Roar of the sleeping giant – It’s time for Africa.
Head of Pre Sales, iSON Xperiences
Let’s start this article with a story from far away India. Over the last 20 years, India has become the world's favored market for Business Process Outsourcing (BPO) companies, among other competitors, such as, Philippines, Brazil, Hungary, Canada, Australia, Ireland etc. The A T Kearney’s 2016 Global Services Location Index (GSLI) study rated India as number one out of the total 55 countries in the list. According to study, Offshoring to India remains a highly attractive proposition for many global companies. As per Gartner, the cost advantages of outsourcing from India are noteworthy as it costs less than US$ 7,500 per annum for a call center agent in India (cost to company) as compared to $ 19,000 in the US and US$ 17,000 in Australia. That is well over a massive 50% costs reduction for the customers outsourcing their business processes to India.
Research by the National Association of Software Services and Companies (NASSCOM), India, has revealed that quality orientation among leading BPO companies, 24/7 services, India's unique geographic location and the investor friendly tax structure, creation of special economic zones, availability of world class IT/ non IT infrastructure etc. have all made the BPO industry in India very popular. The Indian BPO sector employs over 3.5 million people directly and provides indirect employment to another million or more – through ancillary industries dependent on the IT-BPO sector. The BPOs in India handle 55% of the global outsourcing market. The annual revenue of the Indian BPO market is more than $26 Billion and contributes around 1% of the GDP.
How did this astounding success story begin?
The New Telecom Policy in 1999 and the de regulation of the telecom industry in India introduced IP telephony, ending the monopoly of the state owned companies on international calling facilities. Some big global MNCs like GE, Amex, British Airways, pioneered the ITeS – BPO industry by starting their large captive operations in India during the same period. NASSCOM too, played a crucial role in coordinating; consulting with various issues in the sector during initial days, and acted as liaisons between central and state governments, and the industry.
During the same time, some VC backed Indian companies like Spectramind, 24/7, Daksh started the BPO business journey, looking at the early success of the MNC with their captive units. There was enough space for all – be it the MNC captives or Indian 3rd party outsourcing companies. The industry witnessed growing trend of emergence of large MNC captive units and 3rd party vendors. Many BPO companies started mushrooming in the govt. enabled favorable business environment and improvement in IT/connectivity infrastructure – companies like Convergys, Accenture, HCL BPO, Infosys BPO, Mphasis, Wipro BPO ( BPO arms of the trailblazing Indian IT companies) were set up and delivered superior business results for the off shore clients. As of now, there are over 400 BPO companies in India and it corners more than half of the global outsourcing business. The industry grew exponentially and rest is history.
Africa – The sleeping giant out of its slumber…
Africa is the world's second-largest and second-most-populous continent. It is so huge that it covers almost a quarter of the total land mass of the world. With 1.1 billion people as of 2014, it accounts for about 16% of the world's human population. Africa's population is the youngest amongst all the continents; the median age in 2012 was 19 years, when the worldwide median age was 30 years. So, it is a great, positive irony that Africa, widely accepted as the place of origin of humans in the world, is also the youngest continent in the globe, in terms of population. It is this power of youth and exuberance that will shape the future of Africa. It really is time for Africa in truest sense of the term!
The past couple of decades of steady growth have changed perceptions about Africa for the better. Seven of the world’s ten fastest growing economies are in Africa today, poverty has been falling since the start of the millennium, and a middle class is fueling growth in domestic consumer demand. With new investments and a growing economy, Africa clearly has an opportunity over the next decade to become a prosperous continent that creates more employment for all. This is the result of Africa opening up to the world. Yes, law and order situation, corruption and political instability still are core issues hindering progress. Many countries however, have undergone massive social and economic changes, for the good. With increasing urbanization, better macroeconomic policies cutting across the African nations, improved governance, an expanding better educated workforce, and growing disposable income, Africa is becoming increasingly attractive to investors. Africa’s foreign direct investment (FDI) inflow was USD 50 billion in 2012. FDI flows to the service sector—in particular the finance, wholesale and retail commerce, transportation, telecommunications, and manufacturing sectors—have also expanded, indicating that the greater spending power of African consumers is attracting investors. The growth in FDI has directly and indirectly led to stimulation of local entrepreneurship, expansion of local markets, and facilitation of skill creation. Everyone in the world now talks and appreciates the mobile money technology platform, which is a gift to the global economy from Africa, and originated in Kenya. Not only is the technology appreciated by Global technology pundits, it is also being adopted widely. This technology invention, which solved a very basic problem of African people’s life, lack of access to organized banking, is also giving inspiration to a whole new generation of African entrepreneurs who has jumped and submerged themselves in the Technology domain, to create solutions to Africa’s economic and social problems. The whole world is looking at Africa and this new generation of problem solvers.
In the last twenty years, Africa’s population has increased by 2.5 percent per year and in 2014 the population exceeded the 1.1 billion. This is expected to rise to 2.4 billion by 2050. Africa, a continent whose physical size is larger than China, India, United States, Japan, and most of Europe and United Kingdom combined, shall be soon boasting of the world’s largest workforce. It has a tremendous opportunity to transform into a global economic powerhouse. This strong workforce is projected to grow to 1.5 billion by 2050 from 617 million in 2014. Seizing that opportunity depends on access to education and skills, the quality and scale of public investment in infrastructure, and the associated private investment in business and jobs.
The shift towards cities:
Africa, known for its wild life and vast savannah landscapes, and scorching deserts, has been slowly but surely shifting towards its cities. From 1960 to 2011, the urban share of Africa’s population rose from 19 percent to 39 percent— to about 416 million people in 2011. By 2040 half of Africa’s population will live in a city. Several African cities, such as Dar es Salaam and Kinshasa, are now and will continue to be among the fastest-growing in the world. Thus, Africa is the fastest urbanizing continent in the world.
Since the start of the new millennium, Africa’s economic pulse has quickened: real gross domestic product (GDP) has been rising by 5 percent a year and real income per capita has increased by 2.1 percent a year. Africa’s collective GDP stands at USD 2.5 trillion today—and the continent is among the world’s fastest growing regions.
The main engines of growth are expected to be expansion in agricultural production, robust growth in services, and a rise in oil production and increased mining activity mainly in resource-rich countries. Conflict remains a concern but has declined. By further closing the infrastructure gap, increasing access to key public services such as education, health, and security, and addressing concerns of high poverty and widening income inequality, Africa can realize its vision of becoming the next emerging market.
Information and Communication Technology: While Africa’s information and communication technology (ICT) market is still at a nascent stage, robust economic growth, population boom, rapid urbanization, an emerging middle class, strong competition among providers, and the increasing affordability of mobile devices have propelled it to grow dramatically in recent years. Substantial development assistance has been channeled to the ICT sector in Africa.
Africa is now the fastest growing and second largest mobile phone market in the world. More than eight in ten Africans have a mobile phone, amounting to 760 million mobile subscriptions in 2014, up from 15 million in 2000. It will continue to grow over the next 5 years, with the number of subscriptions projected to cross the 1 billion mark by 2016-17. The average penetration rate has also risen from 37 percent in 2010 to 80 percent in 2013 and is still growing at 4.2 percent annually.
Internet use continues to increase. Africa’s data network has been boosted through the rapid spread of submarine data transmission cables, bringing significant international bandwidth within reach of many Africans. The number of internet users has increased from 4 million people in 2000 to 198 million people in 2012. In some countries like Kenya, nearly 99 percent of internet subscriptions are on mobile phones.
Telecommunications is crucial not only for the betterment of the citizen’s lives, but to the economic growth of a country as well. It enables business growth by providing connectivity access to global markets and supporting trade communications. It has further, brought on innovations in e-business, e-payments, e-learning, e-health, and e-government, and propelled private consumption. With digital technology, governments could improve transparency and public service delivery, teachers and students could gain access to education content and training via tablets and e-books, remote diagnosis and treatment could be provided to those with lack of access to a health clinic, farmers could access up-to-date weather and market information, and more people could gain access to finance via mobile and online banking. As the continent becomes more connected, social and economic growth will accelerate, transforming lives in the process.
With regards to the BPO industry, the Africa of today provides for a fertile ground, both for the private and govt sector, to join hands and take advantage of the new Africa and the opportunities it presents. While the MNCs doing business in Africa since sometime now can look at setting up their captive units catering to the Africa market, local home grown companies or from outside can also set up operations taking advantage of the rapidly improving socio economic and infrastructure environment in the new Africa.
What Africa should immediately learn from the India success story?
- Rapid industrialization and growth of IT parks across the continent, and countries
- Partial privatization of telecommunication in all countries.
- Development of SEZ; which also help IT/BPO companies get tax benefits
- Making skilled resource readily available in the country – more spending on education and skill development programs for the African youth by the Govts.
- Low operating costs - cut down on taxes, have a liberalized tax regime - Tax breaks and sops offered by the government
It is in this context that it is worthwhile to share the success of a company, which is very much an African entity, with registered office in Mauritius and corporate HQ in Lagos, Nigeria. The iSON Group comprises of two main division – the IT arm iSON Technologies which is a leading Pan-African systems integrator, managed service provider and strategic outsourcing player providing end-to-end IT services and solutions across the continent with an on the ground presence in 25 African countries, and in Middle East and ASEAN region. Additionally, iSON offers BPO services through iSON BPO, its BPO arm. The robust BPO services infrastructure is built on global delivery framework to deliver voice, non-voice and other knowledge process outsourcing (KPO) services through local presence and on-shore/remote support, leading to superior customer experience, highly satisfied customers and growth in business.
iSON Group has been doing business in the IT-ITeS space in Africa since the last 7 years, with its inception in Feb 2011. In its own humble ways, iSON Group has been the pioneer of the BPO industry with an un-matched multi country presence across Africa. iSON Group has a strong Africa presence and operates in Bangladesh, Burkina Faso, Burundi, Botswana, Cameroon, Chad, Congo, DRC, Ethiopia, Gabon, Ghana, India, Kenya, Myanmar, Madagascar, Morocco, Malawi, Niger, Nigeria, Rwanda, Saudi Arabia, Sierra Leone, Senegal, Seychelles, South Africa, Tanzania, UAE, Uganda, Zambia and Zimbabwe. iSON BPO employs close to 12,000 people across its Africa operations and 99% of its staff are local – Africans, serving African clients and customers.
Having started with 6 countries in Africa, with a large Telecom operator, managing 50% share of the business, iSON BPO has grown to approx 10 countries for them handling 70% share of the business – A testimony of the client’s on iSON’s proven capability and service delivery. The Top telecom company in Africa has also awarded contract to iSON BPO for 7 countries to handle their 100 million subscribers end to end with technology. With this, iSON BPO now handles over 150 million customer base in Africa itself. Besides Telecom sector, iSON BPO also has presence in Retail, Airlines, BFSI and Technology sectors, across Africa. iSON BPO, by virtue of the business impact it has created for its clients across Africa, has become the largest partner for most of its clients.
In the words of the founder and Chairman of iSON Group, Ramesh Awtaney "Unlike most BPO and Tech services companies which take work and jobs to IP, we have pioneered reversing the trend by taking IP to the work without compromising on world-class quality. As part of our core strategy, we have invested in developing local systems and empowering local talent to foster a better future for the African continent. We do not outsource local work outside of Africa,"
As per Pravin Kumar, the Global CEO of iSON BPO, "Nigeria has a huge potential for growth and development, especially with the availability of strong, vibrant and talented workforce. One of our visions for Nigeria is to upskill the local human talent and develop it as an Offshore Call Center hub and also add significant value for our customers both internally and externally. It should not be difficult to create 25,000 jobs in 1 to 2 years and generate export revenue of around 400 million dollars in this space”
Thus it can been inferred, the iSON Group is completely dedicated to the cause of the African dream and has laid out for itself ambitious plans to grown organically within Africa, thereby creating more and more employment opportunities for the deserving and hardworking African youth. Not only has iSON created massive employment opportunities, it has been able to upskill, train and give promotions to over 1100 local talent into supervision and managerial roles, so far since its inception. Many of them has reached the level of country heads, managers, general managers etc. They have been exposed to some of the best skill development and leadership trainings in the process. iSON takes lot of pride in promoting local talent and this is an essential aspect of its HR / People development delivery.
It is also worthwhile to mention that iSON BPO has an active CSR program (Corporate Social Responsibility), whose primary focus is carry out activities which impact the social economic circumstances of marginalized members of our society. To ensure the objectives of this initiative are met, it is a requirement that partnerships are entered into with not for profit organizations, NGOs doing work on youth empowerment, skill development and rehabilitation of the people below poverty line etc. iSON has a commitment to providing employment opportunities to persons from marginalized communities through partnerships as above. It is envisaged that at least 5% of iSON BPO entry level positions are taken up by persons recruited through this initiative by end 2016. Some of these NGOs/ Agencies with whom we have tied up and are already providing employment in our centers across Africa are: Mouvement Burkinabè pour le Développement et le Civisme, SOS Childrens' Villages Kenya, SOS Childrens' Villages Nigeria, Project Akhilah and Generation Rwanda, Community Association for Psychosocial Services Sierra Leone, Don Bosco Tanzania, Uganda Youth Development Link etc.
Thus, the emerging Africa BPO story, a story of endless opportunities, has already begun and iSON BPO has been a flag bearer cum leader in the journey so far, in its own humble ways, doing its bit to fuel this dream for Africa. Africa will need hundreds and hundreds of such such iSONs to propel its dream. The Govt and the private sector companies, agencies should encourage, recognize such companies which in turn will inspire a whole new generation of African youth to see and live the African dream. Yes, the time has come for the world to listen to the roar of the sleeping giant, out of its slumber – it’s time for Africa!!!