Outsourcing in Africa, and Outsourcing in Africa, and it's impact on ICT developmentit's impact on ICT development

Nii SimmondsNii SimmondsChairman Chairman N A F R I C O MN A F R I C O MNations of African Computer and Technology CompaniesNations of African Computer and Technology Companies

www.nafricom.orgwww.nafricom.orgnas146@yahoo.comnas146@yahoo.com

What is What is N A F R I C O MN A F R I C O M ? ?

Nafricom is aiming to be the apex body and umbrella Nafricom is aiming to be the apex body and umbrella organization for IT Software and Technology Services organization for IT Software and Technology Services industry in Africa. Nafricom will aim to list research industry in Africa. Nafricom will aim to list research papers on technology developed by African developers papers on technology developed by African developers and Researchers on Nafricom’s website. The member and Researchers on Nafricom’s website. The member companies of Nafricom are in the business of Software, companies of Nafricom are in the business of Software, IT Services, Internet, E-commerce and IT Enabled IT Services, Internet, E-commerce and IT Enabled Services. Thus Nafricom is not only a Chamber of Services. Thus Nafricom is not only a Chamber of Commerce, but also a single point-reference on any Commerce, but also a single point-reference on any information on IT and Services and Industry in Africa.information on IT and Services and Industry in Africa.

Why I decided to start NAFRICOM?Why I decided to start NAFRICOM?

To establish a portal for Africans to read To establish a portal for Africans to read and learn about African developed IT and learn about African developed IT capabilities and outsourcing. capabilities and outsourcing. www.nafricom.orgwww.nafricom.org

The Indians have The Indians have NASSCOMNASSCOM

Why corporations are outsourcingWhy corporations are outsourcing

Cost Savings!!!Cost Savings!!! Some realize they also want to solve a problem in Some realize they also want to solve a problem in

their supply chainstheir supply chains Most of the savings can be attributed to Labor Most of the savings can be attributed to Labor

ArbitrageArbitrage

Corporations want to hedge against risksCorporations want to hedge against risksi.e. Geopoliticali.e. Geopolitical

Others outsource to be nimble with the changing Others outsource to be nimble with the changing global climate (GLOBALIZATION!)global climate (GLOBALIZATION!)

What is being Outsourced to AfricaWhat is being Outsourced to Africa

BPO - Transcription & Translation (Data Entry)BPO - Transcription & Translation (Data Entry)

IT - Product Design & Architecture Services IT - Product Design & Architecture Services (Software Design)(Software Design)

BPO - Outbound and Inbound sales support (Call BPO - Outbound and Inbound sales support (Call Centers)Centers)

Why Africa ?Why Africa ?

Time Zone and DistanceTime Zone and Distance

Ex-European Colonization (Western Influences)Ex-European Colonization (Western Influences) British, FrenchBritish, French

930 Million citizens, about half speak English930 Million citizens, about half speak English

Cultural CompatibilityCultural Compatibility

Relative Political StabilityRelative Political Stability

Major Country PlayersMajor Country Players

South Africa, Ghana, Mauritius, Senegal, South Africa, Ghana, Mauritius, Senegal, Morocco, Kenya, Cameroon, AlgeriaMorocco, Kenya, Cameroon, Algeria

Corporations Outsourcing to AfricaCorporations Outsourcing to Africa

Unisys, Hewlett Packard, IBM, ACS, DMI, CSC, Unisys, Hewlett Packard, IBM, ACS, DMI, CSC, Global Response, Unilever, Avaya, Global Response, Unilever, Avaya, IBM, AQ Solutions, Global Response, Rising Data, Wipro Spectramind, Infosys, Tata, Infosys, Tata

Lessons Learned - ChallengesLessons Learned - Challenges

Challenges African Nations must start to address

to be considered a viable offshore BPO

destination:

Infrastructure Challenges Countries are starting to realize they need to

develop more ICT capacity Build more education supported IT and Engineering

institutions

Government Support Challenges Establishing eSupport, Tax holidays, and IT parks

Lessons LearnedLessons LearnedInfrastructure Challenges in AfricaInfrastructure Challenges in Africa

Infrastructure Challenges because there is … Infrastructure Challenges because there is …

A lack of a reliable bandwidth provider (ISP) usingA lack of a reliable bandwidth provider (ISP) using SAT-3SAT-3

Must have redundancies (like Eassy cable in East Africa)Must have redundancies (like Eassy cable in East Africa)- The project is driven by 15 telecommunications entities from The project is driven by 15 telecommunications entities from

13 countries of Eastern Africa region.13 countries of Eastern Africa region.

Africa is getting wired with Fiber and wireless bandwidth like WiMax Africa is getting wired with Fiber and wireless bandwidth like WiMax and other new technologiesand other new technologies

A Non-competitive bandwidth market with high costsA Non-competitive bandwidth market with high costs- Governments need to De-license 2.4 and 5 GHz- Governments need to De-license 2.4 and 5 GHz

A lack of telecommunications competitionA lack of telecommunications competition

SAT-2, SAT-3/WASC/SAFE, SEA-ME-SAT-2, SAT-3/WASC/SAFE, SEA-ME-WE, ATLANTIS 2, FLAGWE, ATLANTIS 2, FLAG

Current African Submarine Fibre Connectivity: Mostly “Perimeter”

Sourc

e:

CTiA

Rep

ort

20

02

/03

Eastern Africa Submarine SystemEastern Africa Submarine System

Toliary

Durban

Zanzibar

Malaba

Backhaul links to EASSy CableBackhaul links to EASSy Cable

Germany

Portugal

Brazil

Senegal

South Africa

EgyptMalaysia

Australia

Japan

SEA-ME-WE-4 (35Countries)

SAFE(5 Countries)

ATLANTIS-2(6 Countries)

SAT-3 / WASC(11 Countries)

56 Countries

India

EASSy

(15 Countries)

Strategic Global Coverage

SAT-3/WASC

SAFE

SEA ME WE 3

20

Global ConnectivityGlobal Connectivity

EASSy

General ConsensusGeneral Consensus

Routing local traffic internationally costing the continent about $400 Routing local traffic internationally costing the continent about $400 million a yearmillion a yearIn the case of one of the poorest countries in Africa, its incumbent In the case of one of the poorest countries in Africa, its incumbent telco spends US$3.2 million on satellite transmission, of which telco spends US$3.2 million on satellite transmission, of which US$2.4 million is spent on routing calls within the country and the US$2.4 million is spent on routing calls within the country and the balance is spent on international calls. balance is spent on international calls. Global bandwidth average is between 10 and 12% but a recent Global bandwidth average is between 10 and 12% but a recent report by Balancing Act Africa predicts a 24% growth for the next 3 report by Balancing Act Africa predicts a 24% growth for the next 3 years to 2008years to 2008Exponential growth of voice traffic on the mobile networks in Africa Exponential growth of voice traffic on the mobile networks in Africa in another factor that cannot be ignorein another factor that cannot be ignoreDifferentiate Infrastructure from Services and treat telecom Differentiate Infrastructure from Services and treat telecom infrastructure as other infrastructure like road, water etc.infrastructure as other infrastructure like road, water etc.

Lessons LearnedLessons LearnedGovernment Support ChallengeGovernment Support Challenge

Government Policy Challenges because there is …Government Policy Challenges because there is …

Strong VOIP ambiguity causing tremendous confusion – adds to Strong VOIP ambiguity causing tremendous confusion – adds to perception of riskperception of risk

No independent study of Africa as BPO destinationNo independent study of Africa as BPO destination McKinsey has done some analysisMcKinsey has done some analysis

Inconsistency between various government ministries regarding official Inconsistency between various government ministries regarding official stance on ICT issuesstance on ICT issues

No central organization for BPO-related initiativesNo central organization for BPO-related initiatives Not Yet, but here comes Not Yet, but here comes N A F R I C O M N A F R I C O M and others NGO’S and others NGO’S

What is neededWhat is needed

Create and fund a private BPO development organization and find your Dewang Mehta to run it

Strengthen capital markets

Leverage diaspora communities (In 2000 972 firms in Silicon Valley had an Indian at the

helm accounting for $5 billion sales)

More Foreign Direct investment China is funding Infrastructure development!!!

More Outsourcing vendors and corporations in Africa

Some Great Outsourcing Some Great Outsourcing ResourcesResources

Outsourcing/Offshoring KnowledgeOutsourcing/Offshoring Knowledge neoIT: neoIT: www.neoIT.com www.neoIT.com &&www.neoOffshore.com www.neoOffshore.com TPI: TPI: www.tpi.netwww.tpi.net Outsourcing Institute: Outsourcing Institute: www.outsourcing.comwww.outsourcing.com Outsourcing Center Outsourcing Center www.outsourcingcenter.comwww.outsourcingcenter.com NASSCOM: NASSCOM: www.nasscom.orgwww.nasscom.org Nafricom:Nafricom: www.nafricom.orgwww.nafricom.org Outsource Philippines:Outsource Philippines: www.outsourcephilippines.orgwww.outsourcephilippines.org Global (WITSA)Global (WITSA) www.witsa.orgwww.witsa.org

Africa Telephony and ICT resourceAfrica Telephony and ICT resourcehttp://www.afrispa.orghttp://www.afrispa.orghttp://afix.afrispa.orghttp://afix.afrispa.org

http://enispa.afrispa.orghttp://enispa.afrispa.org http://www.infodev.orghttp://www.infodev.org

http://www.openaccessforafrica.orghttp://www.openaccessforafrica.org

Outsourcing in Africa, and Outsourcing in Africa, and it's impact on ICT developmentit's impact on ICT development

Thanks for your time!Thanks for your time!

Nii SimmondsNii SimmondsChairman Chairman N A F R I C O MN A F R I C O MNations of African Computer and Technology CompaniesNations of African Computer and Technology Companies

www.nafricom.orgwww.nafricom.orgNii.simmonds@nafricom.orgNii.simmonds@nafricom.org