A Comparative Analysis of IT Outsourcing Readiness in the East African Community

By Nduwimfura, Philbert; Zheng, Jianguo | Iranian Journal of Management Studies, Spring 2016 | Go to article overview

A Comparative Analysis of IT Outsourcing Readiness in the East African Community


Nduwimfura, Philbert, Zheng, Jianguo, Iranian Journal of Management Studies


(ProQuest: ... denotes formulae omitted.)

Introduction

When organizations choose to move their IT services to low-cost countries, they are daunted by the task of determining which country or group of countries would be the best place to host their operations (Gartner, 2008). Currently, there are very few studies that address the IT outsourcing (ITO) problem at country level, most previous works deal with it at firm level. One of the most important contributions of our paper is to address the ITO question from a different angle, by comparing a group of countries and analyzing their readiness for ITO.

Emerging and developing countries are competing to host offshore IT operations from developed countries. East Africa was, until recently, one of the least digitally connected regions in the world; however, it is now experiencing a digital revolution brought about by the construction from the year 2010, of three sub-sea fiber-optic cables, which is radically changing the EAC population's way of life.

A number of developing countries have opted to increase global GDP through their IT outsourcing sectors. Countries in the EAC bloc, especially Kenya and Rwanda, have taken measures to advance their ICT sector's global competitiveness. One example of such measures is the establishment of IT hubs, following the model of Silicon Valley (Kenya's iHub and East Africa Data Center, Rwanda's kLab, etc). These two countries have now become technology success stories.

The potential impact of ICTs for economic development in the EAC is evident. As an example, Rwanda has already completed more than 3,200 km of fiber-optic network, connecting more than 230 government institutions in the whole country. The role of ICT in overall development has been proved by different studies (World Bank, 2009).

Globalization and ICT have brought opportunities that did not exist before to low income countries (Abbott, 2013). One of those opportunities is IT outsourcing, which is defined as the transfer of part or all of the IT functions of a firm to an external provider. IT outsourcing has reached a mature stage in developed countries, but it is still not well implemented in developing countries. Most developing countries have set their economic growth targets expecting ICT to play a major contributing role in their annual GDP growth. Countries like Kenya made plans to raise the IT share of total GDP from 5% up to 35% (Waema, 2008). Some developing countries are already experiencing a big contribution from their IT sector to the total GDP growth. One example is Ethiopia which reports that its IT sector contributes about 11% of the total country GDP (Nduwimfura & JianGuo, 2015b).

There have been reports of many benefits from IT outsourcing, but the most common ones include cost reduction through economies of scale and risk minimization, gaining competitive advantage, accessing skilled workers not available in-house, access to state-of-the-art technology, gaining more flexibility, etc. EAC countries are trying to take advantage of the possibilities offered by offshore outsourcing as an export industry.

There are nevertheless risks associated with IT outsourcing, they include the loss of control and ownership of IT strategy, the security of data, the risk of outsourcing partner getting out of business, hidden costs, the provider failing to meet agreed upon service level agreements (SLAs), the unavailability of critical systems, etc.

In Rwanda, the convergence of four factors unique to Rwanda drove ICT development quicker than the other sub-Saharan African countries: (1) educated emigrants and refugee returnees, (2) networking with communities, (3) political leadership, and (4) an under-contested political environment (Lacity & Rottman, 2008). Rwanda may indeed provide a model of leadership in ICT capabilities for other sub-Saharan African countries to follow.

One of the most famous IT innovations made in the East African Community is the mobile money transfer application M-PESA, which has revolutionized financial transactions for millions of users around the world. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

A Comparative Analysis of IT Outsourcing Readiness in the East African Community
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.