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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
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