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Fiji’s now home to call center operations for companies such as ANZ’s Quest operation and ACS. The latest to arrive on our shores are South African outfit, the Mindpearl Group. Alan Graham, Chief Commercial Officer for the company had this to say in industry publications:
Mindpearl has already undertaken extensive research and visits to Fiji, analysed real estate availability, the labour market and met with local government departments and telecommunication providers… Local government is keen to attract investment and job creation particularly in the Information and Communication Technology (ICT) sector.
For these reasons and others such as the population’s proficiency with English, the company selected Fiji over established BPO players like India and the Philippines. The creation of 10,000 jobs is a drop in the ocean for these players, but for Fiji it means building a viable and vibrant new sector to the economy–one capable of driving future economic growth.
Call centers are the first step in development of more complex BPO and ICT ventures, which include software and service development, assembly and sale of hardware and software, etc.
While researching the topic, I came across a report titled “Financing Technology Entrepreneurs & SMEs in Developing Countries: Challenges and Opportunities”, published by InfoDev, a clearinghouse for ICT and development related topics.
A key hurdle in getting from the early stages of ICT development to the more advanced stage where local technology entrepreneurs can create new firms, is the inability to acquire financing. The report is filled with policy recommendations and examples from other nations on how to overcome this deficiency.
According to the report, call centers may be the lowest rung on the services ladder but they are still amongst the more costly businesses to establish. Keeping the cost of business lower than our competitors is key to building the sector:
In the Philippines, the investment per seat ranges from US$4,000–6,000. The costs appear to be higher in Morocco and India. For an initial configuration of at least 50 seats, the average investment required to start a call center can be in the range of US$200,000–400,000 (Source: InfoDev).
Since outsourcing contracts provide a constant cash-flow reducing the need for additional financing for working capital, finding investment capital for such ventures is relatively straightforward. As more businesses are established in Fiji, the lending institutions and commercial banks will feel more comfortable in providing loans for such ventures.
Considerable hurdles remain in getting to the next stage. I urge policymakers to read the InfoDev report as it offers some clear examples of how to make the most of opportunities in ICT. Even in the early rounds, we have to start thinking about what the future of the industry will look like.
An article in the San Francisco Chronicle highlights an important emerging trend in the realm of business process outsourcing (BPO).
As countries that provide BPO services become more experienced and their workforce becomes more skilled, they can become more specialized and move up the value-chain. This allows for performing of more complex tasks for greater financial reward.
Improvements in communication technology make it possible to outsource more and more complex business functions. Knowledge process outsourcing is a subset of BPO and refers to the offshoring of these more complex business tasks.
From the Chronicle article we can get a sense of how current economic conditions are forcing small businesses to turn to this particular brand of outsourcing:
The recession has heightened interest in Web-based hiring halls such as oDesk, eLance, Guru, and crowdSPRING. Small businesses looking to expand without hiring full-timers are finding more professionals willing to work as independent contractors doing Web design, programming, marketing, videography and similar trades.
A San Francisco Bay Area entrepreneur needed the services of a web developer and was given a quote of $15,000 from a local Silicon Valley-based contractor:
… then he read about eLance, a contract work site based in Mountain View, and decided to contact some of the highest-ranked Web designers on that site. A company in Bangalore bid $3,000 to do the job and performed it to his satisfaction.
As Fiji takes its first steps toward building a BPO sector, it would be helpful for stakeholders to keep in mind the end-goal. Specialization is about the only way that a small nation like Fiji could go head-to-head with larger BPO service providers like India or the Philippines.
Industry leaders should identify a niche quickly and make sure the local workforce is adequately trained to take on the more complex roles that specialization demands. Moving up the food-chain in this manner will hopefully create experienced professionals who can bid on the types of contracts mentioned in the Chronicle article.