Magazine article International Trade Forum

From Canada to Uganda, Business Process Outsourcing

Magazine article International Trade Forum

From Canada to Uganda, Business Process Outsourcing

Article excerpt

Business process outsourcing can be a win-win deal, even for small firms in developing countries.

Business processes that historically were kept inside the firm, such as accounting and similar paperwork, are increasingly being outsourced to places where costs are cheaper and back-office operations can be provided all day, every day, to keep up with commercial transactions.

So it is no surprise that business process outsourcing is enjoying fast growth. There are predictions of up to 20% increases in the business well into 2008.

Until now international brands have dominated the market. But developing countries can also compete - provided they are willing to make the adjustments and commitments to meet the standards demanded, as the participants in ITC's 2005 Executive Forum learned from a member of Uganda's association for outsourcers.

From paper to online

In Canada, Wall & Associates, an accounting company providing services to small businesses and independent professionals, had been processing most paperwork manually. It decided to try to increase its client base by providing online access to data entry. A family-run accountancy firm, Wall & Associates serves around 13,000 clients in Canada's major metropolitan areas. It already outsources to India and Uganda. In 2001, the Uganda Investment Authority came to Wall while investigating outsourcing opportunities for its country's firms.

As a result, Wall & Associates sent a mission to Uganda to explain outsourcing opportunities. Fifty professionals attended the presentation, resulting in 20 proposals. Cayman Consults of Uganda, established in 2000 and part of the 30-member Ugandan Outsourcing Association, won the contract to process receipts.

Training, meeting obstacles

The founder and chief executive of Cayman, Abu Luwaga, received training in Canada over three months on issues such as the tax system, attitude, time management, confidentiality and technical skills. He worked with Wall & Associates to develop a curriculum to train people in Uganda, focusing on information technology (IT), personal development and accounting.

"Our expectations were very high," says Mr Luwaga. "We invested in a large overhead of computers and provided expensive connectivity."

A major obstacle was the slowness and high cost of '" Internet lines - US$ 700 per month in Uganda, compared to US$ 50 in Canada. There were also confidentiality issues. Several of Wall & Associates' clients were reluctant to share information online. In addition, until recently, Internet policy in Uganda did not allow for Voice Over Internet Protocol, which was part of Wall & Associates' system.

Opening government's eyes

Nevertheless, following training sessions in 2002 and 2003, Wall & Associates certified 80 people. Cayman now employs five full-time staff, and recruits when needed from a pool of certified professionals who use their skills in either IT companies or accounting firms, or in IT institutes as trainers.

"One success story is what it takes to open the Government's eyes to potential in service sectors," explains Vincent Musubire, head of the Ugandan Outsourcing Association. "In Uganda, this case helped change government policies on telecommunications. The potential exists, but infrastructure is one of the main obstacles faced by small service providers. …

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