Uganda moves to implement BPO model

Uganda has moved to implement her Business Processing Outsourcing (BPO) strategy and model, which has so far cost some Ush5b (US$2.1m).
The strategy will see some 3,000 young Ugandans acquire BPO skills through training that has already commenced with some 500 youth at Makerere University’s Faculty of Computing and Information Technology (FCIT).
FCIT has partnered with National Information Technology Authority Uganda (NITA-U) to develop an international BPO training programme that will be used to provide BPO training in the country and also act as a benchmark for other training institutions, which may wish to develop competencies in BPO training.
Mr. James Saaka, the executive director NITA-U said the BPO training programme at Makerere is aimed at addressing the BPO skills gap that Uganda is facing compared to leading BPO destinations like India, Malaysia, South Africa, Egypt, Mauritius and other BPO emerging markets.
“Once the programme commences, the country will stand to benefit from a critical mass BPO skilled personnel and a wealth of BPO skilled managers and entrepreneurs that are key in attracting global BPO business,” Saaka said.
According to Saaka, the Uganda government is developing the capacity of BPO operators in the country to cope with the competitive nature of the industry while positioning Uganda as a BPO destination.
He said the goal of the programme is to develop BPO skills, to build, demonstrate and establish a BPO incubation centre with a 300 seat-call centre as a BPO centre of excellence to provide direct and indirect employment opportunities for 1000 Ugandans within 2010/2011 financial year for starters.
Government will provide rented space for BPO operators that are not in the call centre category, provide bandwidth for BPO operators and clean power with backup power as incentives for BPO operators who will operate in the incubation centre.
Government will also provide a training facility for BPO trainers, to brand and market the BPO industry in Uganda and to develop BPO governance frameworks.
Government’s decision to support the BPO industry through the provision of incentives is intended to make the industry grow, mature, become globally competitive and deliver the expected benefits.
The expected benefits Saaka talks about include creating employment, increase in government revenue, increased economic development and further investment in infrastructure to support the BPO industry and marketing Uganda as a preferred BPO destination.
Business Process Outsourcing is the strategic use of the third party service providers to perform activities traditionally handled by internal staff in a company or an institution.
It is common in the airlines, insurance, banking and energy sectors.
Information Communications and Technology Minister Aggrey Awori said there is a growing demand for ICT outsourcing in Africa that Uganda needs to capture.
“BPO has two categories including; back office outsourcing which involves internal business functions such as billing or purchasing, and front office outsourcing which includes customer-related services such as marketing or technical support,” Awori said.
Awori said that with the ever increasing number of graduates from Ugandan universities, of whom only 40% are absorbed in the formal job market coupled with Uganda’s use of English as a language of instruction, the BPO industry would be able to employ a large number of university graduates.
Minister Awori said in India, the BPO market is massive, generating revenues of US$30b per year, but that rising costs mean it is a less cost effective option for basic outsourcing services.
Management costs he said are approaching US levels, employee costs rising at 10-15% per year, and it is becoming difficult to attract/retail talent – justification he said for countries like Uganda to join the BPO industry.
He warned that BPO and ICT services are very competitive and companies that provide these services will require strict adherence to set standards as well as strict operating procedures that cannot easily be met without dedicated top-tier infrastructure and support from the host governments.
A BPO technical working group has been set up to spearhead the activities of the BPO roadmap.

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