International outsourcing expert sees opportunities for Kenya in post-meltdown world
Sean Moroney, Chairman of AITEC Africa, interviews Jerry Durant, Chairman Emeritus of the International Institute for Outsource Management, USA and keynote speaker at this year’s Outsourcing & Contact Centre Conference, to be held in Nairobi over 11-12 November.
Q: What are the new opportunities available for Kenya’s outsourcing companies on the international market following the financial melt-down?
A. According to the most recent Pulse Survey report by EquaTerra sourcing, opportunities are on the increase as we enter into Q4 2009. These positive signs poise many emerging nations, such as Kenya, to capitalize on buying markets that previously were inaccessible. Due largely to existing contracts the post melt-down situation now has buyers looking to further improve both price as well as service level diversification.
Q: What are the key marketing tools that Kenya’s outsourcing servicing providers need to focus on to promote themselves on the international market?
A. As with most emerging countries, Kenya needs to understand two primary elements. The first is to have a keen understanding of the markets that it wishes to enter into. Without proper study of buying markets and trends, efforts will be wasted. The second area is branding - what should Kenya be known for? This is more than just a logo that identifies Kenya - it is also a service brand for which it is best known. Underlying this is the importance of understanding the level of aspiration that can be attained. All too often emerging countries wish to be an India or a China when they should be focusing on their unique value contribution that they can make to the global sourcing market.
Q: How can a country like Kenya balance its social development objectives with the need for cost-determined outsourcing contracts?
A. The industries that a country promotes all hinge on the needs of developing as a society. In other words, unless the business fulfils the needs of its people then it will fail to flourish. This means that businesses must be able to be profitable, to allow them to develop capital resources for purposes of future growth. Government subsidies help develop the emergence of a market but this cannot be sustained in the long term. Service costs to buyers should not be deeply discounted to get business, they must be fair but also delivered in such a way that consumers recognise value.
Q: Can you identify any specialised outsourcing services that Kenyan companies could focus on to get beyond basic contact centre offerings?
A. The most logical extension to Contract Centre Operations is BPO (Business Process Outsourcing). This can range from document preparation to various specialized services in the financial and operational areas of business. In large part targeting what market that Kenya wishes to focus on will help to drive the service that would be offered. By way of example, Egypt has many outsource companies who deliver travel related outsource services ranging from website creation to trip planning. Kenya could do likewise but may wish to provide these services to markets which Egypt has not yet addressed.
Q: How can Kenya leap-frog the high-volume, low-value services that have come to dominate international outsourcing markets?
A. To operate outside of a trend one must provide a service that is unique. Even within the contact centre realm, there are potential service offerings that can be offered. Niche services often command a different pricing structure and as a result are not prone to high-volume requirements.
Q: What can the government do, if anything, to attract international outsourcing business to Kenya?
A. Governments serve a pivotal role in the emergence as an international outsourcing destination. This can range from market promotion to economic support for business start-up. Understanding the Western buyer is critical. Opportunities are not simply waiting to be gathered, they require ongoing careful cultivation. Most important to buyers is low buying risk. Companies must prove independent viability as a business. Although often supported through government initiatives, these companies must show evidence that they are able to sustain a viable existence. This is key and often the initial measurement point that buyers will examine before a close examination about delivery abilities.
Q: Do you think that international outsourcing can develop in parallel with domestic insourcing, or should the industry focus on purely on domestic outsourcing initially?
A. It is always important to sell close first. The market is better understood, profit margins can be easily controlled, and it can serve as a jumping off point into foreign trade. This is a very sound strategy and one that can easily accommodate a gradual introduction into the market.
Q: Do you think there is any realistic mileage in the notion of Kenya working with other countries to develop a regional, East African or African, brand? Why should this have any marketing impact?
A. Regional co-operation allows for a much larger entry initiative. However, it also comes with it a lack of personal ‘country’ identity. One must remember that Westerners often have perceptions without experience. Only one in 1,000 Americans has ever visited Africa let alone Kenya. As a result they have perceptions often driven by the media which can be totally non-reflective of the business climate in Kenya. It would be hard for many to appreciate the level of work force commitment, technology availability and the service level respect that can be commanded. The other more daunting challenge isn’t just a regional issue, it involves the whole of outsourcing and that is the general lack of collaborative efforts. Fierce competition causes companies, especially at the Tier 3 level, to remain frail. Rather than join, either through collaboration or mergers, they choose to remain fiercely independent. I fear that regional collaborative may fall into a similar situation.
Q: How best can Kenyan companies develop a distinctive brand for themselves in a highly competitive international market?
A. Good word travels fast. Rather than viewing the entire globe as your market, be selective. Develop a dominance, build the Kenyan reputation, and use the good deed to expand. It’s a lot like going on a Safari. A Westerner should never enter the bush in search of wild game without a guide. Likewise, Kenya and Kenyan companies should seek a reputable guide to enter into the hunt. They should utilize the right weapon, not a shotgun (hunting in the entire world) but a rifle (to provide pinpoint accuracy) to hunt that large game. Finally be realistic - don’t hunt the most dangerous game if you have never hunted. Kenya can be successful if it puts forth Kenya and does not try to be someone else.
AITEC Outsourcing & Contact Centre East Africa is being held at Nairobi Hilton over 11-12 November. To register as a delegate email firstname.lastname@example.org or SMS +254-722-521498
Copyright AITEC Africa