Business Process Outsourcing (BPO) in Rwanda
By Alpha Akariza
First of all it is with pride that we notice our compatriots have not stopped the use of their magic wand to enrich the media output of our a thousand hill country. Business in Rwanda is the latest contribution in this field. This latest contribution to Rwanda’s media is welcomed as a well-timed one.
Rwanda is in a challenging period of its development, in order to achieve sustainable growth, it has to reinvent itself. The Government of Rwanda has embarked on a series of far-reaching reforms with a view to promoting investments and instilling a new business culture. With little natural resource and infrastructural resources, Rwandese can only rely on our minds, how we can develop our intellectual capital and services in order to sell this to the global market. Rwanda could easily break new ground by providing certain services to the global market from the continent of Africa.
Today’s global economic conditions are forcing companies across the world to find new ways of cutting costs. But how do you reduce expenses without sacrificing services? As the cost of business continues to escalate, this question becomes more and more prominent. Companies are looking at Business Process Outsourcing (BPO) as a solution to this problem.
Business process outsourcing (BPO) is the act of giving a third-party the responsibility of running what would otherwise be an internal system or service. For instance, an insurance company might outsource their claims processing program or a bank might outsource their loan processing system. Other common examples of BPO are call centers and payroll outsourcing.
Typically, companies that are looking at business process outsourcing are hoping to achieve cost savings by handing the work to a third-party that can take advantage of economies of scale by doing the same work for many companies. The varying costs of living in diverse geographical regions dictate that labor costs will equally vary, creating an opportunity for companies to save on labor costs through off-shoring.
In exchange for the potential cost savings, the company in question must relinquish control over an aspect of their business which explains why business process outsourcing is often reserved for non-critical, non-core type of work.
Rwanda is a prime candidate in this business arena due to due to factors like language skills, time zone/geographical location and an underemployed workforce with resulting low labor costs. Rwanda is rapidly producing French and English speaking professionals in various fields including engineering, ICT, financial management and accounting.
With a global services sector which is facilitated by information communication technologies and Rwanda’s competitive labor costs, off shoring activities can be scaled up and the nation can position itself in niche markets of the global sector. The key vertical market niches Rwanda could focus on include coding, billing, data processing and customer contact processes. Rwanda can eventually serve as an off shoring hub for countries in the West by starting off as a third-party or subcontracting hub for more established off-shoring destinations like South Africa in particular.
Investment in IT-enabled services sector is a key factor that can potentially transform what the Rwandan economy has to offer the global market. Business Process Outsourcing ((BPO) is the catch phrase of this business, it is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry
South Africa and Egypt are the largest African players in providing services to the global market. One foundational aspect for growth in this field is the government support in terms of investment and proving BPO policies. Egypt and South Africa have the benefits of large populations of about 75million and 45 million respectively, with a huge talent pool of professionals that is boosted by a high language quality and variety that includes Arabic, English and French. This aspect can particularly favor call centre services to different destinations provided there are competitive telecommunication rates. Mauritius, Botswana and Kenya are also competitive destinations for outsourcing companies.
With Rwanda’s growing financial services sector and growing tourism industry, the country can scale up agent positions for BPO services. This will ultimately require investment and development in infrastructure, telecommunication services, human resource capacity and provision of a stable business environment.
Filed under: OPINION |