the journey to achieve this goal. The city plans to create 17,000 jobs in the BPO sector.

Dr Bitange Ndemo intended the BPO sector to be one of the major sectors in the Kenyan economy. By now, most university students have heard of academic writing or freelance writing.Many of us are earning good money from it.

However, the environment is anything but enabling. High internet charges and unreliable internet are some of the challenges. In a loose sense, this is also business process outsourcing.

The numbers in which most young university and college students have engaged themselves in online writing has left me in awe. This is an indicator that youth are willing to engage in business process outsourcing.

With the unemployment rate in Kenya at 40% as at 2011, the government should start recognizing the efforts of these young professionals and the contribution they are making to the economy. Due to the decentralized and uncoordinated manner in which young professionals engage in online writing, one cannot be able to ascertain the amount of dollar inflows that they contribute to the Kenyan economy. However, a rough estimate is that online writing contributes about 1 million US dollars per month during high season.

If the government invests in the BPO sector, it can reduce the unemployment levels in the country, which are increasing every graduation ceremony. Sadly, for now, fourth years should continue to print their CVs in tens, submit them to prospective companies and wait for that elusive white-collar job.

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