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African countries on 2007 list of 50 most desirable outsourcing destinations

July 31st, 2007 Posted in Books/Magazines, Business, General, Politics, Technology, Travel

Dakar buildingsBusinessWeek’s recent article on rising outsourcing destinations highlights what many African entrepreneurs have proposed for years. Outsourcing to parts of Africa can be a win-win situation. The BusineesWeek article refers to consultancy A.T. Kearney’s 2007 list of the 50 most desirable outsourcing destinations worldwide. For the list countries were ranked by a) financial attractiveness, based on such measures as compensation and infrastructure costs; b) a so-called people score, measuring a nation’s people skills, availability of language and educational skills, and the size and quality of the IT industry; and c) their economic/political environment, infrastructure quality, cultural exposure, and IP security. While India remains the top outsourcing destination many African countries are learning from their example. (Note: Scores are in parentheses.)

Rank – Country (overall – financial – people – environment)
#13 – Egypt (5.6 – 3.2 – 1.1 – 1.3)
#25 – Mauritius (5.4 – 2.8 – 1.0 – 1.6)
#26 – Tunisia (5.4 – 3.0 – 0.9 – 1.5)
#27 – Ghana (5.5 – 3.3 – 0.9 – 1.3)
#31 – South Africa (5.3 – 2.5 – 1.2 – 1.6)
#36 – Morocco (5.1 – 2.9 – 0.9 – 1.3)
#39 – Senegal (5.1 – 3.2 – 0.8 – 1.1)

Other factors which add to a countries’ attractiveness are language and education skills and the reliability of a nation’s telecommunications infrastructure. But the the key underlying factor for many African countries’ successful bid for new business is the lack of infrastructure. While the African digerati are continuously ramping up their skills and making themselves available for business they continuously run into infrastructural limitations. But who is to blame? Is it the governments who are overrun with bureaucracy? or the people themselves, who often do not hold their leaders accountable?

Offshoring upstarts are making so many inroads, in fact, that by 2012, they’ll significantly dilute India’s dominance, says consultancy Gartner (IT). The consulting firm says that by 2010 about 30% of Fortune 500 enterprises will outsource to three or more countries, from less than 10% today. “So many governments have realized what an opportunity this is and there’s a lot of effort being spent in promoting their countries to the market,” says Johan Gott, manager of A.T. Kearney’s Global Services Location Index.

…Kenya, for instance, is trying to become a destination for business process and IT outsourcing. The Kenyan government has worked in recent years to liberalize its telecom sector, which has lured more operators and helped drive telecom services prices down by 70% in a short time, according to the World Bank. Yet the country relies on satellite connections to link to the rest of the world. That makes it costly for outsourcers to do business.

(photo source)

  • http://www.protocolinpractice.co.za Karen Lotter

    This is a very informative article, thanks very much.

  • http://www.annansi.com Kofi

    Karen,
    I’m glad this information was beneficial to you. Thanks for your comment.

  • Pingback: Tunisia

  • Sseruyange David

    Thanks for the good research always .I enjoy the infomation I always find here.Keep going guys

  • http://www.dcglobal.us BPO Specialist

    Due to the trends of the economic global crises , it is now cost effective for the most companies to outsource their employment needs to developing countries with high labor rate. With this in mind, it can be expected that the BPO industry would surely stay for a much longer time.

  • http://www.openaccessmarketing.com/ inbound call centers

    Those are very interesting countries to venture in to. It is amazing that most of them are African countries. We hope that it will drive more business opportunities in their countries.

  • http://www.kpo.com KPO Services

    When it comes to outsourcing, Africa has a clear strategy. Africa certainly has a role to play in the present climate of global sourcing and ‘right shoring’. Single geography outsourcing is largely a thing of the past, having given way to a lower risk, more customer-focused global delivery model and tiering of processes. Whilst there is no doubt that Asia offers an excellent cost value proposition for high volume, low complexity business processes, Africa can step up to the plate on delivery of lower volume and higher complexity processes. It offers a real, cost effective, nearshore alternative for European and American companies who may simply not wish to have customer facing processes run out of Asia. If Africa can really put its money where its mouth is, a currently fledgling BPO&O industry certainly has the potential to take off and carve out its niche in the global delivery model.

  • http://www.openaccessmarketing.com Call Center Outsource

    Well said – I'm totally with you on this topic.Several African nations have joined the BPO bandwagon. Certain percentage of Africa's population is also capable of speaking French, which means that the country has the capability to attract various types of French BPO jobs as well. This also means that this African country is going to offer multilingual outsourcing services to its clients. African countries are always known for their cost effectiveness. They can deliver spectacular result at a lowest cost. Egypt, Kenya and South Africa have displayed excellent performances. Therefore Africa is confident to perform better in this field. Africa has the potential to become one of the preferred BPO destinations in the world.

    Josh

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