Communications and Technology Industry Research

Yankee Group (News - Alert), a technology research and consulting firm, announced at ITU Telecom Africa 2008 today that the time has come for countries in West Africa to gear up and compete for a larger piece of the offshore outsourcing market. ITU Telecom Africa 2008 is a four day event focusing on core issues relating to information communication technology (ICT) expansion in Africa and is being hosted in Cairo, Egypt.

 

In a recently published report, “Outsourcing in West Africa: Can Any of These Countries Become the IT Hub of the Future?,” Yankee Group analysts list some of the challenges facing these countries — including energy, infrastructure and stable governance. While energy needs are growing, insufficient power supplies and frequent power outages are affecting routine activities as well as commerce. Infrastructure is a major requirement in order be an attractive outsourcing market and the demands for good roads, airports and telecommunication networks must be resolved quickly.

 

The report further says that unstable governments and disruptive violence exist in some countries. The recent violent protests in Nigeria regarding growing energy needs is harming the country's image in the global outsourcing market. Also, the limited availability of workers with the appropriate level of education or skills is another challenge to be overcome.

 

"There are many positive attributes about West Africa that make this region attractive for foreign investors right now as the outsourcing market continues to grow worldwide," said Mindy Blodgett, analyst in the YankeeGroup’s enterprise research division. While acknowledging that there are many challenges facing outsourcing service providers in the region, she also says those service providers who invested in this region, and stuck with it, are now bearing fruit.

 

The report recommends that West African governments make education and training workers a top priority. Further, the governments need to establish a close working relationship with service providers and global companies seeking to do business in this region. As for service providers, they need to become more “green” and partner with key technology providers in West Africa. Service providers need to learn from their local employees and develop leaders from within.

 

"West Africa is a region of contradictions," said Tony Marson, senior analyst at Yankee Group. "With opportunities and challenges facing the region, the key to West Africa's future economic prosperity and its success as an outsourcing hub in EMEA is transitioning from being focused almost solely on commodity-related activities to diversifying and building robust service industries.”

 

He suggested the introduction of service ethics into the economics of the outsourcing market, and added: “West Africa must also learn from the mistakes made by countries more experienced with outsourcing, such as India, in order to accelerate the development of the outsourcing industry in this region.”

 

With established outsourcing markets in China and India becoming more expensive, emerging markets —  such as the countries in West Africa — have a window of opportunity to establish a toehold in this arena.

 

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