The debate surrounding outsourcing is age-old, and it is not just in these climes. The subject seems to elicit very strong emotions and many eminent personalities in various fields around the world have vigorously discussed this model – for and against.
Outsourcing is simply the contracting of certain functions or roles in an organisation to an external provider. It enables organisations and public sector institutions to free up resources and focus on their core activities, creating greater value for the organisation.
Outsourcing has helped to significantly improve various emerging economies around the world, and Nigeria cannot afford to be ignorant about this concept. According to a World Bank report in 2012, the global outsourcing industry was worth $500 billion with future projections estimate of $1.65-1.80 trillion by 2020. India is reportedly hauling a whopping 50 percent; and next is China with the remainder split among other countries.
The question must be asked: where is Nigeria on this list? As the most populous black nation in the world, why isn’t Nigeria leveraging her large English-speaking youthful workforce to attract foreign organisations to outsource their functions into our country? For example, several years ago, no one would have imagined that outsourcing would become such a huge success in India. Today, it is a major source of economic growth generating over 20 million jobs in the country in just a few years, and billions of dollars in revenue for the country on a yearly basis. Its population of over 1.2 billion people and around 3.1 million graduates added to the workforce each year makes it a major destination for companies wishing to outsource.
Unfortunately, outsourcing in Nigeria, especially within the banking sector, is being approached by the regulators in the wrong way. For example, the managing director/CEO of the Nigeria Deposit Insurance Corporation (NDIC) recently called for a closer look at the phenomenon of outsourcing in Nigeria, sequel to a statement made by the president of the Chartered Institute of Bankers of Nigeria (CIBN) that 75 percent of fraud committed in the banking sector can be traced to outsourced staff. Other than a casual reference to a supposed report, it is not clear the source of the information proffered by the president of the CIBN.
It is essential that when statements are made by regulators and authorities, there is a complete disclosure of facts to stakeholders, considering that outsourcing provides work for thousands of honest, hardworking, professional and ethical Nigerian employees. Such categorical statements without empirical evidence may be misleading and may lead to unguided regulatory action on the grounds of a “said report” that has not been published for stakeholders to review and discuss. In fact, the CIBN president had stated that the purported report was yet to be submitted to the Central Bank. Why then is the CIBN pre-empting the report and instigating public displeasure for a tested model with so much potential to drive our economic growth in Nigeria?
There is a simple logic that outsourced employees are significantly limited by banking controls, such that most cases of fraud cannot be committed without the connivance of full-time employees. If 75 percent of fraud is committed by outsourced staff, does it imply that doing away with outsourcing will automatically eliminate the 75 percent of fraud? Not likely.
Employees do not commit fraud because they are outsourced. Employees commit fraud because of flawed character, and changing their employment status will not necessarily change this. Having a professional certificate or full-time employment does not a person of integrity make! Alluding that outsourced employees are fraudulent is an insult on the thousands who are upright, have integrity and are contributing their quota to the success of the organisation.
Just like other sectors (and everything else in life as a matter of fact), outsourcing has its benefits as well as its issues. However, the benefits this industry offers far outweigh the problems. If we approach the concept with an open mind and without bias or hidden agenda, we can make the most of it and get the best from it. Asides the plethora of advantages it offers to businesses, imagine the countless number of youths who are and would be gainfully employed through outsourcing. Rather than discredit this concept, the CIBN and other relevant stakeholders should take up the challenge to participate in building a sound and lasting operational framework for the industry to be a huge success in Nigeria.
What Nigeria needs is a deliberate approach on the part of the government to harness the potential of the industry to help improve the economy and create jobs. There should be a roundtable among regulators, practitioners, organisations currently deploying the model and all stakeholders in the industry to discuss the potential, bottlenecks, and policies, guidelines and principles for building a lasting framework for the industry in Nigeria. Below are some guidelines that other countries have successfully used to transform outsourcing into a key growth driver of their economy:
Take a position – Nigeria needs to take a position on the areas of outsourcing to focus on. E.g., India is well known for IT outsourcing and the Philippines has specialised in call centre operation. This will help Nigeria develop and implement a seamless plan towards achieving economic success through outsourcing.
Develop capacity – One of the key drivers of outsourcing is people. Without a capable workforce, we cannot truly harness the potential of the concept. Once we have identified our area of strength and taken a position, Nigeria needs to build a viable workforce equipped to excel in the chosen area.
Build infrastructure – The key drivers of success in outsourcing are technology, power, and other relevant infrastructure. That Nigeria must build infrastructure to enable growth in the outsourcing industry is non-negotiable. We need well-developed, state-of-the-art technology in all major cities and towns to enable us offer the latest and best in technology to organisations wishing to outsource in the country.
Attract investors – The Philippines advertise its call centres every day on CNN. Nigeria must do the same. We must deliberately attract foreign organisations to outsource their functions into the country by creating the awareness that Nigeria has the capacity and capability to perform those functions effectively. In addition to advertising our capabilities, we must also establish laws and policies in favour of organizations wishing to outsource, such as reduced tax rates and other benefits.
When you buy a new car, you do not have the assurance that it will never break down. So you fuel, oil, wash, and service it continuously to keep it in a viable condition at all times. It is puerile to expect it to never break down, especially without the necessary attention and care. When it does break down, do you neglect and abandon it? No. You fix it. As a proverb says, you do not throw the baby out with the bath water.
Outsourcing is a concept which is proven to have worked in several nations and improved countries’ economies tremendously. Rather than discredit this tried and tested model, our focus should be on how we can make it work by discouraging fraudulent activities, building better controls, and creating more outsourcing opportunities.
Nnanna Nwafor
