BPO in Uganda: The race to become the next India in Africa
January 31, 2014 Editor 0
TechPost caught up with Rogers Karebi, secretary of the Uganda BPO Association as well as the MD of Dial-a-service, a BPO company in Uganda to discuss the current climate for BPO in East Africa and the potential for growth in the region.
BPO(Business Process Outsourcing) involves relocating business processes that a company usually performs in-house to a third-party service provider, such as a customer care or call center, to carry out on behalf of the company. The BPO industry’s focus sectors include financial services, insurance and telecommunications, with outsourced processes including after-sales services, data capture and conversion, accounting, benefits administration, human resource functions, and website design and development.
Business process outsourcing (BPO) and offshoring is a major global trend and the industry, worth an estimated US$130-billion a year, has an expected annual growth rate of about 50% for the next five years. As such, East Africa specifically Uganda, has in recent times strategically set itself up as a BPO hub of choice by beefing up its IT infrastructure, putting significant investment in human capital and infrastructural development. Using a combination of twitter conversations and our on-premise interview with Rogers, here’s how Uganda is poised (or not poised) to be the next BPO destination in the world.
Why Uganda is poised to be the next BPO destination
TechPost: Why do you think that Uganda has the potential to become a global BPO player?
Karebi: Unemployment is still a problem even among the educated youths in Kampala, and there are many opportunities to fill positions by educated workers with excellent English skills. So since our graduates are proficient in English whose accents are neutral (which means agents can be understood by clients in the west), communication is not an issue. A big pool of unemployed graduates means a huge human resource pool. Thirdly, we’ve a time zone advantage. This means while the Americans for instance are asleep, we’re awake working and vice-versa. Great government support and political stability are a huge bonus for BPO.
Kaberi: NITA-U has worked with Makerere University to train 500 youths in MPO skills, and plans are underway to train 3,000 in the next year to ensure a critical mass of BPO trained skills in Uganda. We’re also partnering with India which has several years of experience in the industry. As a matter of fact, we’re signing a Memorandum of Understanding with NASSCOM — a BPO association in India to create capacity building locally.
The challenges of BPO industry in Uganda
TechPost: It is obvious that we’ve not yet seen a huge boom in the BPO sector quite yet. Tell us, what’s still holding us back from tapping into this $130 billion Industry.
Karebi: We’re still struggling with infrastructure — and by this i mean affordable internet broadband and power or electricity. These do not place us at the same level ground as our Indian counterparts who have all these enablers cheaply. For instance, 1Mbps data connection costs about $600 here in Uganda while in India, it’s merely $50! With these unequal variables, you simply can’t compete. The other challenges have to do with policy and regulation. Specially, we still have weak cyber, data and privacy protection laws that are still being developed. International clients need the assurance that the data they’re outsourcing is fully protected under law otherwise they simply can’t give you business.
The local BPO climate
TechPost: When we talk about BPO, offshore clients always come to mind. BPO has been widely (mis) understood to be handling calls or data entry for big American corporations. Have you approached local clients? What has been their response to business process outsourcing so far?
Karebi: Actually the response has been quite promising. Currently as dial-a-service, we handle up to 6 clients which include Pepsi, UMEME, Jubilee among others while our competitors like Tecno Brain handle UNICEF child helpline. BPO is still not known among local companies and that could be attributed to poor marketing. We’ve not done a good job in sensitizing local firms on the advantages of BPO quite well. However, we indeed on holding sensitization workshops that will seek to enlighten prospective local clients on the benefits of BPO. We also have a BPO association which is the umbrella body for all the members.
Kaberi: There’s what is called Knowledge Process Outsourcing(KPO). This is a higher level of outsourcing than the entry-level processing which includes data entry and answering calls. Such individuals with professional skills could actually delve into KPO.
Karebi: There’s a BPO company called SINFA that has a BPO center in Gulu, northern Uganda.
Government and BPO
TechPost: South Africa is known to have one of the most successful BPO destination due to government support. However, At this time, Uganda is not attractive for investment from global outsourcers, due to the lack of tax incentives and limited infrastructure. What is the Government of Uganda doing to fuel the emerging BPO sector?
Karebi: The Government has setup a BPO incubation centre located at Statistics house where we’re currently located. Power and fast Internet is provided for for free for the residing BPO companies until a specific period where these companies graduate of the incubation centre together with another BPO provider. The government, through NITA-U is developing guidelines for the provision of Government incentives to BPO operators, drafting the national BPO strategy and roadmap for Uganda.
Karebi: As a country, to succeed a BPO destination, we need; Government support, political stability and ability to offer high quality service. As a company, professionalism, high quality service delivery and well-trained personnel.
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