Doing Business

August 09, 2012

ICT/BPO: These Constraints Plaguing the Sector

The ICT / BPO has quickly become the third pillar of our economy, contributing 6.8% to GDP. The sector employs over 16,000 people and generates sales of over Rs 30 billion. Focus on the area ...

Make Mauritius a cyber island: the goal became a serious ambition in the late 90s, and the cyber city project Ebony reality. The implementation of a second cyber tower confirms the gradual expansion of ICT-BPO sector during the last decade. 

This new industry brings to life the call center, outsourcing services, and other computer activities operating under the concept 24/7. Today, beyond intelligent buildings in Ebony, the sector has also faces constraints to its expansion and affect its competitiveness. 

Mauritius has all the qualities to become a business center BPO: our bilingualism, our strategic location in the Indian Ocean, our favourable time zone, the art telecommunications infrastructure, added to the usual benefits such as low tax rates, political stability and business climate attract investors in several areas related to tics, such as call centers, software development, multimedia and websites, countertops technical assistance, continuity and recovery activities after a disaster, shared services, training services and advice relating to the management of data centers, digital animation, among others. The trend now is towards services with higher value added. 

Constraints 

But all is not as rosy as they say. Globally, Maurice fell from 25th place in 2009 to 36th place in 2011 on the index of AT Kearney Global Services Location, although we remain in 2nd place in the first six data centers as defined by the report of the international consultancy BroadGroup. 

A lack of manpower is felt, especially for night operations, and one solution is to allow students to work part time. This project takes time to implement. To have recourse to foreign professionals, employers must request a "occupancy permit" the Board of Investment (BoI). The eligibility threshold of monthly salary to this permit was reduced from Rs 45,000 to Rs 30,000 for the ICT / BPO to facilitate the recruitment of people from Asia. 

The connection 

Industry players have always complained about the cost of telecommunications. We are connected to submarine cable fiber optic SAFE / SAT 3 and LION and SEACOM and EASSy also. The competition at the supplier level of Internet access down the price but the quantum of the decline so far has not been satisfactory. The hope is to put with the arrival of new operators. 

Legislation 

An appropriate legislative framework is needed for this sector that handles large databases. It is in this light that the Data Protection Act was introduced. However, certain provisions of the Act do not meet European requirements, hence the need for amendments. 

This has already been a victim in this case Valldata Services, BPO company based in Mauritius and which deals with European data. According Valldata, the Data Protection Act, as now, is not fully recognized by the European Union, and the delay in the amendments which penalizes the company loses customers, hence the decision to cease operations. Unfortunately, it cost 200 jobs. However, this argument is not shared by other operators who also work with European customers without any problems. 

Competition 

There are not that Maurice eyeing BPO markets. Of European and American companies have long outsourced their operations to destinations like India, the Philippines and emerging countries of North Africa. The language is no longer a barrier for India, for example, also serves clients French! These countries are currently consolidating their assets to better meet customer expectations. Other countries in Central Africa and East, as well as Madagascar, are now beginning to penetrate this market. 

The economic crisis 

The economic crisis that knows no end, especially in Europe, forcing companies to rethink their outsourcing policy.In some countries, companies are looking for destinations more affordable cost, while in others, government policy requires companies seeking state help to stop any outsourcing project for save domestic jobs. Still others go through reforms to reduce their reliance on outsourcing. 

The OTAM 

Outsourcing & Telecommunications Association of Mauritius (OTAM), was founded in 2004 and includes companies engaged in the Tics: telecom operators, call centers / BPOs, software developers, and teleservices teleactivities; suppliers of computer hardware. The association also includes four partners are: the Chamber of Commerce and Industry of Mauritius, the British Council, the Economic Mission of the Embassy of France, and Afrinic. Its mission is to help create an enabling environment for sector development of technology information and communication technology (ICT) in Mauritius. 

Charles Cartier, TNT Business Solutions: "Innovation is the only way for the future of BPO in Mauritius" 

TNT Business Solutions is the first BPO company incorporated in Mauritius in 1988. This company has constantly renewed its offer for BPO, today, one of the largest operators in the sector, with 600 employees engaged in providing a wide range of outsourced services, such as data management, accounting and finance, computer programming, customer service and media monitoring. Charles Cartier, General Director and also Vice Chairman of the OTAM, responds to The-Economy Challenge. 

> How do you see the BPO sector in Mauritius? 

This sector is, undoubtedly, among the export sectors, the one with the biggest growth potential. Moreover, it is the sector that provides and will offer in the future as many opportunities for youth. We tend to restrict the calls to BPO centers, but it is imperative that young people understand that the BPO is more than that. 

In fact, companies cover a range of activities and crafts BPO cover all professions you in business. In short, everything can be outsourced. The job of accounting staff, that of the HR function (HR), legal advice, customer service, computer programming, the back office of government, the insurance, banks ... The list is endless. It is up to us, Mauritians, creating ideal conditions for this sector to grow. 

> Is there a shortage of skilled labour? 

As I have said, there are a multitude of jobs in our industry and in certain niches, there is a lack of higher skilled labour. I think of all that is software development, project management. There are also specific areas where we had a competitive advantage, but where we must do better to survive. I refer to the command of English and French. 

We can find people who have a base in both languages, but it is very difficult to find people who speak both languages at the professional level. We absolutely must develop training that will enable Mauritians to master both languages at the professional level. The current school curriculum is grossly inadequate for the use of these languages at the professional level. 

> What should be done to improve the business climate so that the BPO industry flourishing? 

The BPO is an industry where companies are constantly doing an arbitrage costs. The BPO is because of European and American companies wanted to operate at lower costs thereby transferring their 'process' outside their borders. 

If these companies have decided to use their own employees at the door to save money, I do not see why they continue to operate in Mauritius where cheaper elsewhere. Today, all companies must export a premium price because of changes in the exchange rate of the rupee. 

This is not a problem specific to the euro. When we must renew the contracts signed in 2007, we have to charge more in foreign currencies (10% for the dollar, 28% for the pound sterling and 13% for the euro). Under these conditions, some customers go to other destinations where monetary policy is more conducive to export. So to answer your question, I believe that priority should be to rectify the situation to maintain the competitiveness of exports. 

> The sector have a bright future in Mauritius despite foreign competition? 
Our future is in our hands. The sector has a bright future if we can remain competitive. There are four essential vectors in this competitiveness: the first is the issue of monetary policy that I developed earlier. This is an important issue. The second is training. Our competitors are developing very quickly and we must always try to be the best. The third is the cost of inputs, I am thinking here of telecommunications costs and redundancy of the international connection. The last is innovation. Innovate is the only way to have a future in the BPO. 

Seetohul Roshan, Chairman of the OTAM: "We must fight to remain competitive" 

> What are the obstacles that hinder the development of the BPO sector in Mauritius? 

The situation in 2012 for the ICT / BPO in Mauritius is different from that of 2008 (first crisis EURO). During the 2008 crisis, the sector had experienced growth exceeding 13%, while in 2011 the growth was only 9.8%, therefore, already, we have signs of slowing. We believe that the outsourcing industry globally rationalized and some emerging countries over others. 

So, Mauritius is not immune and the competition is fierce. Due to poor visibility, some companies find themselves in difficult circumstances, but we are still a destination and reference reliable. We must fight to stay competitive. Bandwidth rates will fall further, our skilled workforce must be competitive and reasonable infrastructure costs. We need to work on areas for improvement, review our 'business models' (operating costs, transportation, etc..) And increase training by making people employable as soon as possible. 

> Lack of skilled labour is it still smell? 

It is always important, but by dint of saying and repeating, we first find our own solutions to solve this problem. Many companies have started their own training centers and this is seen as a good initiative. Still it works with certain institutions, such as HRDC and others to find ways to solve this problem. 

> Is there a problem with the Data Protection Act in relation to the sector? 

Some clients require proper conformation with the European standard, so obviously if you have not, it can embarrass you. This was the case for a company that has squarely decided to relocate its operations recently, to other countries that provide the protocol on the transfer of databases and other information. It made us realize that there is a 'draft' of this report is ready and there will be a consultation on this matter shortly. 

> The sector have a bright future for Mauritius, despite the competition, especially the countries of North Africa? 

Certainly, we remain confident about the sector and it is important not to give up. Competition and competitiveness we will advance with greater ardor and it will inspire us to offer a quality service. 

Markets are within our grasp and we seize them. The challenge is there. Development has slowed somewhat true, but things are done step by step and some large and medium companies maintain a positive growth. The competition is not only North Africa but also countries of Eastern Europe. The Philippines and other countries are also part. So we must fight on all fronts ... Let's not forget Madagascar, which is next to us. 

 

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