Paul Kukubo

ICT Board Pasha Project is very much on track

In: My personal views|The Industry in Kenya

1 Feb 2010

The digital villages project (Pasha) is still on track.

The Board sends out regular communication to those who underwent the first lot of entrepreneurship training in October 2009, as well as other trainees applicants due to be trained in the next phases over the next two years.. The portal www.pasha.co.ke is also active and is updated to keep all informed on the progress. This portal is being enhanced continuously.

A 2nd lot of 1500 people from all over the country are due to be trained in this first quarter of this year. The eventual target for training is 7500 in the next 2 years.

The board has now finalized the Grants Manual, a document that provides the basis of how the funding for this grant to entrepreneurs will be administered. Each entrepreneur will have an opportunity to competitively apply for a grant to fund his start-up costs (or expansion costs for those who have some level of establishment). The board will also provide a technical support arrangement for the centers across the country for a fixed period.

These Pasha centers will be self sustaining and entrepreneurs themselves will determine what specific services they provide based on their local circumstances. They will also act as one of the main gateways for government online services.

There are 5 Pasha Pilot centres. in Kangundo, Gairrisa, Malindi, Mukuru (industrial Area), Meru, We continue learning about specific issues on the ground from these sites. Issues such as business model, infrastructure requirement, public uptake and demand for services. One key learning so far is that this project is in great demand for varying reasons across the country and that even if there is no ‘one size fits all’, citizens will adopt the centers to suit their needs.

For details about the actual Pasha process visit this link on ours site http://www.ict.go.ke/index.php?option=com_content&task=view&id=68&Itemid=133

We welcome further questions and comments and encourage you to help us maintain public interest in this important project, which even we at the board are the first to admit, has taken longer than originally envisioned. Indeed projects such as this do take a long time and stakeholder anxiety is to be expected.

We shall keep you informed more regularly.

(14) Comments

Busy week….

In: My personal views

13 Jul 2009

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working the MIT chaps at Strathmore to prepare my presenttion

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Developing local ICT businesses.. An initial to do list

In: My personal views|The Industry in Kenya

6 Jul 2009

Reading todays editorial in the business daily,

http://www.businessdailyafrica.com/Opinion%20%20Analysis/-/539548/619464/-/u1li80z/-/index.html

It basically makes the point that aside from focussing on getting international investors, we must focus on developing local ICT entrepreuners as part of the wider agenda for ICT sector growth. I could not agree more. These are some of the thoughts I am laying kdown as part of what I will be taking forward for stakeholder discussion on this issue. The eventual aim is to agree a framework for the development of the local ICT economy.
ol
liDevelopment of Incubation centres. I will propose we adopt the model of the digital hub in Ireland. We need to find low cost high traffic physical space (im thinking the Railway Godowns, or somewhere in the city centre) and kit up the place with high bandwidth and desks and invite entrepreuners to set up there on a time limited basis./li
liBranding the sector. The Board has launched the www.doitinkenya.com portal which will eventually showcase all things ICT in Kenya. This is aimed at creating an ICT brand for Kenya. This portal enables interested investors to review a companys profile prior to contacting them. doitinkenya will also be the brand line for a cmapign to create awareness locally about ICT in everyday life/li
liThere have been many suggestions to us from the industry to assist with lobbying for a change in public procurement in ICT to support value added partnerships between local and international firms. Currently, the way it works is that local firms need not be ICT technical firms. The practice currently means that many of the local firms that partner with international firms to provide high value solutions, do so without a clear capacity and technology transfer agenda. So the country develops solutions without getting the knowledge. This problem is not limited to the public sector./li
liWe have incorporated BPO and entrepreunership into the Pasha Centre curriculum. More BPO and ICT entrepreunership training needs to find its way into the curriculum of all public and private education institutions. Skills development is the cornerstone of upgrading the ICT businesses/li
liTraining and skills upgrading of current managers of ICT businesses as well as encouraging entrepreunership among more experienced corprate sector managers. Skills in contracting, financial management, project management, brand management, negotiations etc are critical in getting ICT entrepreuners to step up. This is the only way that many of the companies can develope the scale./li
liGreater government automation will always be a double treat for the sector. Greater automation, means greater efficiency and service delivery for citizens whilst at the same time more ICT work for the local ICT economy./li
liSupport for local initiatives. The ICT board has not always had the funding it requires here to support all the various industry organizations that are developing in the sector. Open Source Society, Linux users association, the Kenya ICT Federation, the Computer Society, The BPO Society etc. The Association of domain registraters, Kictanet, the CIO forum, etc. These organizations fulfil a useful role as stimulants of ICT activity. My initial impression is that te associations require greater support at this early stage of our ICT development./li
liSeed grants, venture capital, angel investors, private equity. All very important in providing businesses with much needed capital. ICT sector investments, especially in service businesses, are normally dependant on much intellectual capital formation with very little going towards capital items. Because of this, IT firms find great difficulty securing capital from banks./li
liMany industry players have spoken to us about the need for a shift in the taxation approach for ICT firms. Specifically on payroll taxes and VAT. These taxes require to be paid very month on invoice, even when there is no cashflow to support the outflows of cash. The nature of amany IT services contracts is such that most companies will pay project fees on completion and delivery of the project. Some innovative ideas are required in tax adminstration to stimulate small firms./li
liIntellectual property (IP) protection is another factor. The ICT board has been asked to step up market awareness of intellectual property. Incidences of disregard or abuse of IP have been noted. The bigger issue her is that many of the individuals who develop IP are not in a position to actually negotiate its protection especially in contracts with large firms. So they get into a contract in a weak position because they need the money from the project for basic survival. because of this, we have seen little growth in IP based entrepreuners in Kenya. IP based entrepreuners are improtant in developing a countrys overall global competitiveness. This is an issue that will be on the agenda/li
/ol
There will be other thoughts and stakeholders will be invited to conclude a specific implementation plan. On the matters which require policy revision, the Board will escalate this to the Ministry for consideration and input. On matters in which it is within our mandate to solve, we shall apply ourselves accordingly.

(6) Comments

Outsourcing insights from Mckinsey Conference in Prague

In: My personal views|The Industry in Kenya

1 May 2009

Sometimes when I attend these Outsourcing and investment events, the questions that are asked are, ‘Kenya in technology?’ ‘Really?’ ‘That’s interesting’. For many, the notion that a country in Africa can offer technology enabled services to the developed world runs counter to their established view.

In Prague I Visited St Vitus's Cathedral and saw where 'good King' Wenceslas is buried The job of marketing Kenya as an outsourcing destination is one of creating confidence about the country itself and its ability to actually do business. Usually after a one-on-one discussion with many potential investors, they are convinced. Then comes the hard bit, the early adopters going back to their organizations and convincing them about doing business with us. The government makes it case by articulating the macro factors:

pk-at-the-breakfast-session

Developments in the undersea and terrestrial cable.
The incentives regime.
The completion of a very robust Kenya Value proposition (developed with the help of Mckinsey and funded by the Rockerfeller Foundation).
The proposals to develop the Special Economics Zones (approved by the Kenya Cabinet recently).
The number of small and emerging BPO operators in Kenya doing sterling work against many odds.
The hub position Kenya has gained with the location here of many multinational ICT players (ala Microsoft, Cisco, EMC, Siemens, Nokia, Acer, Ericsson, Oracle, Google, Sun, Huawei, ZTE, Sagem, HP, IBM, Lenovo) etc
The establishment and operationalization of the Kenya ICT Board, and the commencement of the 112 M USD Kenya Transparency and Communication Infrastructure Project (KTCIP), a project intended to stimulate connectivity to broadband networks and improve government transparency through digitization of selected government registries and functions.
The number and quality of graduates we turn out every year.
And Kenya as a very livable place.
Got a chance to take a stroll around Prague City, very beautiful

What is now of interest to most potential investors is also the level of private sector competitiveness in Kenya. How are companies doing here?

The answer is that Kenya is a great place to do business, with good margins for businesses that are well invested and well run. Safaricom, East African Breweries and etc point to a market where large investors can expect good overall dollar profitability.

The main McKinsey workshop session

The Agro based sector of Coffee, Flowers and Tea is largely export oriented commoditized and with very little local value addition. There has been talk for many years about value addition but this transition has not yet been made. however the economic impact on the country has been positive.

The small and medium business sector is mainly comprised of family businesses. Many are not mainstreamed into the global financial system for credit and business

So those are the typical issues one has to cover in pitching Kenya.

Over dinner, Thursday night , I sat on a table together with some members of Mckinsey’s senior global team, who happen to understand Kenya very well. One must remember that Mckinsey helped develop Kenya’s Vision 2030.

Dr Tarek El-Sadany senior advisor to Minister for Technology Policies Egypt, Paul Kukubo and Noshin Kaka (Mckinsey's global head of Outsourcing practice)

The dinner conversation shed some light on the current economic crisis. I was concerned about whether the current economic crisis posed a challenge to our strategy to pitch and develop Kenya as an outsourcing destination.

The current global economic crisis is more serious than many people realized. Not many governments understand how to actually get out of it.
Some large outsourcers argue that the demand for greater cost competitiveness bodes well for outsourcing firms.
There is a sentiment that companies in the west that receive state bailout support (that is obviosuly taxpayer sourced) cannot send jobs abroad under any circumstance.
There is also a sentiment that outsourcing deals will get greater scrutiny, more negotiation and greater demand for value for money.
Some firms feel that greater emphasis will be placed on outsourcing than on offshoring to captive centers (centres that are owned and operataed by the firm itself).
Governments must develop a strong outsourcing agenda to stimulate ICT businesses. (the need to win some home matches before you can play away games!). Government stimulated outsourcing also provides the opportunity to meet governments service delivery objectives.
The outsourcing industry is a supply constrained industry, meaning the total addressable market (the total potential for outsourcing) is much greater than there is capacity to meet it at this point in time. There is a global shortage of the requisite skills to meet it.
The greatest driver of outsourcing success for individual countries will be how competitive the players are. How efficiently and productively the centres are managed. It goes well beyond bandwidth and labour costs. (In India for example there ares some instances where there is a 70% difference in productivity between two call centers in the same town serving the same client on the same job!).

These themes continued into the very next day at the actual conference

My conclusion, we shall continue to support efforts to improve basic business competitiveness as a way of stimulating the sector. For example, internal training programs and sustained talent management programs can be more most effective for developing local outsourcing competitiveness. Efforts in business process improvement can impact success very significantly. The Kenya ICT Board will continue to support the sector through programmes such as the Service Level Agreements contracting course which we facilitated early this year. Other programs on the cards are the COPC courses.

Companies want to outsource to companies that understand how to be competitive.. After all, that is what they are looking for themselves. The job of the Kenya ICT Board is therefore one of Marketing in its broadest and fullest sense and this includes market development.

At the end of the Conference, I was able to create greater awareness of Kenya as an outsourcing destination among blue chip global outsourcing decision makers. And this needed to be done in an environment which they trust, a Mckinsey facilitated conference. Thank you to Mckinsey for the opportunity.