Business Process Outsourcing in Kenya Investigation of Factors Inhibiting Growth of BPO Companies in Kenya

A Project Report Submitted to the School of Business in Partial Fulfillment of the Requirement for the Degree of Global Executive Masters in Business Administration (GeMBA)This study sought to identify the factors affecting growth of business process outsourcing in Kenya. The study utilized the following research questions: what are the challenges facing BPO companies in Kenya? What are the benefits of BPO companies in Kenya and what are the key success factors for BPO companies in Kenya? This study utilized a descriptive research design in the course of the study. The population of the study was drawn from the BPO companies in Kenya. The total sampling frame in the population was 15. The 15 companies were derived from the database of the ICT board of Kenya an institution that promotes BPO companies in Kenya. Since this study was a census study, all the companies in the sampling frame were included in the study. The sample size was therefore 15. Data for this study was collected using a questionnaire. Data collected was analyzed for statistical measures of means, percentages, standard deviation, minimum, maximum and modes. Data analyzed was presented using figures and tables. This study found that the BPO companies in Kenya have not performed to expectations of majority of the people. In addition, most BPO companies in Kenya offered data entry and transcription services, call centers and IT services. According to this study, the major challenges facing BPO companies in Kenya are: lack of government support, employee related challenges, poor business environment, competitive challenges and customer expectation challenges. In addition, this study found that the future prospects of BPO companies in Kenya are very bright. The key success factors for BPO companies identified by this study are: availability of a skilled labour force, very high demand of BPO services in Kenya, Increased awareness and visibility of BPO companies, improved connectivity infrastructure especially Internet connectivity, the strategic location of Kenya and the international recognition of some Kenyan BPO companies e.g. KenCall which won an international award for quality BPO services. Other key success factors identified by this study are: the innovative and entrepreneurial spirit, similarity of Kenya cultures to those of USA and UK where majority of the BPO customers are drawn from. Finally, this study found that BPO companies are of benefit to customers, individuals and countries respectively. According to this study, BPO companies provide jobs and wages to employees who enhance a country’s economic growth and attainment of macro economic goals. On the other hand, companies (customers) are able to enjoy benefits from BPO’s through: reduction of operating and overall costs, focus on core business and competencies, access to world class equipment and services, quality improvement, professional work and reduction in the capital needs of the companies. This study concludes that, the major challenges facing BPO companies in Kenya are: employee related, financial, customer expectations and government specific challenges. In addition this study concludes that: the increased visibility and recognition of Kenyan BPO companies, innovative and entrepreneurial spirit, similarity of customers and Kenya BPO companies’ cultures, improved infrastructure and internet access, time zones, demand of BPO services and availability of a skilled labour force are some of the key success factors for BPO companies. This study further concludes that; the major benefits of BPO companies are job creation, wealth creation, reduction in operating costs of customers, access to world class equipment and services, quality improvement, professional work, reduction in capital outlays of customers and focus on core businesses and competencies by customers. This study recommends that, the government of Kenya forms fact finding trade delegation to visit countries with successful BPO sectors e.g. India whose recommendations will be implemented. Further, this study recommends that to reduce employee related challenges, BPO companies should adopt modern human resource management practices and systems. The government should review the existing regulatory and oversight BPO framework in Kenya in addition, to providing incentives for the growth of BPO companies in Kenya. In addition, this study recommends that BPO companies should establish training courses in BPO in partnership with institutions of higher learning. The government should also outsource some of its jobs to the BPO sector as a sign of confidence and support to the sector