Effects of Business Process Outsourcing on the Performance of Communication Industry in Kenya

Introduction

In a recognizable emerging market, it is significant interventions that can support the nation’s total growth. It is important, more likely, among the third world countries to improve the telecommunications and for the additional support for the growth of their economy. Even if the globalization is evaluated to give both positive and negative effects in both domestic and international business, still, the actions of the countries toward in facilitating the improvement should remain consistent because of the risks involved.

Background and Problem Statement

Africa is seems benefited from the introduction of business process outsourcing (BPO). As based on the research for development, there is a clear aim in bridging the gap of insufficient data and statistics on BPO in many African countries. The BPO sector in developed and developing countries provides empirical evidence and deeper understanding of the success factors for better inform policy decisions and investment choices. Both Kenya and Ghana, as regions of Africa recognized the nature of services involved in BPO. However, what would be the effects of BPO in the performance of the communication industry, particularly in Kenya?

Research Aim and Objectives

The main aim of the study is to identify the various effects of BPO in the country through concentrating on the communication industry. Bearing the hope that there is a great opportunity to bridge the gap of information, the objectives of the study are therefore set. First is to recognizing the pioneers of the idea and obtaining their anticipated results. Second is to identify the target emerging and mature markets in which the study can provide the deeper understanding on the policy decisions and investments within Kenya. And third is to relate the critical success and associated factors in BPO industries in developing countries compared to the level of improvement in Kenya.

Literature Review

The BPO is an independent Company duly incorporated in Kenya carrying on the business of a Business Process Outsourcing Operator in Kenya and is duly registered with the Communication Commission of Kenya. Moreover, the Government of Kenya has identified Business Process Outsourcing as having the highest potential to create employment for economic and social empowerment for the unemployed and especially the youth. It has been noted that the BPO operators in Kenya are disadvantaged by the high cost of bandwidth in Kenya and are therefore not able to compete on fair terms with other BPO destinations globally. But with the help of the negotiations and schemes all of the hindrances are eliminated (Kenya ICT Board, 2008).The BPO industries in developing countries promises to empower the policy and institutional environment, legal and regulatory considerations, incentives and infrastructure and bandwidth requirements, as examined with the developed countries. For Kenya, the effects of a bandwidth subsidy will be of special importance because the government promised to subsidize bandwidth costs up to 90 percent through a World Bank grant. While examining the capacity needs and training requirements, such as the choice of a BPO destination, trends, types, and operations (Wanjiku, 2008). The successful acquisition of a group of BPO in the shares of the communication is expected to continue (Singh, et al., 2009). Government of Kenya has identified BPO industry as a key engine for job creation for the country. The Government is keen to provide the best possible environment for this industry to grow fast. The cost of international broadband capacity has been identified as a key constraint which limits the growth potential of the BPO industry. The Government is looking at supporting the local BPO industry to buy bandwidth at nearly the same price level as what the industry competitors elsewhere are paying or at the expected post submarine cable availability costs (whichever is higher to guarantee sustainability). The project will provide targeted cost subsidies to the industry to level down the cost of the communications input (Kenya ICT Board, 2008).

Methodology

The suggested method in the study is the use of secondary information. The materials needed in order to facilitate and obtain the needed information are the annual reports, articles, business reviews, and Internet that provides ideas focusing on the BPO in Kenya. Through reviewing the contexts and analyzing the impacts of BPO, the study can draw the effects of BPO in the communication industry of Kenya. With the help of the findings, the study can generate its conclusion and assuring that the aim is satisfied.

References:

Kenya ICT Board (2008) Kenya Transparency & Communications Infrastructure Project [Online] Available at: http://www.kenyabposociety.or.ke/index.php?option=com_docman&task=doc_download&gid=3&Itemid=29 [Accessed 13 July 2010].

Singh, A., Khurana, A., Malik, R., & Goel, A., (2009) Business Process Outsourcing Newsletter, [Online] Available at: http://www.avendus.com/researchpapers/docs/Avendus_Outsourcing_Newsletter_October_2009.pdf [Accessed 13 July 2010].

Wanjiku, R., (2008) Africa to Benefit from IDRC Outsourcing Study, IDG News Service, International Data Group Inc. [Online] Available at: http://www.cio.com/article/339313/Africa_to_Benefit_From_IDRC_Outsourcing_Study [Accessed 13 July 2010].