allAfrica.com: Mauritius: An Outsourcing Vision for Mauritius (Page 1 of 1)

Let me from the outset state that the vision I will sketch out is not that of Enterprise Mauritius, but my own.* A clear, specific and pragmatic "outsourcing vision" is urgently required for Mauritius founded on:

1. Focusing on market niches where operating margins are generous enough, where it has comparative advantages;

2. Engaging such market niches on the basis of domains of the outsourcing market in which Mauritius has already a fair supply of foundation skills, which can be upgraded to the required operational level within relatively short term.

Mauritius welcomed its first outsourcing operator, a call centre in 1995. 12 years later, there are 185 such companies providing 6,960 jobs. 45% of these operators are Business processing outsourcing (BPO) vendors with 2,400 jobs. More investment is coming following active promotion by the Board of Investment. By early 2008, it is expected that the industry would have created about 10,000 jobs. One could look with pride at this phenomenal growth or at the one-line note in AT Kearney Global Services Location Index 2007 about how the rise of Mauritius reflects growing interest in locations with the ability to serve francophone markets.

However, one who understands the world market of outsourcing business will surely realise that Mauritius has been slow and has lacked both ambition and strategic direction in developing capacity to capture an adequate share of this business.

I am not aware of any official document, which spells out the outsourcing vision for Mauritius. The Mauritius National Information Technology Strategy Plan (NITSP) 1998 had as primary objective to recommend a coherent organisation incentive framework and an actionable planned approach for supporting the IT Industry development and the IT human resource development plans, not an outsourcing strategy.

A new strategy plan is under preparation. I am not aware whether this forthcoming one will have any outsourcing vision for the country. Outsourcing or BPO is generically referred to as ITES, Information Technology Enabled Service. This means that IT is only an enabler not the full scope of the service.

Outsourcing is nothing more than an externalization of production activities, in the production of both goods or services. What we are now describing through outsourcing is a revolution in national and international trade frequently called "tradability revolution", which means making trade with more and more specialized and customized activities or services, which, only 20 years ago, were considered as non tradable. Under the impact of new ICT technologies, externalization has boomed in a few decades, comprising former non-tradable services and newly fast emerging ones ready for externalisation.

If it is evident that a location needs to be ICT-enabled to be a vendor of BPO business, the intensity of IT in BPO activities depends on the domain of service to be provided and in certain cases it can be as low as 10% in terms of human resource requirement! Sure it is 100% if one is in the domain of software development! Any country, which focuses only on training IT professionals but none in other domains, either has a vision to become an IT-intensive outsourcing location and has comparative advantage for so doing, or has no clear vision of the BPO industry.

This appears to be the case of Mauritius. It is planned to train 20,000 IT professionals in the years to come, but it is not known that there is any other training in any other areas of competencies required in other domains of services either by the public or private sector, although there are areas where Mauritius has a relatively good foundation of skills.

Mauritius rates very well in most of the factors that constitutes International Competitiveness in BPO: it has cultural flexibility, including social and labour practices, political and economic stability, good enough telecommunications infrastructure although we could, with the required ambition and given its small size and geography, connect the whole island of Mauritius (like Singapore) with optic fibre and provide total wireless mobility and high-speed broadband connections at even more competitive costs. Time zone is favourable and the basic requirement for work permits for expatriate workers is not an issue. On the contrary, we have provided incentives to attract skilled expatriate workers. The recent good rating of Mauritius "business environment" speaks for itself. The "people skills and availability" category has four sub-groups: overall experience and skills in ICT; availability of labour and the size of a country's workforce; educational levels of the workforce, including language skills and test scores; and the attrition rate in the country's BPO industry. It is, however, in the skills and demographics factor that Mauritius rates less favourably. The demographics issue is no big deal as there is already the policy and conducive regulatory framework for importing skills. An alternative to India, which is absorbing more than it can produce and where the costs of such skills is escalating, can be the neighbouring African countries where there is an abundance of foundation skills at low costs.

Shouldn't Mauritius focus on market niches where operating margins are generous enough, where it has comparative advantages and where it is possible to provide training in consequence for quick readiness to operate? Shouldn't the most effective strategy be to understand the domains of the outsourcing markets in which Mauritius has already a fair supply of foundation skills, which can be upgraded to the required operational level.

Take, for example, domains relating to translation and editing where language is the core skill. A certificate in translation or editing skills would make the Mauritian claim to bilingualism ready to provide higher value service in outsourcing within

12 months. Healthcare-related services such as medical transcription and document management; Insurance sector services such as policy maintenance, claims processing, data mining, data management and analysis, medical summaries, or even engineering and architectural services are among those Mauritius could seriously look into to define its vision and strategy.

The recent expression of resistance or scepticism of the legal profession about legal services outsourcing is a vivid illustration of the total lack of understanding of processes within all spheres of services or production being reorganised at the global level and what opportunities are opening up. Our 400 or so local legal practitioners do not realise that, in the past four years, more than three million US legal jobs have been outsourced to foreign countries, according to the US government. It is estimated that in the next ten years more than 13 million US legal jobs will be moved offshore to be performed by foreign workers.

Mauritius does not yet feature in the top 25 locations in terms of attractiveness; yet, it can within the next three years get a fair share of the outsourcing cake in market niches if the vision is clarified sooner than later.

*This paper was presented at the 2nd African Outsourcing & Contact Centre Conference organised by UTM - AITEC

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