Slashdot Mirror
Africa Enters Global Market For IT Outsourcing
nusratt writes "MarketWatch reports that many organizations 'are moving away from India as the place to outsource, because of the labor churn, and Africa supplies the highest rate of return on investments. New York's parking ticket system is managed from Ghana, Nigeria has an entire ministry for ICT, and Mauritius is building its own CyberCity. Gartner predicts that up to 25 percent of IT jobs today will be moved to emerging markets by 2010'."
Would you trust any sensitive customer data in Nigeria? Im not being racist, just that they dont exactly have a glowing track record.
Oh yes this is the country you want to trust for your outsourcing needs. "Thank you for calling Dell,.... Well sir I think I know how we can fix your computer problem, you see my uncle Prince Zambar the great had $434,000,000 (FOUR HUNDRED AND THIRTY FOUR BILLION DOLLARS) yadda yadda yadda."
Everyone that disagrees with me is a paid shill
And as it so happens the Nigerian ministry of ICT has developed a product for the US Department of Homeland Security. Problem is, that the DHS can only contract out to a US based company or individual. Seeing as this contract is worth 480 MILLION DOLLARS, they will be glad to give you 10% of that, if you were to act as an intermediary.. There are just a feeeew formalities to be handled, like, oh, a Nigerian ICT business license, and this thing called a Remmitance Fee. Honest truth. They e-mailed me about it just yesterday.
SCO employee? Check out the bounty
Nigeria is like the internet scam capital of the world they lack the legal infrastructure to be a trustworthy place to do business.
Thats not to say they couldnt turn it around...but its going to take a lot of work.
Whatever about the labour markets in India and China, the real reason for this move is too keep wages, everywhere, down. If the Indian or Chinese programmers start asking for an extra 50 cent an hour, move it to Africa. And hey! There's still South America and Latin America id things go wrong there too!
I know outsourcing is supossed to bring everyone up to the same level, but what happens if a cycle emerges, whereby companies just pick a region on a decade by decade basis, keeping wages down permenatntly! They'd like too you know. But that's worst case senario
Best case, years of outsourceing leads to an equalisation of wages globally. Lets just hope those wages are the level we're used to and not the level programmers in El Salvador.
May the Maths Be with you!
"Outsourcing says there is also a drive to follow the sun, to allow them to offer services 24/7 (24 hours, seven days a week)."
For such a buzzword driven article, they have to explain 24/7? Damn.
I think I need a new sig here.
It's not super in depth, but over at cio.com they have interactive maps comparing different parts of the world for outsourcing.
Yeah, i'm glad money is flowing into Nigeria, as i am about to complete a transaction with a Nigerian prince that will settle my money problems for good. I laugh at thee.
"If God created us in his own image we have more than reciprocated." - Voltaire
Dear Sir:
I represent a technology company employing thousands of programmers whose founder recently suffered an untimely demise. Without his leadership, these programmers remain without work, and soon will drift away to find other jobs with the government. If I could find an overseas company to employ these programmers, we could avoid the government acquiring these workers and save your company millions of dollars in the process. I propose that you keep 90% of the savings, while 10% goes to me as a finders fee.
There is nothing unethical about this transaction.
We must act now to take advantage of this situation. We will need funds to write a proposal for your signature to complete the outsourcing. Please send me the account numbers for your corporate accounts.
Sincerely,
Prince^H^H^H^H^H^HCIO Mgumbi
Maybe now we can understand the person on the other side of the phone
Really now. India and Taiwan I can imagine as good sources for cheap labour. Stable and growing economies backed by a stable enough political systems. Now about most of Africa then? Only the countries at the northern most end and the southern most end ( Morocco, Libya, Algeria, Tunisia, Egypt and South-Africa. ) are anywhere near stable. The countries in the middle are plagued by atrocious economies that can't support anything, absolute lack of anything after YEARS of prolonged warfare and famine, no political stability whatsoever and plenty of tribal conflicts to boot.
I would think twice of investing resources in a country where the next day you might have to deal with 50k refugees from your neighbor camping on your grounds, the local fundamentalist warlord taking over control of the country and/or a tribal warfare because you've employed someone from tribe Z which pissed of tribes A to Y.
Hate me!
FYI The the nation that produces the most spam is the Good Ole USA. Just because this scam is popular in Nigera dosn't mean that most nigerian's are scam artists. A couple of months ago over 500 scammers were arrested. Of course slashdot decided not to publish the story.
autopr0n is like, down and stuff.
I'm working on a very efficient business model that I will implement very shortly... it goes as follows:
Good Day Sir,
My name is John Smith, I am a district manager at the New York Bank of Commerce (NYBC) and I am contacing you to obtain your help in an urgent matter.
Several weeks ago, Prince Adhi-Butta Gambei, passed away in a plane accident on the coast of Los Angeles, leaving in our safe a fortune estimated to no less than 2,600,000,000 nairas. Yes, that is 2 Billion, six hundred thousand nairas (approximately USD $20,000,000 or Twenty Million US Dollars).
With your help, I believe I may have an opportuny to move these funds to a separate account before my government can take possession of these funds but I need the help of someone familiar with the nigerian political system and I will provide you with detailed instructions that will help you pretend that you are the legitimate heir of Prince Adhi-Butta Gambei.
Once the funds are transfered in your NYBC account, I will move these funds immediately to an off-short account, leaving in your NYBC 30% of the amount. That is 78,000,000 nairas... YES!! Seventy Eight Million nairas (or USD $600,000).
However, openning an account at NYBC will require a minimum balance of USD $14,000 (1,820,140 nairas).
I was able to place $6,000 of my personal funds in this account, however I require your help in providing the remaining $8,000 (1,040,080 nairas) in order to reach our goal.
Best Regards,
John Smith
Seriously, if the labour is as skilled, what's the justification for keeping the labour in the 1st world? Moral crusading on the idea that this would only be justified if the outsourced workers were paid an identical wage falls flat on its face; "victims" of outsourcing would be identically as pissed as they are now as they're having wages undercut. We're going to have to admit sooner or later that your average African or Indian brain can process the simplicity of IT work as well as your average Euro-American IT worker. If you ask me, offshore workers still have a very large hurdle to jump in order to become as useful in processing IT labour: predominant mastery of major lingua francas.
As an African I know that his is one prediction that is not going to become reality.
There's a few places in Africa worth the trouble.
In the south, only South-Africa and only if the government can control itself and not become like the rest of Africa.
In the middle, maybe Ghana.
Up north, maybe some of the Arab countries.
I read an interesting article the other day. This article was describing Canada as a great place for the U.S. to outsource its jobs, because:
...
1. same time zone
2. same language
3. similar work ethics and culture
4. lower wages
5. highly educated
6. geographically closer
Makes sense, eh?
Simpy
hurriedly pasted text (before we start getting the: bandwidth exhausted for the next millennium message)
By ECT News Syndication Desk 07/18/04 5:49 PM PT
There are many areas in which African countries, eager to move into this space, can carve out a niche for themselves. The lucrative call center sector is one such area. Creating an environment that makes offshore outsourcing in Africa attractive can have many positive spin-offs for the continent as a whole, not just in terms of increased employment, additional revenue and new skills, but also in terms of changing the perception the developed world has about Africa.
With the rising cost of local production and labor in developed countries like the United States, many companies, especially in the IT arena are looking to the developed world for answers -- and finding them. Countries like India have successfully positioned themselves as niche providers of outsourced labor in IT and are reaping the benefits. And, as analysts continue to predict a growth in this type of outsourcing, the opportunity is ripe for other developing countries to tap into this lucrative market. The question is: Can Africa capture a share of the offshore IT market?
US research firm Gartner Ine is predicting that the outsourcing segment will continue to outperform the western European IT services market overall, growing by 3.1 percent in 2004, then rising steadily during the next three years to an annual increase of 8 percent in 2007. Moreover, as a result of global outsourcing trends, Gartner predicts that up to 25 percent of traditional IT jobs in many developed countries today will be situated in emerging markets by 2010. The move to offshore outsourcing is spurred on by increasing pressure on companies in the developed world to generate profits and reduce costs. Anton Groom of MBS Outsourcing says there is also a drive to follow the sun, to allow them to offer services 24/7 (24 hours, seven days a week). "It therefore makes sense to have offices located in the three primary time zones," says Groom.
He adds that with a client base expanding globally, it also makes sense to provide clients with a global delivery model. As the developing world gains momentum in creating pools of qualified, skilled talent, outsourcing to these regions becomes more attractive.
Following India's Lead
India has managed to create a niche for itself in this area, but it has not happened overnight. Amar Vakil, CEO of Lintas, a US-based management-consulting firm, and founder of the Foreign Investment Promotion Council, explains that there are specific factors that have enabled India to position itself in such a manner. These factors are predominantly a skilled workforce and appropriate infrastructure.
"Twenty to 25 years ago, India was an underdeveloped country. There was a brain drain of skilled labor to developed countries, where, for example there was a need for engineers," says Vakil. "Ten to 15 years ago, people like me, with similar backgrounds, decided to move back to India and there was a huge impetus from government to build world class communications networks. Government started dabbling with public-private partnerships, which now, after 10 or so years are proving very effective."
While this may not be easy to replicate, Vakil believes there are lessons to be learned from India and other countries like the Philippines which have attracted a strong outsource base. "The playing field is level. It is not India's game at all," he says. Although India was one of the first to position itself in this way, "there is an opportunity for other countries to tap into this potential".
Where India focused on information technology and software development, African countries wanting to tap into this opportunity will need to look at IP-enabled services.
Everdream founder and vice-president, Lyndon Rive, agrees that Africa can move into this arena. "Third world countries are getting educated enough to offer IT
i live on an alternate planet
Eventually, the IT industry will be spread evenly across the entire globe. We're like plumbers. Everyone needs a plumber and everyone needs PC techs, IT managers, et cetera. I'm sure the plumbing industry started out in a few locales and plumbers got pissed when their company decided to hire plumbers and train plumbers in Africa instead of sending the plumbers back at home to do the job.
What is your penile percentile?
Yea all those deaths of AIDS in Africa..those deaths used to be counted as starvation, diseases brought on by Malnutrition, parasites, dysentery, diseases and the like. If AIDs was truly an "epidemic" as they say such as other diseases then 3/4 of the entire African continent would be dead by now after 25 yrs of HIV/AIDS infection. Deaths (such as from TB) that used to be counted as due to a specific disease or the horrid living conditions are now classified as AIDS "related" so the countries can get UN money which the corrupt governments promptly siphon away. There are many studies that show that a lot of what we hear about HIV/AIDS are myths, and are not supported by sound science. But these voices have been silenced by the drugs companies and the researchers who live off of them as well as the companies live off Gov't funding for AIDS.
In this tested and failed system, multinational corporations no longer need to pay training costs for their workforce. Governments also compete by subsidizing infrastructure - and sometimes by direct cash subsidies too.
God forbid we actually train Africans in IT so that they could deal solve their own economic challenges.
Information: "I want to be anthropomorphized"
Oh yes, offshore outsourcing is going to be huge! Oh and by the way, we do have our own offshore outsourcing consullting services!
Not saying they are wrong, but you just gotta wonder if they may have alterior motives....
I read about that "500 scammer arrest" here on slasherdot. Not sure-don't recall- if it was a standalone article or a reference in a subthread though, but defintely it was here.
My bottom line as a past identity theft victim is, I don't trust anyone or anyplace with my info now, although you are forced to provide it in some cases. I now use cash as much as possible, don't have an ebay or paypal, etc, account,never use them, don't pay any bills online, and tend to use postal money orders a lot for buying things "remotely", and even then, only if it's impossible to find or order what I want locally in a brick and mortar store. Yes, it's limiting, but still doable in our society, but it gets increasingly hard to do. It seems every business out there wants all your info, and nowadays every other website wants your info just to look at the website. Screw it. I love the *theory* of the internet, and I use it up to what my personal-choice limits will allow now, but the *practice* of the internet as regards any sort of rational "security" is a 50/50 crapshoot near as I can see as soon as "money" is involved in any manner. If your software isn't insecure, then the humans at the other end might be insecure.
Reasons why India is better to Invest:
,Mumbai Hyderabad ,Chennai there are other cities like pune,Ahmedabad , Coimbatore ,Mysore coming up big time to meet up the standards.upLittle towns have already become better.Villages are improving etc.Looks like workforce is improving
.Anyone who can bring big bucks to the family is hailed and treated like a hero.So English workforce is improving tremendously.India has 18 official languages.Jus imagine if People in US speak so many languages.Languages come with diverse culture,customs etc.And English is undoubtedly the uniting factor among diverse Indians.All Work is documented in English becuz most of them dont know many regional languages.
1.Upcoming Youth workForce:
I would like to remind everyone, that 50% of indian population is below 25 years of age and only 54% of popuation are literate.Slowly this is improving , people are imbibing english into their lifestyle more.After Bangalore, New Delhi
2.Upcoming alternative IT workforce:
Already there are overwhelming amount of indians whose undergrad major is mechanical or electrical or some other non comp-sci degree but still they are seduced for quick bucks in IT.Honestly if u have good aptitudde and some basics of programming, one can sustain in IT field with hardwork.I was thus saying there is an upcoming workforce there.
3.upcoming Quality English Workforce:
Importance of english is overstressed in schools.Indians watch a whole lot of English movies , listen to Music and its almost a status symbol if you are good with english.And besides , Nerds are the heroes in India.You would watch Indian heroes in movies are projected to have a strong academic background
4.Content with Salary
:
Most of the people with non comp sci majors who work in other areas earn half as comp sci workers.And if an IT employee asks for more money , that reform would not be easy cuz there are so many talented Indians wthout jobs stalking streets day and night to bring themselves and their families to a decent existence.Btw , The salaries provided to many IT people are very high already.They enjoy superior life style.The point is "Salary increase is minimal and would not be a burden to investros".So in the long run, they are stable and cheap.
I would still invest in India , cuz
1.Abundant and still latent talented English speaking IT workforce
2.Upcoming Quality of workforce
3.Democracy and approachable govt policies.
4.Already Established.
5.Investment cost is low and not likely to grow higher and would propagate to different unexplored places.
Sorry for the long Article , couldnt condense..
Hello , this is my way.
Which way is yours ?
btw there is no right way
The US standard of living is based on cosuming 60%of the worlds resources. So there is a problem bringing everybody up to that level.
...all these outsourcing companies run out of newer, cheaper places to go? Asia, Africa, South America - all these places, as they climb the economic ladder, will eventually not be the cheapest place to outsource labour to.
I wonder what sort of economic adjustments will happen when price isn't such a huge consideration in the provision of IT services?
Whatever about the labour markets in India and China, the real reason for this move is too keep wages, everywhere, down. If the Indian or Chinese programmers start asking for an extra 50 cent an hour, move it to Africa. And hey! There's still South America and Latin America id things go wrong there too!
I think that South America is already quite expensive for that alreay... Perhaps Central America instead.
Core business functions like customer support, coding, design, and manufacturing are leaving North America?
Admittedly I am a tin-foil hatter by nature, but its scary to me that corporations are throwing work en masse over the borders seemingly without concern for long term impact (loss of core competency in the North American organizations) or strategic risks (war, etc).
At what point to we say to ourselves, "shit, we just sold the farm but we still need to plant crops(!)"
Is the juice worth the sqeeze?
If Gartner says it, It MUST BE TRUE (tm). Clowns.
The essence if stupidity is this - the more we "compete" with third world countries, the more we as a nation are going to lose. Third world countries don't have our living standards, our infrastructure, or many other opportunities we have worked for for so many years. They don't require benefits, which thanks to our broken healthcare industry (read insurance racket) eat up huge portions of company dollars. They don't require fair living wages, benefits, any kind of job security. So how do we compete globally? Do we push our standards into the toilet in order to accomodate corporate greed and government corruption?
We have two options - force our standard of living down to the early 1900s level in order to "compete" (what we are doing now), or have a US-based revolution that redefines America as a self-sustaining entity - reliance on our own farmers, manufacturing industry, service sectors, etc. In this mode, we refuse to give up the quality of life we have built for ourselves, and start requiring other countries to come to our level playing field if they wish to participate.
What amazes me is that with America's huge installed base of great programming and IT knowledge, there is no influx of jobs coming from the other direction.
Are we SO overpaid that our economy must first experience a massive depression in skills, education and fair wages in order to "compete" (artificially) with the rest of the world? Do other countries' people actually believe that somehow they won't experience the same problems and that they will all become rich and famous; their management won't outsource back to America if the wages are cheaper?
Say what you will about Unions, but my friends, America's Corporate Greed is ready and willing to exploit you, and teach your management the tricks of the trade. If you think we're overpaid over here, then check our statistics on labor at the department of labor and statistics url:BLS. Note that union workers on average get a few $ more per hour than non-union. And yet, people still believe they are evil. This is typical claptrap from businesses that don't wish to impact their profit margins in order to "compete". How soon we forget the awful abuse our parents and grandparents experienced at the hands of large business - and the need that created unions in the first place - it hasn't even been a hundred years.
Remember that everything over here costs a LOT MORE than in India or other countries, even if the vast majority of crap (and I do mean CRAP) we buy comes from China (hello, WalMart).
So, anyone care to speculate where the bottom is, and when we'll reach it?
I remember debating some Indian IT'ers who said things such as, "But if we can do it cheaper, we have the right to the job."
I then said something like, "But what if say Etheopians came along and could do it for 30 cents an hour instead of your $2.00, putting you on the street?"
They dismissed the idea and thought I was joking.
Either way, brains are becoming a cheap commodity. The closer you stay toward marketing and dealing with customer whims the safer your career. The world is cranking out low-cost Phd's just like any other high-volume factory. One can learn J2EE even if they live in a tent and eat flies.
Table-ized A.I.
Comment removed based on user account deletion
So, fellow whiners and moaners, where do we find who's outsourcing and who isn't? I've looked a bit on the web and most of the sites seem to be done by 14 year olds with complaints about only one or two companies. Is there a real orginization that combats outsourcing?
Dedicated Cthulhu Cultist since 4523 BC.
Please be sure of your facts before you post, and try to avoid statements that are foolish, offensive, and wrong.
Firsly, Ghana is not an Islamic country in any sense -- 63 percent of the population is Christian.
While half of the Nigerian population is Muslim, it is not an Islamic country. Would you call Canada a Roman Catholic country? Unfortunately, there are a lot of sectarian tensions in Nigeria that sometimes result in violence. But it is not an Islamic state.
Secondly, there is very little reason to believe that religious beliefs and AIDS are somehow corelated. Just look at some statistics from west African countries:
Country / % Christian / % Muslim / Adult AIDS prevalence rate
Ghana / 63 / 16 / 3% (2001)
Nigeria / 40 / 50 / 5.8% (2001)
Niger / 20 / 80 / 4% (2001)
Chad / 35 / 51 / 5-7% (2001)
Benin / 30 / 20 / 3.6% (2001)
Cote d'Ivoire / 20-30 / 35-40 / 9.7% (2001)
Togo / 29 / 20 / 6% (2001)
--source: CIA World Factbook
Outsourced IT work is a great economic opportunity for African countries. They continue to be shafted on agriculture through US and EU farm subsidies, and on natural resources through international conglomerates, kleptocratic governments, and war profiteers.
Things like call centers and support centers don't cost much to set up, bring money to local economies, and provide jobs for skilled workers, giving a boost to education systems.
This will also create local markets for IT goods and services, creating a positive feedback loop -- as more people learn the trade, more people demand products and services the trade offers.
How long before we see a cheap, solar-powered PC running an African-brewed Linux?
Comment removed based on user account deletion
Money is not an end. It is a means to an end.
My own view is that short-term profit is NEVER as important as long-term survival. So many companies and so many people, though, rarely look beyond the next quarter's profits.
Until that attitude changes WORLDWIDE -- until money itself is seen merely as the tool that it is, not as some sort of object of worship -- I think we'll continue to see this sort of insanity in terms of hemorrhaging jobs overseas.
I fully expect that such a radical view will get moderated down as 'flamebait' or 'troll' or something similar. So be it. No amount of Slashdot moderation will change the truth.
Bruce Lane, KC7GR,
Blue Feather Technologies
Just two years ago I wrote
about future of African outsource market. It was modded funny...
The fundamental problem is this:
The governments of these African countries, like the government of India before them, are in the process of subsidizing the development of what is perceived to be a cash cow of limitless milkability, IT. This process is nothing more and nothing less than seizing money at gunpoint from other, more productive domestic industry (natural resources development as one example) or getting it from dumber countries (like, say, the US and its billions of dollars of foreign aid, ironically likewise looted from the American taxpayer), and giving it to another industry to make it grow in defiance of market forces. Governments are subsidizing the production of millions of PhDs, handing out favors to "tech-savvy" "entrepreneurs" and foreign companies to take advantage of the perceived riches of the tech industry, not realizing a couple of very basic tenets of economics:
ALL OTHER THINGS BEING EQUAL, WHEN SUPPLY GOES UP, PROFITS (AND PRICES) GO DOWN.
and
IT IS NOT POSSIBLE TO CIRCUMVENT MARKET FORCES. USING GOVERNMENT TO FORCE THE ISSUE LOOKS BETTER NOW, BUT COSTS MORE LATER.
The problem is, this is not an endless phenomenon. It wasn't profitable to locate things in India before, for a multitude of reasons (lack of infrastructure, lack of education, social problems, whatever). It will likewise be unprofitable in the future, when their millions of PhDs are hacking cabs in New Delhi to make rent, or becoming farmers. (You can see this process beginning now. The market there has reached capacity, and other places - like Africa, Land of Ceaseless Warfare, Spam, and Disease - are being seriously considered as places to invest in tech, because the market in India is getting too inflated.) It sure as hell has been unprofitable and/or just plain dumb to locate any form of tech industry capital in basically any African country, where the odds of its being nationalized, destroyed, or devalued in the customary and predictable political upheaval are astronomical.
The cornucopia of benefit from IT and tech in general is mostly illusory. It came about in the US largely through a government/Federal Reserve easy-credit policy in the 90s that allowed all manner of idiocy to get funding and look great on paper (AKA the dot-com boom - pets.com, anyone?), followed by the bust when all of these crappy investments based on bullshit were exposed as the stupid ideas that they were. Yes, there is some benefit to tech, as long as it enhances productivity and quality of life. No, its benefit on life and productivity are not infinite, nor is this benefit anywhere near as bountiful as some think. It seems that the governments of other countries, enthralled by the idea of a trillion-dollar business tax base (or "loot pond") springing up overnight with a minimum of effort, are going to go down this same road with precisely the same heartbreak at its end. The citizens of these countries would do better to leave their neighbors alone and spend their time farming and defending their property from invaders. After a few decades of respect of property rights and natural rights have set in, then they could begin working their way up the industrial/informational ladder, and would be in a much better positioin than we are now. (For that matter, we in the US should probably take the same advice.)
Oh well.
I am Chaos. I am alive, and I tell you that you are Free. -Eris
Outsourcing to Africa. That's great news. I thought it took more time to take outsourcing there.
Next on the list: Cuba and North Korea.
After which this outsourcing madness will - hopefully - stop.
chess