Thursday, May 15, 2008

Africa Has Outsourcing in Its Sights

Source : Click

Like many parts of the developing world, Africa wants a piece of the IT outsourcing market, and while problems in India have opened the way for that to happen, challenges stand in the way of a big breakthrough.

Egypt, Ghana, Nigeria, Senegal and South Africa are all becoming increasingly aggressive in their push to compete with India in outsourcing, as well as with other parts of the world.

"There is an opportunity, India is going to remain the offshore outsourcing leader probably forever, but you never know, and they are losing ground. That market is in trouble because of attrition, companies are plagued by it," said Mindy Blodgett, analyst, enterprise research, business process outsourcing strategies, at Yankee Group, speaking Wednesday at ITU Africa.

Prices are also going up in India, which is a good thing for Africa, and many countries have a time-zone benefit when dealing with European customers.

Several African countries have had some victories in attracting outsourcing business, but to succeed on a larger scale they need to develop a larger, better-educated workforce. If they don't, the large outsourcing companies are not going to want to set up in those countries, according to Blodgett.

Problems with power grids, telecommunications infrastructure, transport infrastructure and unstable governments also must be addressed to varying degrees.

"These are challenges that can't be glossed over," Blodgett said.

International capacity, a talent pool -- both technical and soft skills -- and a good environment for investments, with tax incentives, favorable labor laws, and economic and political stability, sum up the things that Orange Business Services looks for in a country. Orange Business Services has a presence in Egypt.

"Once you get that, the business will come and the customers will come and the money will follow. The demand is much higher than the available resources," said Yasser Radwan, vice president, Customer Services and Operations, Orange, Egypt.

And there is reason for Egypt and other countries to be interested in IT and business process outsourcing, according to Blodgett.

"These are good jobs, these are jobs that often require college education, some kind of training, some kind of certification, they tend to pay well, and it lifts an economy," she said.