August 12, 2013

Outsourcing: Govt, private sector partnership & unemployment

Outsourcing: Govt, private sector partnership & unemployment

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By Princewill Ekwujuru

With Gross Domestic Product,(GDP) estimated at $262billion in 2012, Nigeria is the largest economy in Sub-Saharan Africa. Yet, economists say it is far from its potential even with its huge population estimated at 162.5 million people. Economist had further said that barriers to the optimal growth and development of the economy is its huge infrastructure deficiency which makes it a harsh operating environment for businesses.

The harsh operating environment which is with consequencies on businesses, especially small and medium scale enterprise, explains the slow pace of its development and its high unemployment rate especially among young graduates who are supposed to make positive contributions to the economy. This, however , has caused stakeholders to continually ponder on ways of employment generation from time to time.

One of the areas that have somewhat been overlooked in this regard is the outsourcing profession and proponents had insisted that Nigeria should actually become the hub of outsourcing in Africa. To achieve the benefits that abound in the sector, there is need for a partnership between government, private sector and the outsourcing sector. China and India are examples of economies that have taken outsourcing seriously and are reaping the benefits.

Still in its infancy though, the outsourcing sector in Nigeria is showing promises. This was affirmed by the quality of spokespersons and attendees from multinational corporations that attended the 2013 Outsourcing Expo jointly organised by the Resource Intermediaries Limited (RIL) and the Association of Outsourcing Practitioners of Nigeria (AOPN) in Lagos.

The expo turned out to be a harvest ground for ideas on how to grow the industry. Speakers at the event Seni Adetu, Managing Director, Chief Executive Officer, Guinness Nigeria, and Soji Oyawoye, Managing Director, Resource Intermediaries Limited, among others discussed a wide range of issues that will engender growth of a globally competitive outsourcing sector in Nigeria. This was in line with the objective of the expo to make the outsourcing sector in the country achieve its potential and perhaps by extension contribute to the efforts to reduce the high rate of unemployment in the country by a significant level.

However, for the sector to grow, develop and contribute to the GDP of the country like its counterparts in China and India, there is need for a strong collaborative effort between government and the industry leaders in the private sector.   The role of government in this initiative, some participants contended, is to provide an enabling environment with necessary incentives that will motivate both local and foreign entrepreneurs to invest in the sector.

At the expo, Oyawoye, who is one of the conveners, disclosed that professional outsourcing is new in Nigeria. According to him, companies have been contracting and calling it outsourcing for over 30 years. He expressed concern over what he called ‘contracting’ in the name of outsourcing and urged those who are misconstruing the two to have a rethink as the two are mutually exclusive. He described it as bad signal for the young industry, while adding that in developed countries, the outsourcing profession drives the economy.

In his keynote address titled ‘Outsourcing and the need for the Outsourcing Professional’, Seni Adetu, Managing Director/CEO, Guinness Nigeria, identified the benefits of outsourcing to business, urging outsourcing service providers to be professional and develop proper business strategy because the industry needs a systemic approach. He however noted that the increasingly competitive nature of the business environment has made outsourcing an imperative for companies like Guinness Nigeria, while also stressing that outsourcing has come to stay because of the need to keep pricing down.

Adetu differentiated outsourcing from contracting, saying that the core reason for outsourcing is to build ‘organisational efficiencies and to grow shareholders value’. Drawing a line between the two business concepts – contracting and outsourcing – he explained that “Outsourcing principally means ceding a business process to somebody or an organization outside your business. In contracting you are involved; you are the one telling the provider what you want. When you outsource, what you measure is result not the process,” Adetu explained.

He noted that “Outsourcing users will want to choose well-funded large scale outsourcing vendors with good track records for service and support. Some of the outsourcing practitioners have no scale, skill or idea of the service they propose to offer”, and added that for the industry to grow, the practitioners must be professional.

Using Guinness Nigeria Plc as a case study, Adetu explained some of the reasons why a company should outsource as “when a company is unable to manage certain areas of its day-to-day business and process satisfactorily. When comparative costs are lower on the short or long term and when it is a distraction to the core business”, he stated.

Meanwhile, speaking with our correspondent at the venue of the Expo, Adebayo Oyefolu, an outsourcing practitioner welcomed the idea of an annual outsourcing expo. He stressed that besides the fact that the forum sensitizes users of outsourcing to the existence of the sector at a professional level, it is a discussion platform for germane issues affecting the sector such as how to grow the practice in the country.

On his part, Isaac Otokitin believed that outsourcing practice in the country is an industry waiting to expand. In his words, “The opportunities available in the outsourcing practice are immense. It is an industry that can greatly contribute to improving the economy of the country via industry growth and employment generation. You will agree with me that employment generation is one of the challenges facing the country and the outsourcing profession is a fertile sector that can absorb so much with the support of government and big multinationals operating in the country,” Otokitin said.

Quality responsible for Bane’s Whisky recognition—Watts

Mr. Andy Watts, Master Distiller of  Bane’s Whisky,  Africa’s first single grain whisky  has said that part of its success secrets that won the brand a recent global recognition is commitment to quality production and  blend of local raw materials.

Watts, whose brand recently occupied the global center-stage as the world’s best grain Whisky during the World Whisky Awards ceremony held in London recently, disclosed in a statement that the maturation process adopted by his distillery in brewing its whisky was a unique process.

He said the whisky is made to undergo a double maturation process, whereby the spirit is placed in oak barrels and matured for a minimum of three years, after which the drink is revatted for additional two years before it is bottled for consumption.

According to him, whiskies do not age while they are in the bottle. Rather, maturation is achieved years before bottling, stressing that  “absolute skill and passion goes into each bottle of Bain’s Cape Mountain Whisky, utilizing only the finest grain and double maturation process to produce a lightly flavoured, refined spirit that can be discovered in each and every sip”