OUTSOURCING & SHARED SERVICES FOR NGOs AND DEVELOPMENT PARTNERS: Summary of Presentation Highlights

Business Processing Outsourcing (BPO) and shared services have the potential of reducing costs and increasing efficiency among organizations. The First Outsourcing and Shared Services Forum for NGOs and development partners forum was organised in Nairobi, Kenya by AITEC Africa with a grant from the Rockefeller Foundation. The event brought together over 250 representatives of NGOs and development agencies, as well as BPO service providers. Over 70% of participants were from the NGO/development sector. The theme of the conference was “Optimising service delivery through shared services”.

Left: Michael Oyier, Rockefeller Media Consultant; Right: Dr William Brindley, CEO, NetHope, USA.

The event was a capacity-building process aimed at educating NGOs about outsourcing and shared services, and how it can apply in the development sector. The main objective was to inform the target organisations of the potential to reduce their costs and increase impact through outsourcing their non-core activities. Sean Moroney, Chairman AITEC Africa, said in his opening remarks that the forum was intended to ignite new partnerships and networks between service providers and the NGOs. “The BPO sector has opportunities for economic growth. Outsourcing has the potential to increase productivity in this sector”, said Dr Wiebe Boer, Associate Director, Rockefeller Foundation.

Speaking during the conference, Paul Kukubo, CEO of the Kenya ICT Board, who also represented the PS of Ministry of Information, Dr Bitange Ndemo, mentioned that one of the core functions of the board was to market Kenya as a BPO and ICT services destination. He noted that many applications and services in the government are provided by different suppliers and as a result ministries fail to benefit from economies of scale that could be achieved when such services are shared. The government is however in the process of establishing a shared services framework. Mr Kukubo pointed out that the BPO sector is maturing and the development sector should take advantage of the cost savings and efficiencies that can be achieved through outsourcing.

While presenting an overview of BPO Industry in Kenya, Gilda Odero, Chairperson of Kenya BPO and Contact Centre Society, acknowledged that there is inadequate information on what services BPOs are offering, and that the Forum would play a key role in advancing this process.  Speakers addressed the key issue of competitiveness and the value proposition that BPO services can offer NGOs. The BPOs in Kenya operate under the umbrella of Kenya BPO and Contact Centres Society which has been in operation for two years and now has 43 members. The BPO Society confirmed that presently, there is no known case of any NGO which has signed up with any of the member service providers. Zak Gaibi, a partner of McKinsey & Co, made a presentation on the Kenya BPO industry Report they recently completed for the Kenya ICT Board, and pointed out that Kenya needs to have a one-stop shop for investors to accelerate investment in the BPO sector to capitalize on the new niche Kenya can develop in the international outsourcing market now that the fibre optic cables are almost in place.

Presenters outlined the services on offer from outsourcing service providers. The various services offered by BPO include: call centre services e.g. help desk support, customer service, market surveys, sales/telemarketing, appointment booking, debt collection, email and chat facilities. Other services are accounting, animation and engineering. The major benefit of outsourcing and shared services is that organizations can concentrate on their core business, leading to efficiency in their service delivery. In addition, costs can be reduced. Another benefit cited was social responsibility to help the country’s BPO industry to grow.

Some of the outstanding case studies on shared services were:

NetHope, a non-profit IT consortium of leading international NGOs serving tens of millions of end beneficiaries each year in 150+ countries.

Samasource, which is linking US-based aid organisations and development agencies with BPO operators in Africa.

Tony Simons, Deputy Director-General of the World Agroforestry Centre (ICRAF), briefed delegates on the shared services partnership they have developed with the International Livestock Research Institute. He cited the following potential benefits and cautions:

• turn fixed costs to variable costs (transport, catering)
• flexibility of choice (service and provider)
• set minimum performance standards
• allows high independence
• not going to solve all our problems
• may not be cheaper
• not all aspects will work well

He provided the following useful outsourcing categories:

• Front office
• Customer releations
• Investor Relations
• Communications
• Training
• BACK OFFICE
• Legal Services
• Human Resources
• Finance
• Operations
• IT Services
• Technical/Research Support  

The Kencall Famine Relief campaign which has helped the government to manage hunger distress calls through a programme dubbed “Answering hunger one call at a time.” Members from communities in Kenya were able to dial 109 and this helped create a database which resulted in the government sending food aid to affected areas.

Cascade Global Kenya is providing contact centre services to the World Neem Foundation.

Fiona Smith of the GSM Association outlined the concept of an outsourced farmer helpline, leading to development of an information technology and shared services architecture to compile a database for the farmers’ helpline.

At the end of the presentations, the participants were divided into the following four workgroups to discuss how they could match needs with services on offer in specific areas of expertise:

Financial Services: First concern was the role of financial institutions in providing finances to small BPOs. Small BPOs are unable to acquire business loans as intellectual material can not be put as collateral for their loans. In this aspect, stakeholders felt that there needed to be policies within the government that allow for such SMEs (Small and Medium Enterprises) to acquire loans. Human resource structures in NGOs are altered when these NGOs outsource.

Other points raised included the following:

• Distribution of Funds – A number of global NGOs had funds available but had difficulty in the disbursement due to the multitude of reporting conditions given by the donors
• Financial Management – Smaller NGOs quickly out grow their capacity to track funds and provide proper accounts. These NGO’s would benefit from an organization providing on demand/web based accounting services.
• The importance of being able to provide an Impact Analysis to the donors was discussed and again a central service provider would be useful.
• Numerous opportunities could be seen for providing services to the unbanked.

Human Resources: The participants discussed the impact of outsourcing on NGOs human resource structure. Issues that came up included: salary surveys when negotiating with donors, BPO links with service providers to create market analysis, on job training issues, and designing a process.

Customer Care and Contact Centres: This group focussed on Policies, Procedures & Processes:  NGOs were interested in what 3Ps the operators had in place. Operators have Non-Disclosure Agreements (NDA’s) with their staff and clients. Resources allocated to specific clients are not utilized for other clients. In cases where two clients with similar interests are being served by one operator, the two accounts are kept physically separate and are accessible only to the account staff. NGOs also suggested that the operators should offer them a service layered price-wise depending on the confidentiality and complexity of the work involved – which is an industry norm currently. There was a desire expressed by the NGOs to have an industry wide standard with respect to the 3Ps.

ICT: The Moderator of this group, Adam Bricker, Chief Information Officer, World Vision International, advised the NGO sector to be good customers. i.e. they should know what exactly they want from the market, for their outsourcing suppliers to effectively deliver what is demanded.

In conclusion to these discussions, Dr. William A. Brindley, CEO of NetHope, urged delegates to adopt a proactive approach. One should Listen, Learn and then Lead. “I believe each and every person in this forum is able to put Kenya on the global map as a recognized leader in ICT and BPO service provider. Finally, do not forget the words of Winston Churchill: ‘Never give up, never give up, never give up, never give up, never give up, never give up, never give up!’.”