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1. Executive Summary ......................................................................................................... 4
2. Business Process Outsourcing and Off-Shoring .............................................................. 5
2.1 From BPO to KPO................................................................................................... 5
2.2 Current Developments.............................................................................................. 6
2.3 Structural changes: the end of captive centres ......................................................... 7
2.4 The Global View...................................................................................................... 8
2.5 Success factors ......................................................................................................... 9
3. The European Market....................................................................................................... 9
3.1 Overview.................................................................................................................. 9
3.2 A brief view on the main European IT service markets......................................... 10
3.2.1 Germany...................................................................................................... 10
3.2.2 France.......................................................................................................... 10
3.2.3 UK............................................................................................................... 10
4. The potential of the Sub-Saharan Countries .................................................................. 11
4.1 The current players................................................................................................. 11
4.1.1 South Africa................................................................................................ 11
4.1.2 Mauritius..................................................................................................... 11
4.1.3 Ghana.......................................................................................................... 12
4.1.4 Senegal........................................................................................................ 13
4.2 Potential newcomers .............................................................................................. 13
4.2.1 Kenya.......................................................................................................... 13
4.2.2 Botswana..................................................................................................... 14
4.2.3 Nigeria ........................................................................................................ 14
5. Developing a Strategy.................................................................................................... 15
5.1 Recommendations .................................................................................................. 15
6. References ...................................................................................................................... 17
4
1. Executive Summary
The global off-shoring market has matured over the past decade and reached an esti-
mated volume of $30 billion in revenues over the past two years, where India and the
Philippines account for 50% of the world-wide BPO market.
The share of this market by Sub-Saharan countries is small, but a number of them have
established a good position on the international ranking index.
This report provides an overview of the current developments and future trends in the
field of Business Processing Outsourcing and analyses some of the most important Sub-
Saharan countries. From this analysis it concludes with some recommendations of how
to support the development in the selected countries to increase their competitiveness in
the current BPO markets and at the same time highlighting the importance to move to
Knowledge Process Off-Shoring services in the future.
November, 2009
5
2. Business Process Outsourcing and Off-Shoring
Business Process Outsourcing and Off-shoring has been quite popular in the US for a
long time and is receiving rapidly increasing attention in Europe. On the IT side, Out-
sourcing started with data entry services many years ago and then moved to more com-
plex services (e.g. pay roll administration) and has currently arrived at smart sourcing,
where not only business processes are outsourced, but parts of the business as well (in
form of partnerships) allowing the outsourcing company to concentrate on their core
business. Outsourcing, in whatever form, does not automatically imply outsourcing to
other (and cheaper) countries. Business processes are often outsourced to companies in
the same country, in particular the more complex processes. Increasing complexity of-
ten goes hand in hand with increased sensitivity of the related data and companies pre-
fer to outsource them to service providers close by they not only can trust but also eas-
ily check.
Off-shoring refers to the acquisition of intermediate inputs by companies from locations
outside the consuming country. It is the crossing of international borders that distin-
guishes it from outsourcing in general. It is important to realize that this phenomenon is
not new and has been going on since at least the industrial revolution. It is effectively
synonymous with the distribution of labour and with companies remaining competitive
and cost-conscious while specializing in what they do best. What is new, however, is
that information and communication technology (ICT) in recent years has made out-
sourcing of whole new types of services possible. IT and cheap communication today
facilitate companies to outsource most things that can be reproduced/conducted in digi-
tal form, such as IT support, back office (payroll administration and accounting), call-
centres, software programming, and some R&D functions. Similarly, ICT has enabled
additional outsourcing in goods manufacturing, as intermediate inputs can now be
seamlessly sourced from multiple suppliers.
1
One highly popular type of outsourcing is the Call Centre market and although only a
small percentage of Call Centre activities is outsourced and off-shored, it is a large and
highly competitive market. It is interesting to note that the demand for call centre agents
in India has grown so fast that the labour supply has been unable to keep up with it: by
2009, the demand for agents in India is projected to be over 1 million, and more than
20% of those positions will be unfilled because of a shortage of available skilled la-
bour.
2
2.1 From BPO to KPO
There is no clear definition of the processes that are usually out-sourced and off-shored
under the term 'BPO'. But it is
generally accepted that these
encompass processes that re-
quire a low to medium-skilled
workforce at the off-shoring
destination. It is important to
note that these off-shoring
services provide little to none
added value for the countries
providing them, apart from
proving jobs. At the same
Data entry /preparation
Document management
Data processing
Forms and report generation
Card processing
Inbound only
Inbound/outbound
Outbound only
General back-
office
Consumer
Contact
Business
Process
Outsourcing
6
time, working at off-shore service providers does not provide any career view for the
employees and hence the attrition rate is usually very high. Furthermore, the attractive-
ness of an off-shore location for these types of services hinges almost entirely on the la-
bour rate.
Countries like India have reacted to this situation by moving increasing into the domain
of Knowledge Process Outsourcing where the main indicator of competitiveness is the
skill level of the local workforce. Off-shoring is no longer simply about obtaining low-
cost resources elsewhere; it is now about accessing specific types of talent and gaining
entry points to serve new and broader markets. Global companies are now incorporating
off-shoring as part of their forward-looking strategies rather employing it as a knee-jerk
reaction to cost pressures. Encouraged by the early success of off-shoring in the ITO
and BPO sectors, companies are increasingly exploring the value of sending high-end
processes offshore, including ones that directly affect their revenue generation capabili-
ties. Typical Knowledge Process Outsourcing services are
3
:
Type of Activity Examples
Investment research: equities, derivatives, credit research,
valuation and accounting
Financial modelling
Company, industry and sector reports
Credit risk management
Normalizing accounting standards
Valuation of companies
Equity and Finan-
cial Research and
Analytics
Tracking of stock markets and analysis thereof
Market Analysis: market segmentation, marketing stimulus and
spend optimization, need gap analysis, market mapping
Data mining: mining the Internet, databases and company web-
sites and preparation of reports with analysis, data processing
and analysis
Report preparation: company and sector reports; editing and
formatting of reports
Business and Mar-
keting Research
and Analytics
Customer Analytics: customer satisfactions surveys, customer
and segmentation, price sensitivity/pricing analysis, benchmark-
ing
Very Large Scale Integration (VLSI) design
Simulations
Chip design
Vehicle design support
Engineering and
Design Services
Prototype development
Offshore drug discovery
Pharmaceutical re-
search outsourcing
Clinical research
2.2 Current Developments
North American companies still account for about 70% of offshore outsourcing spend-
ing, but Europe is catching up with their spending on off-shoring is rising faster than
that of their counterparts in North America. However, the interest from Europe is more
in near-shore locations where English is not the dominant language, including locations
7
in Central and Eastern Europe, and the Middle-East and North Africa. Sub-Saharan Af-
rica is not in the main focus of European companies.
The economic crisis has affected the off-shoring business as well, but the full effects are
still not clear. For example, the Indian software association NASSCOM states:
After several years of unbridled growth, the Indian IT-BPO industry is fac-
ing a challenging global economic environment as a result of the crisis in
the US that has impacted the international financial services sector and
credit markets. While timely Government intervention and a series of bail-
out packages are expected to stabilise Western economies, the current un-
certainties are expected to persist until market conditions improve.
The recessionary wave sweeping the world, however, is having a direct
bearing on the outsourcing industry in India, with demand dipping as global
companies adopt a wait and watch approach. While the economic down-
turn has compelled companies to relook at their outsourcing strategies in a
bid to cut costs, the interesting fact remains that outsourcing can in fact help
organisations tide over tough times and maintain competitiveness.
4
The value of new off-shoring deals signed worldwide during the three-month period be-
tween October 2008 and January 2009, as reported by research service Datamonitor,
declined by 38% compared to the same period the previous year. Compensation has
been frozen among several outsourcing providers in India and attrition rates have
dropped in half compared to the previous year - sure signs that the industry is slowing
down.
5
The Plunkett Research reports
6
:
As of mid-2009, outsourcing of BPO and other services was continuing to
suffer a difficult adjustment due to the global recession. For example, the fi-
nancial services industry was one of the largest industry sectors that had
turned to outsourced call centres. The downsizing of the global banking and
investment sector meant a significant reduction in the need for services. In
other types of services, such as BPO and knowledge management, major
providers of outsourced services reported that clients were delaying or can-
celling projects in large numbers.
2.3 Structural changes: the end of captive centres
Numerous large organisations had created their captive centres in off-shore location.
Captive Centres can be best characterised by:
Dedicated set of resources offshore
Created specifically for the parent
100% dependant on parent for business
Commercial relationship is time and material
True extension of onshore teams
Apart from the expected cost effectiveness they were mainly motivated by control as-
pects (concerning people, processes, technology ), and IP considerations. However
many captive centres failed to contain costs efficiently and more companies are opting
to buy the services they need from outsourcing providers. For example Citibank sold
their captive operations to Tata Consultancy Services and Philips to Infosys. Such move
increases flexibility on both sides and in particular the service providers are rapidly in-
8
creasing their global footprint to seek for talents in new markets as their home locations
cannot supply the needed labour force. As Nimish Soni, CEO - BPO Division, Cam-
bridge Solution, said when asked what the best happenings in 2008 were: "The exit of
the captives the inefficiencies of the captives finally pull them down. The captive
model is now dead."
2.4 The Global View
The most comprehensive view on the off-shoring business, or Global Services, is pro-
vided by A.T. Kearney. Since 2004 the Global Services Location Index is prepared on
an annual basis ranking the top 50 off-shoring countries world-wide. The index metrics
are based on three categories: Financial Attractiveness (covering compensation cost, in-
frastructure cost, and tax and regulatory costs), People Skills and Availability (includ-
ing for example labour force availability, education and language and attrition risks),
and Business environment (including amongst others the infrastructure, security risks,
and security of intellectual property). Data are collected from a variety of sources in-
cluding client engagements, and should not be viewed as absolute figures. Countries
that are not on this list should by no means be ignored; they can be highly attractive for
specific clients or services. Furthermore, the off-shoring market is highly dynamic with
changing patterns of demand leading to considerable fluctuation of the position of
smaller countries in this index. While the big players have maintained their position
since 2004, a number of countries have dropped off the list while others entered.
The above figure highlights the Sub-Saharan countries (red) and the North-African and
Middle-East ones (yellow) that can be considered as the strongest competitors for
European clients.
Compared with the 2007 Index Mauritius has maintained its rank (25), while Ghana
moved up from rank 27 to 15 and Senegal from rank 39 to 26. South Africa has
dropped from rank 31 to 39, after it lost points in all three categories with the deteriora-
tion of the infrastructure being the most striking drop among the individual metrics.
While the top three countries - India, China, and Malaysia - maintain there safe position
in the 2009 index, the Middle East and North Africa region is emerging as a hot off-
9
shoring destination for the world. They have a large and well-educated population, low
costs and are close to Europe. Egypt is now on rank 6 - up from rank 13 in 2007 - and
before the Philippines, Jordan moved up from rank 14 to 9, and Tunisia from rank 26 to
17.
2.5 Success factors
Low compensation rates, high education standards or favourable business environments
are without doubt a prerequisite for attracting off-shore business, but are no longer suf-
ficient to ensure success. Regional Off-shoring has become an important factor in order
to gain more independence from large international clients. Just as it makes sense for
advanced economies to trade business services with lower-cost countries, it also makes
sense for low-cost countries to off-shore to each other. For example, Egypt has supplied
skilled migrant labour to the Gulf region for many years but now is gradually changing
to remote delivering from the home country, and Saudi software companies have estab-
lished the IT development centres in Cairo.
Mauritius is a service exporter to Europe and now several local Mauritius BPO compa-
nies that provide services for France have opened their offshore centres in Madagascar,
hiring French speaking workers at significantly lower cost. Consequently, for smaller
countries and newcomers in the field it could be much more profitable to enter the BPO
business by providing off-shore services to other off-shore countries than directly to the
European or North American clients.
3. The European Market
3.1 Overview
Publicly available information on recent markets trends for BPO from Europe is no
longer available. Market reports are offered by numerous market research organisations
but for a very high price
7
,
8
.
However, there are some data available that give at least a view on future development
and prospects in this field.
The outsourcing market: European perspective: European off-shoring expenditure (%)
in 2005:
GB/IE
72%
DE/AT/CH
9%
FR
8%
Other
11%
10
Outsourcing remains the fastest growing market trend in Europe and there is a clear
tendency towards smaller and shorter projects.
The typical growth drivers in outsourcing are
- Application management outsourcing
- Network and desktop outsourcing
- Information system outsourcing & hosting infrastructure services
In general Off-shoring is becoming an important element of IT services delivery with
considerable growth of this IT off-shoring market in Europe with an expected
16.5%/year until 2009. There is also an important and still largely untapped market po-
tential with SMEs, who are increasingly interested in outsourcing and off-shoring.
3.2 A brief view on the main European IT service markets
3.2.1 Germany
Continuous and stable growth track:
4.7% (2006)
5.0 (2007)
Growth driver: outsourcing (ca. 10% growth in 2006)
Market volume outsourcing: 14 billion (2006)
Motivation for outsourcing:
IT staff shortage
Reduction of market risks
Cost pressure & international competition
Important target market: SMEs
Off-shoring preference: near-shoring/Eastern Europe
3.2.2 France
Stable growth track:
5.5% (2006)
5.8% (2007)
Outsourcing market is growing but companies still reluctant to outsource because
of cultural barriers and labour laws
Outsourcing market bound to grow dynamically due to:
Cost pressure
IT staff shortage
Focus on BPO
Vertical drivers: banking and insurance industry
3.2.3 UK
Solid growth but on a smaller scale:
5.9% (2006)
5.6% (2007)
Mature market but still the most dynamic and advanced outsourcing market in the
EU
70% of European off-shoring spending in the UK & Ireland (2005)
Off-shoring preference: India
11
4. The potential of the Sub-Saharan Countries
A number of Sub-Saharan countries are active as BPO providers and some have made it
into the league of the top 50 outsourcing hubs world-wide.
However, detailed information about the type of services, the volume of contracts, or
the expected market development is very sparse. This chapter gives a brief overview of
some countries that are known as successful players, based on publicly available infor-
mation.
4.1 The current players
4.1.1 South Africa
South Africa is by far the strongest play in the BPO field in Africa. The prediction in
2007 was the South Africa is expected to nearly double the number of contact centres
they had in 2003. It had brought the country on a respectable rank 31 in the Kearny In-
dex in 2007. However, South Africa dropped to rank 39 only two years later, loosing
points on all the three Kearny categories. The deterioration of the infrastructure was the
most striking one.
Currently, the government is backing huge infrastructure investments in advance of the
2010 FIFA World Cup which South Africa will host, and those can only aid the off-
shore outsourcing case. So there is a chance that South Africa moves some ranks higher
again in the coming years.
In 2006 DTI launched a Business Process Outsourcing Sector Support Programme in
South Africa, since despite its success in BPO it faced a number of critical challenges:
- a shortage of entry and middle managers;
- higher cost of operations than key competitors;
- negative perceptions of operational risks;
- relative difficulty in setting up new operations in South Africa;
- some restrictive regulations;
- a limited number of BPO service vendors with major anchor clients;
- an uncompetitive and comparatively expensive technology infrastructure; and
- an ineffective marketing effort.
The results of this support programme as at March 2008 are as follows:
Objective
Actual at March
2008
Target to Dec
2009
Firms attracted or expanded 9 43
Jobs created 39 936 109 852
People trained 17 279 35 000
4.1.2 Mauritius
Mauritius, despite having the smallest labour force in the index, ranks well at 25 be-
cause of strong people skills and favourable business environment. According to the
World Bank, it is the 24
th
most attractive business environment globally. Large compa-
nies like Accenture and Infosys also use Mauritius for their global delivery functions.
12
Mauritius has developed a National ICT Strategic Plan (2006 2010) to achieve the vi-
sion of the Government to make the ICT sector the fifth pillar of the economy and Mau-
ritius a regional ICT hub.
Major BPO Services in Mauritius:
The development of the BPO Industry in Mauritius has been quite rapid until 2007; fig-
ures relating to 2009 are not yet available.
4.1.3 Ghana
Ghana, the Sub-Saharan pioneer in IT and off-shore services, is doing exceptionally
well, now positioned on rank 15 - up from 27 in 2007.
In 2003, the MoC issued a policy for the overall ICT sector. The objective of this ICT
for Accelerated Development (ICT4AD) policy is to engineer an ICT led socio-
development process with the potential to transform Ghana into a middle income in-
formation-rich, knowledge-based and technology-driven economy and society. The
ICT4AD policy outlined some of the initial steps being adopted by the government of
Ghana to increase the ICT competitiveness of the country.
With one of the most competitive demographics in the ITES-BPO world, Ghana has the
potential of developing itself as the preferred ITES-BPO destination in the region. The
country benefits from a stable and supportive political scenario as well as a latent talent
13
pool which, if trained, can provide the necessary scale for growth of the industry.
However, to achieve the desired success, Ghana will need to develop cost-effective and
suitable infrastructure, Moreover, the country will need to develop the talent pool, as
well as introduce the necessary policy and regulatory frameworks.
The Ghana Association of Software and IT Services Companies (GASSCOM) is
Ghanas premier trade association for the IT software and services industry. GASS-
COM is registered as a non-profit company limited by guarantee under companys code
of the Republic of Ghana. GASSCOM's member companies are in the business of soft-
ware development, software services, IT-enabled/BPO services and e-commerce.
4.1.4 Senegal
Senegal's strengths as an off-shore location are mainly due to its financial attractiveness
and a favourable business environment, but it suffers under a low availability of people
and skills.
At present (2008), there is a dozen call centres active in the country, most of which spe-
cialized in telemarketing. Altogether, they have 1200 seats and employ some 2200 staff.
The largest one, the Premium Contact Center International (PCCI), accounts alone for
60% of seats, and it employs about 1,000 people. The others are mainly medium-sized,
ranging from 100 employees, Center Value, Africatel AVS, to 200, like Call Me. There
are also smaller ones such as Senetel, 20 employees, and Quality Center, 40 employees,
the latter being the only one not based in Dakar, but in St. Louis. The BPO sub-sector is
instead not very developed. There are just few players active in database management,
financial and accountant services and other back-office operation. The largest company
in this segment is Global Outsourcing who employs more than 300 staff, while other
players, like SESI, Jouve Sngal, Senescan, and Sinti Senegal have from 40 to 80 em-
ployees. PCCI as well, has recently diversified its activities to include some BPO ser-
vices. The interest in this field is indeed increasing, and large international players are
more and more interested to open offshore facilities in the country. For instance,
TRGa group with 1,000 centres worldwidehas recently inaugurated a 300-seats fa-
cility in Dakar, which will provide a vast range of BPO services.
4.2 Potential newcomers
4.2.1 Kenya
The National ICT Strategy issued by the government of Kenya in January 2006, under-
line the key role of call centres and business process outsourcing services (BPO) to
achieve the strategys goal of making Kenya the ICT capital of Africa.
According to the plan, outsourcing can contribute to create some 30,000 jobs in the near
future. The National ICT Strategy has been adopted by ICTPark, a consortium of local,
regional, and global organizations working together for the development of ICT sector
in Kenya. The consortium focuses on facilitating the development of BPO and call cen-
tres in Kenya by working in close relation with facility owners, business operators and
outsourcing clients.
Kenya BPO and Contact Society (KBPOCCS) is the private sector association repre-
senting the needs of the Contact Centre and Business Process Outsourcing industry in
Kenya.
The Kenyan government has created the right environment for the BPO sector to take
off, particularly through investing in an undersea-fibre cables. In July 2009, SEACOM
14
went live in several African Countries including Kenya. When the TEAMS cable goes
live later this year, and the EASSY cable goes live next year, Kenya will have an abun-
dance of high speed internet connectivity to the rest of the world. Internet are expected
to drop by as much as 70% in due course.
4.2.2 Botswana
In 2007 Botswana published an edited draft of their proposed National Information and
Communications Technology Policy to provide Botswana with a clear and compelling
roadmap that will drive social, economic, cultural and political transformation through
the effective use of Information and Communications Technology (ICT) in the years
ahead. The Policy complements and builds upon Vision 2016 and provides many of the
key strategies essential for achieving Botswanas national development targets.
One of the Policy Recommendations under 'ICT and Economic Diversification' is to
"support the introduction and growth of Business Process Outsourcing (BPO) within
Botswana. Although the economic upside to this endeavour is extremely positive, there
are considerable challenges in areas such as lack of skilled workers, lack of call centre
management expertise and inadequate physical infrastructure. These challenges are
very similar to those mentioned in other ICT key programmes and highlight the critical
need for continuous investment in infrastructure, education and skills development."
The potential for Botswana to benefit from the development of BPO/call centre opera-
tions had been under discussion since 2004 when the IFSC (Botswana International Fi-
nancial Services Centre) conducted a diagnostic study on the sector. Subsequently, Out-
source Botswana was founded as a private sector representative association in 2006,
aiming at promoting the BPO and Call Centre industry in Botswana through public
awareness. The 'Botswana International BPO & Call Centre Conference 2007' was held
in July 2007 but apparently no tangible activities have followed since. One of the main
problem seems to be the low and expensive bandwidth under which the country still
suffers.
4.2.3 Nigeria
In 2007 the Nigerian government had appointed the National Information Technology
Development Agency (NITDA) as responsible for the execution of a National Out-
sourcing Strategy. It also announced that it will hold the first Nigerian International
Outsourcing Conference in Abuja over 21-23 March, 2007, as a platform to launch the
this National Outsourcing Strategy.
However, nothing much seems to have happened since. Sean Moroney, Chairman of
AITEC Africa, said in an interview9 in November 2009: "In Nigeria, which should be
the powerhouse of Africa, the lack of electrical power drives up costs as all enterprises
have to spend huge amounts on diesel for their own generators. Further than that, Nige-
ria has an appalling service culture, partly inherited from its history of military regimes,
partly from an arrogance derived from its oil wealth, where its enterprises feel they do
not have to deliver service to earn and retain customer support. For example, Nigeria
has made very little effort to develop a tourism industry. In contrast, Kenya has a thriv-
ing tourism industry, which is highly service-oriented and this feeds well into another
service industry like outsourcing. "
15
5. Developing a Strategy
A clear picture of the BPO potential in the Sub-Saharan countries has not yet emerged.
However, two main problem areas are clearly visible:
- All countries still suffer under inadequate IT infrastructure and expensive tele-
communication costs. To address these problems, African governments have
come up with bandwidth subsidies to help guarantee survival and aid competi-
tion with cheaper destinations such as India and the Philippines. But this does
not work everywhere, for example in Ghana there is no bandwidth subsidy.
- Sub-Saharan countries have been quite successful with simple BPO operations
like call-centres but are loosing out against the Indian and Asian competition
with respect to higher value processes, since there is a shortage of skilled human
resources. Training or support programmes like the one carried out by DTI,
South Africa, should be carried out in other countries as well.
A strategy to foster BPO between European and Sub-Saharan Africa, to be imple-
mented by a support agency like CDE, is not obvious. Training programmes that train
thousands of people would certainly be helpful, but are clearly too costly. Infrastructure
problems and provision of sufficient and affordable bandwidth need to be addressed by
the target countries and could possibly be supported by large development aid pro-
grammes.
This leaves the 'marketing' aspects. Apart from South Africa, most countries have a
relatively small potential for BPO, which could of course be developed in the future,
provided they can attract sufficient customers. However, most Sub-Saharan countries
are not very well known in Europe, which makes it very difficult to market their ser-
vices, in particular to smaller clients.
The competition with India, China, and other big players is obvious, but these are play-
ing in a different league, not necessarily addressing smaller companies in EU who have
a need for BPO. So in that sense, this competition is not as critical as it may seem.
However, there are new competitors coming up, first of all Egypt, but also in other
MENA countries. In particular with a view on European customers, the MENA region
can be considered as Near-shore and hence more attractive. As described earlier, there
is a new move of "Sub-outsourcing", or as it is also called "expanding the global foot-
print". Again, India is leading in this respect by off-shoring their work to smaller coun-
tries, including African ones. But also African outsourcing locations, like Mauritius,
outsource some of their work to other neighbouring countries, in this case Madagascar.
Such move is indeed a chance for many Sub-Saharan countries as it does not require di-
rect marketing of their services to the end clients - say in Europe - but to BPO service
providers in their own geographic and cultural vicinity.
5.1 Recommendations
A more intensive approach of promoting BPO between Europe and the sub-Saharan
countries in general - as originally foreseen - would be very difficult due to the large
differences across the two regions - both in terms of market demands and services of-
fered - and probably not of any significant value.
There are a number of successful BPO activities in several sub-Saharan countries, but
there seems to be little or no real support by agencies or ministries. Hence the business
that is being done in this field is based on individual contacts and the success cases that
exist are not due to any form of policy support or state-driven initiatives.
16
Furthermore, a sufficiently homogenous situation across the sub-Saharan countries (for
example in terms of human resources, skills, or infrastructure) does not exist, which
makes a general approach of promotion of BPO difficult if not impossible. A similar
situation can be observed in Europe, where the attitude towards BPO varies quite sig-
nificantly from one country to the other.
Therefore, it might be more beneficial to focus on one or two African countries, where
BPO activities already exist and which could provide a more promising entry point for
deeper analysis and subsequent promotion.
As mentioned earlier, the classical BPO market, and in particular the flourishing call
centres, produces only little added value to the economic development of the countries.
The long-term aim should be to help the Sub-Saharan in moving to higher level proc-
esses, from fro example software development services to the full scale of Knowledge
Process Services.
Hence, fostering BPO in the Sub-Saharan countries should focus on the following is-
sues:
1. As a first step, addressing some of the countries that already have a proven off-
shoring potential, like Ghana, Senegal, Mauritius, and possibly Kenya.
2. Initiate a policy dialogue with those ministries or governmental agencies that are re-
sponsible for the telecommunications network to develop a preferential tariff system
to strengthen the position of the current BPO service providers. Bandwidth costs are
one of the main factors that determine competiveness in the global BPO market.
10
3. Assist the main players in the selected countries to develop a market strategy that
focuses on "sub-off-shoring" with the larger global companies for example in India.
This would allow them to strengthen their positions and give more weight towards
potential EU clients.
4. Launch a targeted awareness campaign on the different types of BPO to raise the
level of services in the future and develop a perspective to capture the KPO market.
As this would not only require different marketing approaches but also higher skill
levels, such campaign should address both service providers and through a targeted
policy dialogue the education ministries.
17
6. References
1
Jacob Funk Kirkegaard: Outsourcing and O shoring: Pushing the European Model Over
the Hill, Rather Than O the Cli. Working Paper WP 05-1 March 2005, Institute for In-
ternational Economics, Washington
2
Aksin, Armony, and Mehrotra: The Modern Call Center. Production and Operations
Management 16(6), pp. 665688, 2007, Production and Operations Management Society
3
TPI Research Report, Technology Partners International, Inc., July 2007
4
NASSCOM : Annual Report 2008-09. See www.nasscom.org
5
The Shifting Geography of Offshoring. The 2009 A.T. Kearney Global Services Location
Index. A.T. Kearney, Chicago 2009
6
Plunkett Research Ltd, 2009, http://www.plunkettresearch.com
7
Western European BPO Market Estimates 2008 and Forecasts 2009-2013
Published by: IDC
Published: Apr. 16, 2009 - 21 Pages
US$ 6,400.00
Abstract
This IDC study forecasts market demand in Western Europe for "key horizontal" BPO services
(customer care, finance and accounting, human resources procurement BPO) and for the period
2008-2013. This IDC study gives decision makers information on:
The size of demand for providing key horizontal BPO services in Western Europe in 2009-2103
IDC's predictions and assumptions concerning the drivers shaping the Western European BPO
services market, and what impact they have on demand development Key recommendations for
vendors from IDC for maintaining and growing BPO services revenues in the coming years
Overall, demand in Western Europe for "key horizontal" BPO services continues to grow, albeit
at a slightly lowered rate than in our previous forecast published in December 2008. IDC is fore-
casting a CAGR of 6.9% for the period between 2008 and 2013, including the relatively slow-
growing HR processing market. Excluding HR processing services), IDC is forecasting a CAGR
of 9.4% during this period.
"While economic recession makes many enterprises more interested in adopting BPO, it simulta-
neously restricts the cash they have for investing in new outsourcing projects and it makes many
executives more risk-averse," said Douglas Hayward, research manager at IDC. "The bottom line
is that BPO demand remains relatively strong, but economic recession has taken demand growth
down by about a percentage point of growth."
8
Call Center Outsourcing in Western Europe
Published by: Datamonitor
Features of this market research:
- Direct strategic recommendations for vendors either already present, or looking to enter,
the Western European outsourcing market.
- Complete market sizing and forecasts across geographies, verticals and presented in
value, number of call centers and agent positions.
- Coverage across the ten key vertical markets in the outsourcing space with year-on-year
comparisons of growth.
- Key trends in technology, product, pricing and business drivers are identified and dis-
cussed.
102 pages
3.395,00$
Reports among others on:
OFFSHORING `
Key findings
Offshore outsourcings impact on Western Europe
18
The market by country
UK
France
Benelux
Spain
Germany
Italy
MARKET FORECAST AND GROWTH
Introduction
Key findings
Western Europe as a whole
Outsourced call centers in Western Europe
The value of the market
Outsourcing traffic in Western Europe
Traffic by business function
The Market by vertical
Vertical sizing
Vertical focus
9
See: http://www.aitecafrica.com/news/view/94
10
The success of Egypt as a major call-centre service provider is due to the decision of the
Communication and IT Minister to substantially reduce the bandwidth cost for the first
call centre Xceed, at a time were the standard rates were prohibitive for this type of in-
dustry.