#Africa The Changing Face of Outsourcing

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It’s no secret that companies offshore parts of their operations to save costs. Today, there’s a solution for just about any business need, from accounting to software development to marketing and SEO. Take India for example, whose success as an economy over the last few decades has been in large part due to its ability to be a key offshoring destination.

As the business process outsourcing (BPO) industry has matured over the last 30 years, a shift in the competitive landscape has exposed a colossal new opportunity. The industry’s remarkable success in destinations such as India and the Philippines has begun to undermine their competitiveness. Rapid economic growth has contributed to rising wages in the business centers, which is threatening the ability of these outsource destinations to deliver the same value to clients as was previously possible.

We have now reached a divergence point, exposing inefficiencies that require new solutions. Businesses are now looking for the next great outsourcing frontier.

The Rise of Impact Sourcing

The impact sourcing industry is a glowing example of what technology is making possible. Impact sourcing is a subsector of the BPO industry that focuses on addressing social issues and employing those from disadvantaged backgrounds.

Over the last few years, this nascent sector has shown how technology can benefit both downstream communities and upstream customers. Companies like Impact Enterprises in Zambia are the first of their kind to establish themselves in new developing countries.

A report by Accenture projected that by 2015, the global BPO market will have grown by $45 billion, to $211 billion in total revenue. The impact sourcing subsector will account for 11% of that market – a 29% projected annual growth rate. According to the Everest Group, impact sourcing employs 240,000 workers worldwide. That makes up 12% of the entire BPO market.

Even more interesting, 39% of those workers are in Africa, a continent not known for its tech sector. These impact sourcing service providers (ISSPs) are proving that new locations like Africa are the land of opportunity. They are leveraging high-potential countries that can deliver superior cost-effectiveness and reliability.

New Demands for Dynamic Services

The increasing diversity of companies and institutions looking to outsource their operations is in turn increasing the diversity of services being demanded. From the customers’ perspective, ISSPs are solving a mismatch between the types of client services provided and demanded at the lower end of the outsourcing spectrum.

Companies, particularly small and medium enterprises (SMEs), demand lower-cost back office and data management solutions. Unfortunately, large high-end traditional outsourcers often lack the flexibility to take on minimum contract sizes and low-end crowdsourced freelancers cannot provide a reliable, scalable solution.

ISSPs like Impact Enterprises in particular fill this gap by

  • Taking on small contracts that other BPO providers overlook
  • Working directly with clients to develop personalized solutions that we can scale alongside their growth
  • Ensuring quality beyond that of freelancers through continuous in-house training and management oversight
  • Minimizing costs from emerging market locations

The burgeoning tech start-up industry is becoming a highly lucrative outsourcing target for those who can provide the appropriate services.

For us at Impact Enterprises, our goals and prospects grow brighter every day. In our first year alone, our revenues grew on average 30% month over month. To date, we’ve partnered with over 40 companies and universities across 4 continents, providing average savings of 50% for their front office and back office operations.

As a social enterprise, we are also committed to the professional development of our employees. Through internal workshops, lectures, and assignments, we strengthen their work during employment with the company and function as a springboard for pursuing higher education or better employment opportunities. For 57% of employees, this is their first formal job. 83% now support an average 3.5 people financially.

ISSPs are bridging an industry gap for start-ups, universities, and public institutions. What the impact sourcing sector is doing is opening new possibilities, both for the communities it’s impacting locally as well as the market opportunities it’s creating globally.

Dimitri Zakharov is CEO & Co-Founder of Impact Enterprises, a social outsourcing company that provides lead generation, content moderation, and order management services with the mission of providing digital jobs for skilled youth in Zambia.

The post The Changing Face of Outsourcing appeared first on Disrupt Africa.

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