Amount : USD 500,000.00
In December 2008, the Rockefeller Foundation provided a grant in the amount of $500,000 to Kenya ICT Board to be used to carry out a study to validate Kenya’s Business Processing Value Proposition, align it with the vision of the sitting coalition government and develop a BPO strategy.
The government vision as summarized in the country’s’ vision 2030 blue print includes economic goals, social goals and governance goals. BPO is one 6 flagship projects under the economic goals as having the biggest potential to create employment for the youth and achieve a GDP of 10% annually.
The Rockefeller fund was provided to Kenya ICT Board, the government state corporation tasked with bolstering the Business Process and Outsourcing (BPO) sector. In applying for the support, the Kenya ICT Board recognized:-
· The need to validate update and flesh out the BPO value proposition given the significant economic and political developments over the last 12 months and stated requirements from potential investors and anchor tenants.
· The need to conduct a successful road show to place Kenya within a leading competitive context within the Global ICT sector based on a well validated and compelling value propositions.
· The need for a partner who will help to articulate the BPO story and successfully orchestrate successful road shows globally that will firmly put Kenya at the forefront of tapping into Global BPO investments over the next 5 years.
1.2 Grant Progress
McKinsey were commissioned to assist in to help formulate Kenya’s value proposition and develop a comprehensive go-to-market strategy for the sector.
The key objectives met are:
· Validation and updating of the value propositions
· Compiled, synthesized and provided technical and other responses as required to the questions and concerns raised by key stakeholders (e.g. investors, anchor tenants, service providers, existing clients)
· Develop 4-5 detailed case studies of successful small and large BPO operators in Kenya
· Prepare comprehensive road show plan to promote the Kenya BPO sector and the BPO park
· Creation of a customized training programme.
The grant deliverables met and included in a report submitted to the Board by McKinsey are development of:
· Marketing campaign,
· Detailed business plan for the creation of a BPO industry
· Design of a BPO training program.
The project planned duration was five months, December 1, 2008 to April 30,2009. The Board requested for grant extension to 30th May 2009.
McKinsey & company conducted an eight week project, it was divided into the following phases;
- Conducting a diagnostic to determine which part (s) of the market Kenya should focus its efforts to develop a successful BPO industry
- Determining which strategy Kenya should follow, given its strengths and Challenges
- Identify key actions necessary to deliver on the strategy
The outcome of this work was an extensive analysis of the sector and some valuable recommendations.
1.4 Brief Summary of outcomes
Development of the BPO strategy report and final value proposition. Included in the report is the following:
· BPO & O business case/Marketing plan(Go to Market)
· Talent development strategy
· Investment plan
· Road show plan.
1.5 Key Recommendations
1) Focus efforts on becoming a niche global player in sales and customer care (voice)
2) Launch an international go-to-market strategy to attract investors once the undersea cable is in place
3) Build a track record in BPO&O by targeting Africa-friendly companies in the US and UK before targeting other global companies
4) Priorities large-scale players (>250 seats) and offer contained incentives for first movers
5) Show government commitment to the industry by offering global incentives in line with other BPO countries (e.g., a modified EPZ framework)
6) formalize the facilitating role of KenInvest in the short term, before moving towards approving a one-stop shop
7) Pass the Freedom of Information Act and begin the process of enacting data privacy and security legislation
8) Review labor law for export services
9) Use the ICT Board to drive the effort until the industry reaches critical mass and a NASSCOM-type body emerges
10) Improve the international perception of Kenya abroad, specifically through the Brand Kenya initiative
11) Adjust common curricula across all universities to deliver basic BPO skills
12) Implement short-term, specialized and highly practical BPO training programmes for operators, managers, and IT engineers at selected universities
13) Coordinate university–industry collaboration to develop specialized technical skills for the IT industry
14. Ring fence Ksh 8 billion (USD 95–105) million over the next 6 years to develop the industry, excluding the funds required for Brand Kenya
1.6 Future plans for the BPO Program:
· Submit the proposal to government to ring fence the required Ksh 8 billion (USD 95–105) million to enable implementation
· Work with donor community to fund all the recommendations or some components
· Form a BPO secretariat as per the study recommendations with members drawn from the ICT board and the ministry of information and communications.
· Form a BPO skills task force
· Form a National BPO Steering committee to be chaired but the head of Civil Service Amb. Muthaura. The committee members will be drawn from key permanent secretaries and CEO’s of the State Corporations with BPO mandate such as KenInvest.
· Implement go to market strategy