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Let’s Get BPO Industry Out of its Present Limbo

Majakathata “Jax” Pheko

At an economically tumultuous juncture of our country’s history as we presently are, where unemployment has become something of a Gordian Knot conundrum, a promisingly ameliorational pursuit known as Business Process Outsourcing (BPO) is well worth exploring as a salvavic option.

One pundit defines BPO as “a subset of outsourcing that involves contracting the operations and responsibilities for a particular business process to a third-party service provider.” Examples of BPO services, which invariably do not constitute a company’s core or primary mission, include inbound and outbound call centres, live chat, bookkeeping, web development, research marketing, accounting and finance, and after-hours call answering services. BPO is driven, fundamentally, by the imperative of cost-cutting and overrides national boundaries through the employment and deployment of technologies that make human and data communications easier, thus lending credence to the concept of the global village that is today’s world.

BPO had been in existence in its primordial form since as early as the 19th century but it was not until the 1980s that its latter-day incarnation loomed larger and the term outsourcing became part of daily business parlance. Today, every continent is into BPO, including the economic Dark Horse called Africa. The Global IT-BPO Outsourcing Deals Analysis segments BPO buyer regions into three categories. These are North and South America (42 percent); Europe, Africa, and the Middle East (35 percent); and Asia and Oceania 23 percent.

In a Third World country such as Botswana, overseas-oriented BPO is key to bringing in those paramount hard currencies besides engendering a radical turnaround in the all too dingy joblessness picture. But are we up to it folks? Have we gotten aboard the bandwagon or we are virtual spectators watching nonchalantly as the BPO locomotive streaks away at breakneck speed?

JAX’S FLASH-IN-THE-PAN SUCCESS

The extent to which BPO has taken root in Botswana is not apparent. The first time I heard of it was in August 2007, when the Botswana Qualifications Authority (BQA), then going by the name Botswana Training Authority (BOTA), put it on record at a one-day IFSC-organised conference that they were in the process of developing standards for the nascent BPO industry in Botswana whilst they benchmarked with Mauritius, the UK, and South Africa. Little, if anything at all, has been heard of their progress since.

In February 2018, The Botswana Guardian reported of the newly-established Direct BPO, a fully-owned subsidiary of Mascom, which was looking to employing 400 people at the very outset. Once again, details as to how Direct BPO, whose establishment coincided with Mascom’s 20-year anniversary, has fared to date remain sketchy.

Perhaps the most spectacular case of a BPO operation in Botswana was that of Oseg, a company begun by Majakathata Pheko, affectionately known as Jax, in 2003 under the Debtsolve franchise umbrella. Oseg, which comprised of three divisions, offered customer management and financial services solutions and operated out of Gaborone and Windhoek in Namibia, where it touted MTN as its principal client. Oseg did receivable management for local financial blue chips such as Barclays Bank, FNB, Bayport, MVA, Botswana Insurance Company, Letshego, and Standard Chartered, and in due course CEDA and Mascom. It also served the Australian offshore market. Its account receivable division was the biggest in Botswana, handling over 60,000 accounts and managing a portfolio of over P400 million.

At its height, Oseg employed 150 people and had spent over P15 million on cutting edge technology and manpower training. In 2007, Oseg was nominated for Best Non-European Contact Centre at the CCF Awards held that year in Birmingham, UK, the “Oscars of the industry”.

Then in 2016, the sky seemed to have fallen. Oseg found itself saddled with an odious P4.4 million debt, with its staff resultantly trimmed to just under 50. According to media reports, Jax pointed to his own bankrollers and their partners in the alleged crime as his rather devious saboteurs. “I have evidence that powerful people in the bank and a cabal of friends both inside and outside the bank were intentionally and aggressively looking for ways to weaken Oseg, tarnish its name and diminish its value as they were in the same competing business interests, in the call centre and the factoring business,” the then youthful entrepreneur, who was only 41 at the time, bemoaned.

Jax reported the matter to NBFIRA and what came of that, not to mention the continued viability of his business, I have not been able to establish. I just hope and trust that Jax personally weathered the tempest as I have it on good authority that he is doing fairly well.

BOTSWANA MISSING OUT ON DOLLAR-DENOMINATED BILLIONS

For emerging economies, and even peripheral Third World countries, the BPO business can be something of a gold mine. According to the latest McKinsey report, the global BPO industry is valued at $163 billon and is expected to grow at $183 billion by the year 2023.

In the Philippines, BPO, which began with a call centre setup way back in 1992, accounts for 11 percent of GDP, the single biggest contributor to the nation’s economic activity. It employs 1.3 million people in over 700 outsourcing companies. One company, called Teleperformance, alone employs 47,000 people in 21 sites. In 2019, the BPO sector generated revenues of the order of $26.3 billion.

In India, the BPO sector, now 30 years old, provides direct employment to 2 million people and indirect employment to 8 million. In 2019, the BPO income overall amounted to $8.6 billon.  In Mauritius, the ICT/BPO sector contributed 6 percent to GDP in 2019, representing a key driver of the Mauritian economy. The BPO sector is responsible for 53 percent of the 27,000 people employed in the ICT/BPO superstructure in 850 companies.

According to the Economic Development Board of Mauritius, leading multinationals such as Accenture, Huawei, Aspen Pharmacare and Allianz have back office operations in Mauritius. In addition, a number of international payroll companies currently use Mauritius as a service delivery centre.

Kenya is also looking to position itself as a hub for global digital BPO, notably through government promotion schemes such as Ajira. According to the ITC Authority of Kenya, the market size for online work was estimated to be $4.8 billion in 2016 and was projected to generate $15 billon by 2020. With only 7000 people employed in the BPO industry in the country, we are talking about a modest figure though it is still brisk compared to the rather lugubrious situation in Botswana. Clearly, there are billions in US dollar terms to be had in BPO and we are missing out on these big time.

MZANZI LEAVES BW IN THE DUST

Yet it is Big Brother next door from whom we have precious much to glean as he is our immediate competitor potentially in the BPO race. Remember, if our IFSC continues to flounder to date, it is largely on account of the fact that in Mzansi, we have a formidable rival right on our doorstep.

As we speak, the South African BPO sector is valued at $461 million going by the invariably authoritative McKinsey survey. It employs 270,000 people in six cities, a figure projected to more than double to 775,000 by 2030. Of the current total staff base, 65,000 serve international clients. That South Africa has made such enormous strides in the BPO arena is meritoriously earned and not simply fortuitous. It has been voted the second most attractive BPO location in the world for three years on the trot.

The South African BPO sector is tipped to grow by 3 percent per annum over the next three years, a rate which is in line with the trends in the global BPO space. There are currently over 100 local and international BPO providers operating in South Africa, with local players in the main serving large multinational customers. The industry’s key offshore business clientele is domiciled in English-speaking countries, notably the United Kingdom, United States, Canada, Australia, New Zealand and Ireland, with 61 percent coming from the United Kingdom, 18 percent from the United States and Canada, and 11 percent from Australia.

In June this year, the $1.5 trillion-strong Amazon announced that it would be signing up a total of 3000 South Africans to help cater to its customers in North America and Europe, which is testament to the fact that the country’s BPO market continues to make waves in the Western world. If Jeff Bizos is impressed, you can count on the likes of Elon Musk and Mark Zuckerberg to follow suit too sooner rather than later.

A FORGONE OPPORTUNITY TO TURBO-CHARGE THE BPO INDUSTRY IN BOTSWANA

Empowerment Africa is an organisation that boasts a business network that enables established and emerging businesses to connect, partner, and create long-term value with Africa-based projects. With reportedly 3000 esteemed contacts, it liaises with governments, major corporations, and investors to facilitate business opportunities, deliver deal flow, and provide research across its network to the Empower Africa business community.

Empowerment Africa recommends seven countries in Africa with thriving outsourcing industries. They are Ethiopia, Nigeria, South Africa, Kenya, Ghana, Mauritius, and Madagascar in that order. Botswana is conspicuous by its absence and that must be ample cause for concern to our Monetary Authorities, especially given that at least on paper, we are economically better off than three to four of these countries.

In 2015, Jax approached the Ministry of Youth, Sport and Culture and propositioned a joint partnership with Oseg in unlocking BPO potential in Botswana by looking at the public sector Debt Collection and Call Centre services for government. Jax reckoned that the total market for Receivables and Revenue collections sitting in Government and Parastatal organisations at the time amounted to over P3.5 billion, equivalent to 8% of the National Budget then. If the BPO sector was to be utilised to assist in collecting this debt, over 2700 jobs would be created.

Furthermore, considering that a typical government employee spent half the time attending to inquiries from members of the public, the exercise would result in improved efficiency delivery in government departments in addition to boosting government’s liquidity position.

This is what Jax said in a 50th independence anniversary publication in 2016 on the same subject. “Our estimations are that once all the collections work is outsourced, there is a potential to collect more than P100 million every month for the Government of Botswana.

The opportunity to create more than 2700 exists, which will help to mop out unemployed graduates and upskill them. The economic impact of 2700 jobs would support more than 15,000 people in the economy and also help to create jobs in other industries that support the BPO sector, and will stimulate the whole ICT sector. Over and above that, the outsourcing would stimulate the whole IT sector and help improve Botswana’s position as an ICT and Call Centre hub.”

Once again, I am not privy to what came of this proposition, but I am persuaded that had government acceded to it, the BPO business in the country would have quantum-leaped and we would today be waltzing on the proverbial Cloud 9 in terms of revenues generated. Even the road retarder Oseg encountered with its bankers would not have been a factor at all. As significant, we would in all probability have made it on Empowerment Africa’s short list for the continent’s pre-eminent BPO addresses.

THE INSTRUMENTALITY OF GOVERNMENT IN BOOSTING BPO FORTUNES

Granted, with the advent of the still latent E-Governance, the synergic potential with the Call Centre business is stupendous. As per Jax’s pitch to those who care to hear, “The outsourcing of the E-Governance and collections will greatly improve efficiency in service delivery in the government departments. Directing traffic and enquiries to a Call Centre would empower the BPO sector in such a way that would be able to help the public from all over the country from one central point 24 hours and 7 days week.

The Call Centres would also relieve Government of the pressure to develop brick and mortar representations/offices across the country. This would help to save billions of Pula as the public will be able to access the services from the comfort of their homes and villages. The Call Centre service would bridge the urban and rural division as everyone will now be able to access Government services and receive the same service.”

The real jackpot both to government and the broader citizenry, however, resides in the offshore market. With sales cycles in the BPO business taking up to 12 months, contracts typically run from five to seven years, which is sustained lucrativeness by any measure. It is in the direction of the overseas market that much of our energy should be focused, though wary that we do not recklessly neglect the domestic market, if we are to reinvigorate the BPO industry and get meaningful returns out of it.

Developed countries are all the more keen to outsource as one way to insulate their economies against severe hurt inflicted by globalwide economic tremors. For instance, it was thanks to offshore outsourcing that Australia so ably navigated the 2008 economic crisis. That year, IBM released a BPO report showing that 80% of Australian companies were willing to outsource from offshore companies to save 50% in expenses.

Here in Botswana, I would recommend that government be in the BPO vanguard by splashing on a whole host of catalytic factors. In South Africa, for instance, the Department of Industry, Trade and Competition devoted R1.3 billion between 2007 and 2018 to bolstering the BPO industry in one way or the other and committed a further R1.2 billion in 2019 alone, gestures which no doubt underlie the solid performance of the industry.

Even when the lockdowns were in progress, the industry was accorded essential services status so that it kept the momentum going. As if not to be outdone, the South African BPO industry body, Business Process Enabling South Africa (BPESA), has commendably done its part in aiding the growth of the industry by supporting skills development, sharing best practice, and providing its members with access to other business networks and associations that drive and influence the sector’s transition into the digital economy. In Mauritius, the Prime Minister himself, and not a man of lesser stature, directly oversees the BPO sector.

For Botswana to make a mark in the BPO arena, it has to build a reputation as a reliable, cost-effective, and high-quality destination for outsourced business services, attributes all of which South Africa excels in. In addition, South African BPO players provide higher-quality services owing to strength across five key areas: availability of skills, infrastructure, risk profile, business environment, and industry size. In Botswana, we will need to nurture some of these strengths with the instrumentality of government.

With the advent of COVID-19, it is of essence that traditional BPO providers build capabilities to enable rapid deployment and ramp-up of fully functional teams under crisis scenarios. Operational resilience, that is, the ability to pivot when an ordinarily disruptive set of circumstances hits, is key. South Africa demonstrated this capacity most eloquently when 90 percent of the workforce was able to switch to remote work in residential settings, when 50 percent of operations in key competing locations such as the Philippines and India came to a virtual standstill.

Lastly but by no means the least, a competitive currency is a reasonably efficacious undercutting strategy. In recent months, the South African Rand has significantly weakened against the US dollar, in which the cost of outsourcing is typically denominated, and this has enabled South African BPOs to compete more effectively with Asian offerings.

It concerns me that last year, the Pula appreciated by 1.6 percent against the SDR (Special Drawing Right), which is a compound of five currencies, namely the US dollar, the British Pound, the Euro, the Japanese Yen, and the Chinese Yuan. If that relatively ripped Pula trajectory persists, it will not help our BPO competitiveness at all Rre Moses Pelaelo.

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Chronic Joblessness: How to Help Curtail it

30th November 2020
Motswana woman

The past week or two has been a mixed grill of briefs in so far as the national employment picture is concerned. BDC just injected a further P64 million in Kromberg & Schubert, the automotive cable manufacturer and exporter, to help keep it afloat in the face of the COVID-19-engendered global economic apocalypse. The financial lifeline, which follows an earlier P36 million way back in 2017, hopefully guarantees the jobs of 2500, maybe for another year or two.

It was also reported that a bulb manufacturing company, which is two years old and is youth-led, is making waves in Selibe Phikwe. Called Bulb Word, it is the only bulb manufacturing operation in Botswana and employs 60 people. The figure is not insignificant in a town that had 5000 jobs offloaded in one fell swoop when BCL closed shop in 2016 under seemingly contrived circumstances, so that as I write, two or three buyers have submitted bids to acquire and exhume it from its stage-managed grave.

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The Era of “The Diplomat”

30th November 2020
FATED “JIHADI” JOHN

Youngest Maccabees scion Jonathan takes over after Judas and leads for 18 years

Going hand-in-glove with the politics at play in Judea in the countdown to the AD era, General Atiku, was the contention for the priesthood. You will be aware, General, that politics and religion among the Jews interlocked. If there wasn’t a formal and sovereign Jewish King, there of necessity had to be a High Priest at any given point in time.

Initially, every High Priest was from the tribe of Levi as per the stipulation of the Torah. At some stage, however, colonisers of Judah imposed their own hand-picked High Priests who were not ethnic Levites. One such High Priest was Menelaus of the tribe of Benjamin.

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Land Board appointments of party activists is political corruption

30th November 2020

Parliament has rejected a motion by Leader of Opposition (LOO) calling for the reversing of the recent appointments of ruling party activists to various Land Boards across the country. The motion also called for the appointment of young and qualified Batswana with tertiary education qualifications.

The ruling party could not allow that motion to be adopted for many reasons discussed below. Why did the LOO table this motion? Why was it negated? Why are Land Boards so important that a ruling party felt compelled to deploy its functionaries to the leadership and membership positions?

Prior to the motion, there was a LOO parliamentary question on these appointments. The Speaker threw a spanner in the works by ruling that availing a list of applicants to determine who qualified and who didn’t would violate the rights of those citizens. This has completely obliterated oversight attempts by Parliament on the matter.

How can parliament ascertain the veracity of the claim without the names of applicants? The opposition seeks to challenge this decision in court.  It would also be difficult in the future for Ministers and government officials to obey instructions by investigative Parliamentary Committees to summon evidence which include list of persons. It would be a bad precedent if the decision is not reviewed and set aside by the Business Advisory Committee or a Court of law.

Prior to independence, Dikgosi allocated land for residential and agricultural purposes. At independence, land tenures in Botswana became freehold, state land and tribal land. Before 1968, tribal land, which is land belonging to different tribes, dating back to pre-independence, was allocated and administered by Dikgosi under Customary Law. Dikgosi are currently merely ‘land overseers’, a responsibility that can be delegated. Land overseers assist the Land Boards by confirming the vacancy or availability for occupation of land applied for.

Post-independence, the country was managed through modern law and customary law, a system developed during colonialism. Land was allocated for agricultural purposes such as ploughing and grazing and most importantly for residential use. Over time some land was allocated for commercial purpose. In terms of the law, sinking of boreholes and development of wells was permitted and farmers had some rights over such developed water resources.

Land Boards were established under Section 3 of the Tribal Land Act of 1968 with the intention to improve tribal land administration. Whilst the law was enacted in 1968, Land Boards started operating around 1970 under the Ministry of Local Government and Lands which was renamed Ministry of Lands and Housing (MLH) in 1999. These statutory bodies were a mechanism to also prune the powers of Dikgosi over tribal land. Currently, land issues fall under the Ministry of Land Management, Water and Sanitation Services.

There are 12 Main Land Boards, namely Ngwato, Kgatleng, Tlokweng, Tati, Chobe, Tawana, Malete, Rolong, Ghanzi, Kgalagadi, Kweneng and Ngwaketse Land Boards.  The Tribal Land Act of 1968 as amended in 1994 provides that the Land Boards have the powers to rescind the grant of any rights to use any land, impose restrictions on land usage and facilitate any transfer or change of use of land.

Some land administration powers have been decentralized to sub land boards. The devolved powers include inter alia common law and customary law water rights and land applications, mining, evictions and dispute resolution. However, decisions can be appealed to the land board or to the Minister who is at the apex.

So, land boards are very powerful entities in the country’s local government system. Membership to these institutions is important not only because of monetary benefits of allowances but also the power of these bodies. in terms of the law, candidates for appointment to Land Boards or Subs should be residents of the tribal areas where appointments are sought, be holders of at least Junior Certificate and not actively involved in politics.  The LOO contended that ruling party activists have been appointed in the recent appointments.

He argued that worse, some had no minimum qualifications required by the law and that some are not inhabitants of the tribal or sub tribal areas where they have been appointed. It was also pointed that some people appointed are septuagenarians and that younger qualified Batswana with degrees have been rejected.

Other arguments raised by the opposition in general were that the development was not unusual. That the ruling party is used to politically motivated appointments in parastatals, civil service, diplomatic missions, specially elected councilors and Members of Parliament (MPs), Bogosi and Land Boards. Usually these positions are distributed as patronage to activists in return for their support and loyalty to the political leadership and the party.

The ruling party contended that when the Minister or the Ministry intervened and ultimately appointed the Land Boards Chairpersons, Deputies and members , he didn’t have information, as this was not information required in the application, on who was politically active and for that reason he could not have known who to not appoint on that basis. They also argued that opposition activists have been appointed to positions in the government.

The counter argument was that there was a reason for the legal requirement of exclusion of political activists and that the government ought to have mechanisms to detect those. The whole argument of “‘we didn’t know who was politically active” was frivolous. The fact is that ruling party activists have been appointed. The opposition also argued that erstwhile activists from their ranks have been recruited through positions and that a few who are serving in public offices have either been bought or hold insignificant positions which they qualified for anyway.

Whilst people should not be excluded from public positions because of their political activism, the ruling party cannot hide the fact that they have used public positions to reward activists. Exclusion of political activists may be a violation of fundamental human or constitutional rights. But, the packing of Land Boards with the ruling party activists is clear political corruption. It seeks to sow divisions in communities and administer land in a politically biased manner.

It should be expected that the ruling party officials applying for land or change of land usage etcetera will be greatly assisted. Since land is wealth, the ruling party seeks to secure resources for its members and leaders. The appointments served to reward 2019 election primary and general elections losers and other activists who have shown loyalty to the leadership and the party.

Running a country like this has divided it in a way that may be difficult to undo. The next government may decide to reset the whole system by replacing many of government agencies leadership and management in a way that is political. In fact, it would be compelled to do so to cleanse the system.

The opposition is also pondering on approaching the courts for review of the decision to appoint party functionaries and the general violation of clearly stated terms of reference. If this can be established with evidence, the courts can set aside the decision on the basis that unqualified people have been appointed.

The political activism aspect may also not be difficult to prove as some of these people are known activists who are in party structures, at least at the time of appointment, and some were recently candidates. There is a needed for civil society organizations such as trade unions and political parties to fight some of these decisions through peaceful protests and courts.

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