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Posts Tagged ‘Kenya’

Broadband spurs new businesses and ideas in Kenya

June 27th, 2010

When Kenyan graduate Roy Wachira, 25, set out to start his first business, he turned to the Internet, whose growth in the east African nation is spawning opportunities unthinkable even a year ago.

Mr Wachira runs a free social photography site that allows users to view special occasions or travel photos online and provides firms such as telecoms operator Safaricom with a channel to reach their targeted consumers.

The site is one of many innovations in east Africa’s biggest economy spurred by faster Internet speeds through three fibre-optic cables which link Kenya with the rest of the world.

Since the arrival of the TEAMs and SEACOM cables last year and a third one called EASSy last March, costs have fallen to as low as $22 per megabyte from $4,000 previously.

Usage has jumped to 15 gigabytes from 1.8 gigabytes eight months ago.

“It is a good time to break into online in Kenya, there is a surge in usage of Internet here,” says Mr Wachira.
Mobile data users quintupled to 1.98 million last year from 398,190 in 2008 and telecoms firms are hoping data services will drive growth as average revenues per user from mobile phone calls fall.

Sanjay Sikka, the chief executive officer of Horizon, an $8-million call centre in, Nairobi, shares Mr Wachira’s optimism.

He says Horizon was set up to take advantage of Kenya’s ambition of going head-to-head with established business process outsourcing (BPO) players such as India and Philippines.

“With the fibre optics coming, that makes everything work,” Mr Sikka said in a plush building with the capacity to house 1,200 agents fielding calls and e-mails around the clock.

Horizon’s clients include a Kenya telecoms operator and a large British-based firm, says Mr Sikka, who has worked for Accenture and India’s Genpact in a 16-year career.

Those who have ventured into the brave new world of business made possible by faster Internet, however, say challenges abound, including on the regulatory front.

“Digital laws are a big issue, our constitution is really old, it doesn’t have a lot of the stuff you require to enable people to do a lot of digital activities,” says Mr Wachira.

“Parliament needs to do something to change these laws because my generation is going to be online.”

Stephen Kiptinness, a lawyer and head of regulatory affairs for France Telecom’sTelkom Kenya, said a data protection law was long overdue.

“We need one, like, yesterday … we are an information society. This information can be used for scams and identity fraud,” he said. “How the information is collected is critical, how it is stored is critical as is how it is accessed.”

He adds that lack of data protection guarantees, coupled with a judiciary that is perceived to be weak and slow, could dissuade some foreign firms from investing in the sector.

Julian Cunningham-Day, a partner at London-based Linklaters, says there are other challenges to Kenya’s ambitions for its outsourcing sector like unreliable power supply and perceptions of political instability.

“The clashes following the disputed elections in 2007-8 shattered many peoples’ perceptions of Kenya as a politically stable country,” said Cunningham-Day.

Those chaos did not dampen a move towards online shopping.

Motivated by the rise of access to the Internet, banks like I&M Bank started this year to offer electronic payments services to businesses in the country.

“The new payment gateway will give potential and existing Kenyan e-commerce merchants the opportunity to expand their sales online with a significant reduction in transaction costs,” says Arun Mathur, the bank’s chief executive.

Businesses which have existed for decades are also searching for ways of leveraging the enhanced access to the Internet.

Peter Mwangi, chief executive of the Nairobi Stock Exchange, says they are looking to introduce Internet and mobile phone-based trading this year to allow investors to take advantage of market moves in real time.

The stock exchange is the fifth-largest in Africa after South Africa, Morocco, Egypt and Nigeria and was the top-performing market in Africa in the first quarter, with the main index up 25.4 per cent after a lacklustre 2009.
While the bourse awaits the introduction of new channels for trading, Kenyan musicians are already tapping the Web to market their music, and finding.

A group called Just A Band realised the power of the Internet after posting a short clip of its video called Ha-He on YouTube.

The clip, that features a character named Makmende, went viral, taking social sites such as Facebook and Twitter by storm.

It spawned Makmende Internet pages, turned the song into a hit that dominated many conversations, mainly around jokes about the tough character who rescues girls and torments the bad guys in his superhero role.

Source:http://www.businessdailyafrica.com/Company%20Industry/Broadband%20spurs%20new%20businesses%20and%20ideas%20in%20Kenya/-/539550/947558/-/item/1/-/boh2t6/-/index.html

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Tags: BPO broadband IT Kenya

Kenya urged to exploit BPO industry

May 25th, 2010

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Kenya should capitalise on the opportunities that are bound to be created following the ongoing economic crisis in the developed world to grow its Business Process Outsourcing (BPO) industry.

NetApp Area Director for Middle East, Africa and Pakistan Martyn Molnar said with the debt stricken Europe and with America trying to recover from the global financial crisis, many companies will be looking to outsource their businesses as a way of cutting their costs.

“There are several challenges facing each of those individual countries which are forcing them to embark on the toughest austerity packages. So you are going to see a move towards outsourcing large portions of their business,” he said.

Kenya which is touted as one of the strongest African economies will be a likely beneficiary due to its many advantages including a rising middle class, educated workforce and increased bandwidth. The country also has a big talent pool which has seen many call centres established and set the stage for Kenya to market itself as an outsourcing destination.

Although it is joining the global BPO market when there are already established countries such as India and Philippines, the government still believes that it has the potential to contribute significantly to economic growth. This has seen the industry identified as one of the sub sectors that will drive Vision 2030 by creating thousands of jobs and earning the economy billions of shillings in revenues.

“If I look at Kenya, I see an opportunity to be in that market because there’s bandwidth and there is a vision that is all about creating an enabling environment. If you look at the West, their vision at the moment is to cut costs,” Mr Molnar said.

He pointed out that the government now needs to address the skill and capacity constraints in the sector which would enable it to identify and offer services for a niche market.

By employing the best practices, the best tools and technology, the country would be able to clinch the big contracts which would go a long way in propelling it as an outsourcing hub, he added.

The sector has grown rapidly recording a six percent increase over the last three years and all efforts are being made to enable it to exploit the potential estimated to be worth Sh45 billion.

As a data management organisation, the director said NetApp would work with the government to implement the best practices to make the local BPO sector competitive at the global stage.

“We are engaging on the product spectrum, on the whole knowledge transfer and process spectrum as well. When we believe that have we have defined the right processes around data management then we can work hand in hand with the service providers to make sure that we have what the customer needs,” he added.

Information Permanent Secretary Dr Bitange Ndemo acknowledged that the country was facing many challenges as it moves to adopt ICT in all sectors of the economy thus the need to seek help from the experts.

“By partnering with people who understand all these problems makes it easier for us and more efficient that trying several models,” he said.

Cyber security is one of the biggest headaches that the PS admitted to having but added that the partnership arrangements they were considering with such firms would help address such issues.

Although there are laws to deal with security issues, it is inadequate to address all the emerging problems brought about by the dynamic technological advancement.

Dr Ndemo said they were looking to training people in this area by for example facilitating the return of qualified Kenyans in the Diaspora which would in turn help ensure the safety of government data.

His remarks came a day after an information technology specialists said that Kenya is not adequately prepared to deal with dangers that increased internet usage pose to cyber security.

Securityrisk Solutions Director of Operations Jason Finlayson told Capital Business that although the country has in the few years that internet penetration has increased tried to put in place measures to curb cyber fraud, there is still so much that needs to be done.

He pointed to the operationalisation of the undersea fibre optic cables which increases the country’s vulnerability to cyber crime and therefore called for the implementation of measures such as enactment of proper policy frameworks and public awareness campaigns to protect the country’s information.

Source:http://www.capitalfm.co.ke/business/Kenyabusiness/Kenya-urged-to-exploit-BPO-industry-4239.html

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Tags: BPO IT Kenya

Kenya government commits $12 million to BPO expansion

April 16th, 2010

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Kenyan government has committed US$12 million to supporting BPO (business process outsourcing) training, marketing and office space for one year.

The money is part of the initial agreement where the government will take the office space at the Sameer BPO Park and provide space to existing and incoming BPOs in preparation of the expansive Malili Technology Park, that is further out of the city. Sameer Park is about 15 kilometers from Nairobi Central Business District and Malili is about 60 kilometers out of the city.

“Most of the big outsourcing companies have expressed interest in the technology park, provided the government can give some guarantees; the provision of free office space, training and marketing funds demonstrates our commitment,” said Bitange Ndemo, permanent secretary in the ministry of information and communication.

The government and the International Finance Corporation are developing the ambitious Malili Technology Park, a 5,000-acre project that will bring together major outsourcing companies, universities, hotels and other export oriented services.

The project is involving massive infrastructure upgrade and collaboration between 10 different government ministries. One major infrastructure project is the development of high speed railway system, in a country where railway services are yet to be fully developed.

“The Malili project is the basis for marketing Kenyan services in the East Africa region; we already have tenants who have expressed interest in taking up space in Malili,” said Paul Kukubo, CEO, Kenya ICT Board.

Regulation is one of the challenges facing the project. The Special Economic Zones policy has already been presented to the cabinet but the bill is yet to be drafted and debated by the ICT industry.

“The policy is still in cabinet and once approved it can be taken to the Attorney General’s office; the legislation process can take up to one year,” added Ndemo.

The Malili project is expected to be done in two years, within which the government expects to be done with the legal formulation and to have supported the BPO sector to compete with other destinations like India, Ghana and Mauritius.

Source:http://www.infoworld.com/t/outsourcingoffshoring/kenya-government-commits-12-million-bpo-expansion-861

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Tags: BPO Kenya

Subsidy to Kenyan BPOs extended

January 15th, 2010

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The Kenya ICT Board has said that it will now provide bandwidth capacity subsidy to companies that have been contracted to provide third party business functions until the end of March this year.

This follows the extension of the Sh530 million World Bank-funded support to outsourcing firms to help them meet the cost of internet connectivity that initially supported businesses from July 2007 to February 2009.

The project has now been extended to March this year.

“The Board wrote to the World Bank asking for an extension of the subsidy because the cost of bandwidth had not come down as it was expected with the arrival of the undersea fibre optic cables,” an official at the ICT Board who’s not authorised to speak to the media told Capital Business.

The subsidy program was put in place in three years ago when the government received credit from the International Development Association (IDA), to enable Business Process Outsourcing (BPO) firms reduce their operative costs. It was to run until the landing of the undersea cables which was expected to significantly reduce connectivity costs.

This however did not happen as there was a delay in the arrival and operationalisation of the cables and later, telecommunications service providers declined to pass on the costs of the cables to Internet users.

The source said that the subsidy which will enable them to backdate the support to March last year when the first phase expired.

He said the BPO players who have in the last 10 months been meeting their internet connectivity costs will be audited by the board and then reimbursed.

The Board has disbursed Sh37.8 million to the operators between November 2008 and February 2009, he said.

“It is predicted that the extension of this support will significantly increase the uptake of the subsidy by industry players and give the industry the necessary boost to grow and be able to compete on a global scale,” ICT Board Chief Executive Officer Paul Kukubo had said in a statement sent earlier to newsrooms.

The subsidy is open to all firms offering outsourcing services but they are first required to register with the ICT Board after which an appraisal is done before disbursement is made.

“Increasing Kenya’s competitiveness in the global BPO sphere is vital for the growth of the industry. With the fibre Optic cables now in place, Kenya has become a significant competitor in the global BPO space,” the CEO added while expressing optimism that the high internet prices in the market will still come down.

Source:http://www.capitalfm.co.ke/business/Kenyabusiness/Subsidy-to-Kenyan-BPOs-extended-3644.html

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Outsource our jobs? Why firms are afraid of BPOs

October 28th, 2009

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Even as Kenya’s business process outsourcing industry continues to grow, companies that are meant to be its customers are becoming its competitors as they shun outsourcing of non-core functions.

Most corporates are, indeed, setting up inhouse (or captive) call centres that handle various customer queries from within, thereby denying BPOs the much-needed business.

This is evident from the list of local firms that have set up their own call centres, among them Safaricom.

Last year, the mobile service provider established its 500-seat call centre.

Others are Co-operative Bank of Kenya, with a 34-seat contact centre and Kenya Commercial Bank, which recently opened a 49-seat contact centre at a cost of $807,692 at its Kencom House headquarters in Nairobi.

The centre will handle customer queries from all its regional operations.

Among the reasons advanced by corporates for not outsourcing are lack of capacity by local BPO operators, confidentiality of client information, trust and quality of service.

Jimmy Masinde, head of KCB’s contact centre, says many businesses believe that customer service should be handled inhouse, and that only tele-sales should be outsourced.

Mr Masinde says call centres can support non-main frame financial institutions like insurance firms but not banks, as information about clients’ accounts is very crucial.

“Outsourcing means no infrastructure, technology and human resource costs… but at what expense to the organisation?” asks Mr Masinde.

He adds that there would be no assurance on quality of service, efficiency and turnaround times.

“BPOs are a recent phenomenon. They are still sourcing most of their work from outside the country.

Many local firms are yet to trust BPOs with their customer service work,” says Mr Masinde, adding that “even developed markets took time to outsource to BPOs.”

“The risk involved in sharing data is the main reason many corporates are not outsourcing customer services. But the proposed credit reference bureau will rectify the situation,” he says.

Many people also prefer being employed by inhouse call centres to independent BPOs due to better terms of service, remuneration and job security.

“Compared to BPOs, the captive centres (inhouse) offer better packages due to their strong financial base,” says Gilda Odera, the chairperson of the Kenya BPO and Contact Centre Society.

A 2008 study on BPOs by the University of Nairobi and the call centre society found that Kenyan BPOs pay operators about $150 and professionals about $500 a month.

To mitigate against high staff turnover, Ms Odera, who is also the chief executive of SkyWeb Evans, a local BPO, says the society is working with the government “to develop a large pool of personnel through training using a $2 million World Bank capacity building allocation to Kenya.”

Statistics indicate that Kenya currently has 29 registered BPOs and call centres, employing about 8,000 people.

The figure covers both captive call centres and independent BPOs.

The country’s BPO seat capacity has moved from 300 seats in 2006 to the current figure, with the government’s goal being to create 30,000 jobs in the sector in the next three years.

The entry of various fibre optic cables in the region will help Kenya tap into the global BPO sub-sector, currently worth over $130 billion.

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