Nairobi: Kenyan Business Processing Outsourcing (BPOs) and IT service firms want the current procurement rules changed to boost competitiveness citing dominance by international counterparts. They want the government to make it mandatory for international firms to partner with local companies when bidding for IT project tenders, a move expected to encourage skills transfer and boost chances of getting a piece of the multi-million shilling ICT funds.
Mr Nik Nesbitt, the chief executive of Kencall, says lack of financial and technical capability has made it difficult for Kenyan firms to clinch the tenders on their own.
“Local BPOs lack the experience being enjoyed by our competitors from countries like India and this is why we are asking the government to change the procurement rules and make it a must for the foreign firms to partner with the locals,” said Mr Nesbitt. “We require a radical surgery on government policies in order to grow the BPO/IT sector, otherwise growth will be very slow,” he said.
The only Kenyan BPO firm that has managed to secure a government tender to digitise States law and the Judiciary documents is Digital Space, but only after partnering with DPH of India.
The push by the local BPO firms is mainly targeting tenders in the Ministry of Registration and Immigration of persons, department of births and deaths and that of Land. Already the Lands ministry has started its tendering process.
It comes just when a survey released by the Kenya ICT Board , dubbed Julisha notes that the country has been unable to develop an adequate pool of skilled IT personnel due to lack of big IT projects. “The common view was that there may not be enough big IT projects that can churn out a pool of skilled personnel— consequently there are not enough projects that allows professionals to exhibit or develop their skills,” read part of the Survey.
Mr Nesbitt’s position to compel the foreign firms to partner with the locals is supported by Mr Henry Njoroge, chief executive officer of Xtranet and Techno Brain BPO.
Mr Njoroge told the Business Daily that while the government may be encouraging partnerships, making it a requirement through changing the procurement rules will ensure that local firms are included in the large ongoing projects.
“What the government should do is come up with new procurement guidelines that stipulate that since technology is at the heart of Vision 2030, any company that is doing a government project that has never been done before must partner with a local company. All tenders should demand a partnership document with a local company,” said Mr Njoroge.
In the current situation, major outsourcing contracts from multinationals, similarly, are unlikely to land in the hands of local companies, primarily because the clients are extending their business to firms they have worked with in other markets, analysts say.
This year, foreign firms Accenture, IBM, Payment Solutions, SPANCO, and Tech Mahindra have won outsourcing contracts worth millions of shillings from the public sector and multinationals.
Payment Solutions Ltd, a South African firm, recently won a government tender to manage the public sector payroll in a bid to ensure civil servants do not commit more than two-thirds of their salary to paying debt.
IBM Corp, a US-based firm, and two Indian outsourcing firms — Tech Mahindra and SPANCO — have signed a Sh40 billion deal with telecoms giant Airtel to set up a five-year call centre service in Kenya and 15 other countries in Africa where Airtel operates.
Mr Njoroge says the current procurement rules allow bias for international competitive bidding for large tenders that need specialised expertise which most local firms do not have adding that the entry requirements to the industry in Kenya are very low.
Small tenders below Sh50 million are sourced locally but they usually require a low technology input while large projects such as automating the Judiciary and digitising the Ministry of Lands or changing the whole banking system requires the input of specialised software experts.
Mr Njoroge said that the industry in Kenya has many hardware and general software technicians but is lacking in specialised areas especially for projects that are being done for the very first time.
“I would say that there are many practitioners for the bottom of the pyramid but at the top, for specialisation, were are not yet there,” he said, adding that most of the large projects require someone who has relevant experience.
The government is digitising its documents – changing them from hard copy to electronic format with an aim of making them easily accessible in efforts to increase efficiency and transparency.
Information permanent secretary Bitange Ndemo, acknowledged the lack of expertise in some of the areas but said this is being addressed by firms such international firms such as IBM , TeleTech and Samsung who are partnering with the local higher education institutions to address this.
“We are in a crisis as the local individual BPO’s have been trying to invest some money on training their staff who are later poached after short while, ideally the government should put in money for training,” said Dr Ndemo.