RECYCLING UNWANTED COMPUTERS TO NEEDY USERS IN AFRICA News round-up & Snippets On the money Africa's Digerati Useful websites and discussion lists Digital toolbox/ In search of the business model Jobs, people, events... Free small ads

If our correspondent is "off the mark" or you have factual amendments, mail them to us and we will include them in subsequent News Updates. If you'd like to contribute, write and let us know. If you need information about a particular place or issue, just send your questions in. We are always happy to follow up on readers concerns.

ISSUE NO 44 ON THE MONEY

SPOTTING THE TELEWORKING OPPORTUNITIES

Thus far, skills and infrastructural constraints have prevented most African states from developing strong information technology (IT) sectors. However, there are other e-business opportunities to be had. For example, much as manufacturing has increasingly located in lower-cost, quality centres over the past 30 years, any service that can be delivered digitally—such as software development, data entry, translation, accounting, bookkeeping, call centres, research, writing and editing—will increasingly be sourced internationally in low-cost, high-quality centres.

While Africa will never be able to match the number of IT professionals found in places like India—nearly 40% of the Fortune 500 companies outsource some of their software development to Indian firms, primarily in Bangalore—a small number of talented African firms should be able to become outsourcing partners for software and internet development firms from around the world.

Some are already doing so. Cyberplex Africa (http://www.cyberplexafrica.com) in Harare has emerged as Zimbabwe’s leading internet development firm, but a growing share of its business is outsourced jobs for North American web firms. Cyberplex Africa is also securing international jobs independently by matching competitors from rich countries on quality but underpricing them by up to 80%.

Similarly, development of e-commerce applications, primarily for the European and US markets, for clients such as British Telecom, Netlibrary.com and French publishing giant Hachette, accounts for about one-quarter of the business of MR Services, an information management firm in Mauritius recently acquired by US firm Lason. Costs to the international customers are about half what they would be in OECD markets, and MR Services expects outsourced e-commerce development to account for 60% of revenues within 18-24 months.

However, the emerging service sector shake-up will extend far beyond software development. There is an opportunity for African firms to provide a range of services, including data entry, bookkeeping and call centres. The first African movers in these areas include:

• CAFE Informatique (http://www.cafe.tg), an internet service provider in Togo that is developing a growing call-centre business. Using voice-over technologies and a dedicated satellite link—totally bypassing the local telephone service—CAFE is able to provide low-cost outgoing call services (such as "data scrubbing", or calling the names on lists to verify that information is correct). These call services are well suited to low-cost, low-skill operators. With training and experience, CAFE will eventually be able to move into higher-value operations such as incoming and outgoing telemarketing calls.
• ACS-BPS (Ghana)--an offshore facility of US-based Affiliated Computer Services-Business Process Solutions—which provides remote data entry of medical and dental records for insurance giant Aetna. At present, the ACS- BPS office in the US identifies clients, scans the medical claim forms and electronically sends these to Accra, where approximately 150 clerks input the data from the scanned images. Quality control is performed within the software package itself (comparing the scanned image with the inputted text) and then by a supervisor. The data is sent back to the US using a dedicated satellite link at the Ghanaian office. ACS-BPS has developed an arrangement with the major secretarial colleges in Ghana so that students have the opportunity to learn the software used by what has become one of the country’s fastest-growing employers. Employees at ACS-BPS earn US$100- 200 per month, compared with an average local income per head of US$32 per month.
• Doticom Services in Uganda, which is providing remote bookkeeping services to overseas clients. Documents such as invoices and receipts are scanned at the client’s site and sent electronically to Doticom’s offices. The information is downloaded in Kampala, the data is entered offline, and then electronically sent back to the client.

Clearly, the concept of teleservices is not particularly new—data entry centres for remote clients has been common in India, the Philippines and elsewhere for some time—but the internet will dramatically open up the market over the next five years, driving growth because of the ease of transfer of digital data over the internet, and the web’s ability to bridge the information gap and bring together geographically distant buyers and sellers.

However, if African firms are to capitalise on this opportunity they will need:

• Reliable, affordable and accessible telecommunications—especially low- cost, high-bandwidth internet. In countries with moribund state telecoms monopolies, only those rare entrepreneurs who can afford dedicated satellite links can hope to participate.
• An element of foreign investment by multinational corporations. As with manufacturing, foreign firms are among the leading innovators in developing countries, providing state-of-the-art technologies, access to an international client base and, arguably, the best wages.

Hence, governments that wish to benefit from the emerging international division of services need to implement the same policies that attract foreign investment in manufacturing, notably: a predictable business environment based on the rule of law, a developed human resource base and reliable infrastructure.

It is too early to tell which African countries will succeed and which will fail, but judging by available data—including the number of internet users, the state of the telecoms infrastructure and ranking in the World Economic Forum’s Africa Competitiveness Report—Egypt, Mauritius, South Africa and Tanzania will be key players, while Zimbabwe, Morocco and Botswana will have some, more limited, success stories. Many of the others, however, risk being left in the new economy just as they were marginalised in the old.

(source: ViewsWire Africa for http://www.AfricaNewsNow.com )

News Update is a free e-letter produced by Balancing Act that covers African internet content and infrastructure developments, It goes out to government, the private sector, education and NGOs. To subscribe, send a message saying "I want to subscribe" to info@balancingact-africa.com