Last month something very interesting happened, the realization by the ICT community that the there was something amiss with the Kenya Communication Amendment (KCA) of 2008 Bill that was passed into law and became an Act December last year . The media fraternity who were accused of trying to hijack the Bill were up in arms using all tricks in the book to stop the Bill’s ascension to law and wanted it booted out of parliament for clauses that they baptized “draconian”.
While this was happening, the ICT community sat pretty and became spectators as the duel between the Government and the Media industry intensified and at some point even cheering the Government to go ahead and pass the bill into law. The wishes of the IT industry were heard and rewarded with the Kenya Communications Amendment Act of 2008 which sort to legislate the entire communication sector including IT, Telecoms, Media and Postal sectors.
Now, like the Media sections of the law, the IT section had some very dangerous clauses that had been proposed initially and other serious weaknesses on e-Transactions. It was sort of agreed in one of the stakeholders meetings that the IT sector should support the Bill its flaws notwithstanding. Reason; the law making process was long and winding, and therefore it would be a major blow to the industry should the KCA Bill be thrown out of parliament. It had already taken two solid years to get the Bill on the parliamentary calendar.
So the compromise position was that the Bill should be allowed to go through and then work towards amending the weak areas through ministerial regulations, a practice that is allowed in law. In fact, it was agreed that since there was an existing draft e-Transaction Bill, all the articles on Electronic Commerce in the KCA would be expunged and form a new Bill to be pushed through parliament. This is why most of the IT players and advocates voted with the Government when it came to the KCA Act. But it appears that the proposed amendments and regulations will require time to be in place, meanwhile, the law is in place and is already becoming a challenge to the industry.
The industry was in shock last month when they realized that the Kenya Information Centre (KENIC), a public-private-partnership entity that has been managing the country’s ccTLD was operating illegally, sort of. According to the new law, KENIC needs to be registered by the country’s communications regulator, Communication Commission of Kenya (CCK) for them to continue managing the .KE name space. The law has also opened up competition on the second level domain name registration, an area that until now was a reserve of KENIC.
This is a classic case where global best practices and local laws clash. KENIC is the only body recognized by the International Council for Assigned Names and Numbers (ICANN) as the bona fide managers of the .KE. The law did not take cognizance of international arrangements neither did it provide explicit guidance on how to manage the introduced competition. So as the stakeholders pull in different direction and taking different positions on this, it is paramount that the holes in the KCA Act are sealed urgently.
As agreed, the law needs to be placed under a microscope again, with all stakeholders alert and engage in panel beating it to acceptable conditions. Otherwise what we are seeing now, is just the tip of an iceberg.
Monday, June 29, 2009
Can we please get real!
To gain sustainable competitive edge, especially in this period of global economic mess, a country has to leverage technology in a big way. This is what the Obama administration knows and is doing. They are aware of the power and catalytic effect that ICT has to other sectors of the economy and in this realization, they are pumping a whooping US$ 71 Billion on IT in addition to appointing the first federal CIO in the person of Vivek Kundra to control this massive budget. Kundra’s main responsibilities will be to manage technology interoperability among agencies that will make the government transparent and efficient.
It is this sort of commitment that makes IT work, where a solid investment is made and mapped to a specific measurable outcome. In East Africa, we have never really seen this kind of commitment to investing properly in IT and yet we expect technology to work for us. Having worked with various government departments in the region, requested budgets are normally cut by more than 50% without due consideration of the kind of impact that this may have on the proposed projects. This is one of the reasons why many government initiatives never see the light of day.
For starters, just look at the budgetary allocations that IT has been receiving from the exchequer in the past years. I think in the Kenyan context, last year could have as well be know as the IT bumper harvest, the sector received what is the largest ever allocation, KSh 1 billion. This is thanks to the persistence of one Dr. Bitange Ndemo and the architects of the East African Marine System (TEAMS). That cash went to underwrite the commissioning of the feasibility study of the East African Marine System (TEAMS).
I did not get a chance to participate in the pre-budget hearing for the sector this year, however, I have some documents that have indicative figures that have been put forth by the Ministry of Information and Communication for consideration in the 2009/2010 budget estimates. My suspicion is, these figures are indicative of the region, given that Kenya is the largest economy in the region.
Under the Medium Term Expenditure Framework (MTEF) 2009/10 – 2011/12, ICT falls in the Research, Innovation and Technology sector. This sector is made up of two ministries, Ministry of Higher education and Technology and the Ministry of Information and Communication together with thirty-three semi-autonomous government agencies including the Government IT Services, Directorate of e-Government and the Kenya ICT Board.
Total requirement for the sector in 2009/10 amounts to KShs. 92.4 billion up from Kshs.45.6 billion in FY2008/09. These comprise of KShs.53.4 billion required for financing recurrent expenditures while KShs.37.9 billion will be required for development expenditures. This budget financed from external resources and internally generated revenue from the institutions to the tune of KShs.10.9 billion leaving a net of 81.4 billion to be financed through the exchequer. However, the Government allocation to the Sector is only KSh 37.5 billion, less than 50% of the sector requirements.
If you dig into the numbers you realize that the core IT budget is about 24.3 billion, 50% of which is recurrent expenditure. Looking at it closer, you get to realize that most of the development allocation (10 billion) goes to a sub-programme titled, Data Management with 9 billion allocated to statistical management system. Then you start to see the gaps. 24 billion, less 10 billion for a statistical managemnt system, less 9 billion for infrastructure, less another 4 billion for training and your are left with 1 billion for everything else outside those areas. As if this is not complicated enough, the sector will only receive 50% of this allocation.
We certainly need to get serious and do things right. Under-budgeting is a sure way of having white elephants in the name of stalled projects which in itself is a waste of resources. So lets start by scoping what we really need and that can be accomplished with the available resources. I would strongly advise that we should not get into any new projects if we do not have the necessary budgetary allocations. Trying to implement a 10 billion project with 5 billion will not have the desired effect, so lets get real.
It is this sort of commitment that makes IT work, where a solid investment is made and mapped to a specific measurable outcome. In East Africa, we have never really seen this kind of commitment to investing properly in IT and yet we expect technology to work for us. Having worked with various government departments in the region, requested budgets are normally cut by more than 50% without due consideration of the kind of impact that this may have on the proposed projects. This is one of the reasons why many government initiatives never see the light of day.
For starters, just look at the budgetary allocations that IT has been receiving from the exchequer in the past years. I think in the Kenyan context, last year could have as well be know as the IT bumper harvest, the sector received what is the largest ever allocation, KSh 1 billion. This is thanks to the persistence of one Dr. Bitange Ndemo and the architects of the East African Marine System (TEAMS). That cash went to underwrite the commissioning of the feasibility study of the East African Marine System (TEAMS).
I did not get a chance to participate in the pre-budget hearing for the sector this year, however, I have some documents that have indicative figures that have been put forth by the Ministry of Information and Communication for consideration in the 2009/2010 budget estimates. My suspicion is, these figures are indicative of the region, given that Kenya is the largest economy in the region.
Under the Medium Term Expenditure Framework (MTEF) 2009/10 – 2011/12, ICT falls in the Research, Innovation and Technology sector. This sector is made up of two ministries, Ministry of Higher education and Technology and the Ministry of Information and Communication together with thirty-three semi-autonomous government agencies including the Government IT Services, Directorate of e-Government and the Kenya ICT Board.
Total requirement for the sector in 2009/10 amounts to KShs. 92.4 billion up from Kshs.45.6 billion in FY2008/09. These comprise of KShs.53.4 billion required for financing recurrent expenditures while KShs.37.9 billion will be required for development expenditures. This budget financed from external resources and internally generated revenue from the institutions to the tune of KShs.10.9 billion leaving a net of 81.4 billion to be financed through the exchequer. However, the Government allocation to the Sector is only KSh 37.5 billion, less than 50% of the sector requirements.
If you dig into the numbers you realize that the core IT budget is about 24.3 billion, 50% of which is recurrent expenditure. Looking at it closer, you get to realize that most of the development allocation (10 billion) goes to a sub-programme titled, Data Management with 9 billion allocated to statistical management system. Then you start to see the gaps. 24 billion, less 10 billion for a statistical managemnt system, less 9 billion for infrastructure, less another 4 billion for training and your are left with 1 billion for everything else outside those areas. As if this is not complicated enough, the sector will only receive 50% of this allocation.
We certainly need to get serious and do things right. Under-budgeting is a sure way of having white elephants in the name of stalled projects which in itself is a waste of resources. So lets start by scoping what we really need and that can be accomplished with the available resources. I would strongly advise that we should not get into any new projects if we do not have the necessary budgetary allocations. Trying to implement a 10 billion project with 5 billion will not have the desired effect, so lets get real.
May the real BPOs please stand up
Frost and Sullivan, a respected research and management consultancy firm based in the US, predicts that the full impact of the economic slowdown will be felt by the outsourcing industry in the coming year or two. And advises that outsourcers must be quick enough to react to developing conditions and rethink business strategies if they are to maintain growth in the face of a slowing global economy.
I suspect Michael Joseph, Safaricom’s CEO read this report and went ahead to make a rather unpopular business decision among the local Business Processing Outsourcing (BPO) community. This decision was to invest and manage an Sh800 million ultra-modern call centre; his motive, to be able to answer 85 percent of all customer care calls within the first 20 seconds of the first ring. This to me, reads like a move to increase operational efficiencies. Over the last one year, Safaricom has been accused of poor customer care and ever engaged customer care lines and therefore a dedicated call centre to solve customer problems is a welcome addition.
It is, however, interesting that Safaricom decided to invest huge sums of money in a service that could have been easily out sourced, or so you think. Safaricom defied experts and global best practices, in making this decision and that is probably what Frost and Sullivan are talking about. I’m reminded that they actually wanted to go that way and even put out a tender sometime last year for a BPO operator to run the call centre. With BPO profiled as a pillar within the Vision 2030, it would have been politically correct for Safaricom to go that way, but they chose to a different route.
So why did Michael Joseph chose to go against the grain? Here allow me to speculate since I’m not the man who manages the company that has in three consecutive years won the East African most respected company award. As stated earlier, Safaricom had no intention of running the call centre. They even did not want to invest in putting it up in the first place and were going to work smart by outsourcing this non-core activity to the experts, read the BPO operators. But after putting out a tender for this work twice, they realized that they could not identify an operator who was ready for their kind of work.
It has been reported in different media that the local BPO operators could neither meet the technical specifications nor the pricing expectation. Something that reminds me of an observation I made a while back on this new economic sector that most BPOs were founded on unsustainable business models and lack vision. It is estimated that more than 75% of the existing BPOs were formed after the Government through the Kenya ICT Board announced that they would provide subsidies to BPOs as a way of growing the sector in line with the Vision 2030. So to expect companies that were formed on this premise and looking out for Government handouts to invest in the kind of infrastructure that Safaricom was looking for is to say the least, a long shot.
Then, there is the issue of focus. BPOs in the country have been spending too much time looking for business outside the country that they seem to have forgotten to build capacity in their operations and look for business locally. There are many organisations like Safaricom who would like to outsource there non-core but are stuck to them because there are no suitable suitors. It is my humble submission that there is need for the BPO sector to reorganize and restrategise for it to play a meaningful role in the development of the country and to contribute effectively in our ambitious vision 2030.
I suspect Michael Joseph, Safaricom’s CEO read this report and went ahead to make a rather unpopular business decision among the local Business Processing Outsourcing (BPO) community. This decision was to invest and manage an Sh800 million ultra-modern call centre; his motive, to be able to answer 85 percent of all customer care calls within the first 20 seconds of the first ring. This to me, reads like a move to increase operational efficiencies. Over the last one year, Safaricom has been accused of poor customer care and ever engaged customer care lines and therefore a dedicated call centre to solve customer problems is a welcome addition.
It is, however, interesting that Safaricom decided to invest huge sums of money in a service that could have been easily out sourced, or so you think. Safaricom defied experts and global best practices, in making this decision and that is probably what Frost and Sullivan are talking about. I’m reminded that they actually wanted to go that way and even put out a tender sometime last year for a BPO operator to run the call centre. With BPO profiled as a pillar within the Vision 2030, it would have been politically correct for Safaricom to go that way, but they chose to a different route.
So why did Michael Joseph chose to go against the grain? Here allow me to speculate since I’m not the man who manages the company that has in three consecutive years won the East African most respected company award. As stated earlier, Safaricom had no intention of running the call centre. They even did not want to invest in putting it up in the first place and were going to work smart by outsourcing this non-core activity to the experts, read the BPO operators. But after putting out a tender for this work twice, they realized that they could not identify an operator who was ready for their kind of work.
It has been reported in different media that the local BPO operators could neither meet the technical specifications nor the pricing expectation. Something that reminds me of an observation I made a while back on this new economic sector that most BPOs were founded on unsustainable business models and lack vision. It is estimated that more than 75% of the existing BPOs were formed after the Government through the Kenya ICT Board announced that they would provide subsidies to BPOs as a way of growing the sector in line with the Vision 2030. So to expect companies that were formed on this premise and looking out for Government handouts to invest in the kind of infrastructure that Safaricom was looking for is to say the least, a long shot.
Then, there is the issue of focus. BPOs in the country have been spending too much time looking for business outside the country that they seem to have forgotten to build capacity in their operations and look for business locally. There are many organisations like Safaricom who would like to outsource there non-core but are stuck to them because there are no suitable suitors. It is my humble submission that there is need for the BPO sector to reorganize and restrategise for it to play a meaningful role in the development of the country and to contribute effectively in our ambitious vision 2030.
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