The European market for IT-enabled services and business process outsourcing in Senegal and Uganda

The main goal of this tailored intelligence study is to identify opportunities for Senegalese and Ugandan service providers to enter the European market for information technology enabled services (ITES) and business process outsourcing services (BPO). The study also discusses the main challenges and obstacles, providing tips on how to seize the opportunities identified and tackle obstacles.

1. Report structure and important research questions

This study has been broken down into three parts covering three key research questions. Part 1 looks at which ITES and BPO activities offer the best opportunities in the European market based on demand. Part 2 looks at what opportunities and obstacles exist in the European market for specific IT-enabled services in Senegal and Uganda. Part 3 looks at how Senegalese and Ugandan ITES and BPO service providers can tackle obstacles and seize opportunities in the European market.

To identify which ITES and BPO activities offer opportunities, Part 1 answers questions about which vertical niches, horizontal markets and European countries offer the best opportunities in general, but also specifically for Senegalese and Ugandan services providers. Part 1 also looks at the European market’s openness to outsourcing ITES and BPO activities to Senegal and Uganda and what the obstacles and challenges are for Senegalese and Ugandan service providers to enter European markets.

Part 2 zooms in on the opportunities and obstacles in the European market for Senegalese and Ugandan service providers for specific ITES and BPO activities, including inbound marketing services, contact and call centre services and human resources services.

The final part of this report looks into the situation in the European ITES and BPO market and answers questions about which channels are recommended, how potential customers can be found, what export promotion activities are recommended, and finally how business could best be done. The answers to these questions are translated into practical tips for Senegalese and Ugandan service providers to tackle obstacles and seize opportunities in the European market.

2. Product definitions

Business process outsourcing (BPO)

BPO is defined by Quint Wellington Redwood as the delegation of a business process to a third party that owns and manages the business process according to a defined set of metrics. These outsourced processes tend to be non-core activities, enabling companies to focus on their core business instead, while reducing costs and increasing their competitive advantage.

Information technology enabled services (ITES)

According to Smartsheet, ITES is a form of BPO that delivers IT services through leveraging information technology (IT) over the internet or another data network. According to experts, ITES is often referred to as BPO activities that require a high level of software or IT to be performed. Examples of ITES include digital animation services, creation of graphics and search engine optimisation.

Information technology outsourcing (ITO)

ITO is defined by Gartner as the use of external service providers to effectively deliver IT-enabled business processes, application services and infrastructure solutions for business outcomes. Examples of ITO include IT services, application development, software products and embedded software. Although ITO is not part of this tailored study, it is important to know the definition to make the distinction between BPO, ITO and ITES activities.

Nearshore and offshore outsourcing

Nearshoring means outsourcing to countries that are geographically close. Nearshore countries are often defined as countries within four hours flying. Offshore outsourcing or offshoring, in the European case, means outsourcing to countries outside of Europe, typically overseas, such as Senegal and Uganda.

3. Methodology used

This market intelligence product is the result of desk research and primary research, including 13 in-depth interviews. The key interviewees who participated in the research include chief executive officers from associations in key European markets, outsourcing experts and companies that outsource ITES services.

Note that the research for this study took place in the fall of 2019, before the outbreak of the COVID-19 virus in Europe. This means that the impact of the corona-crisis on the European market and global supply chains has not been taken into account in this market report and forecast.

4. Summary

Which vertical niches (types of industry) offer opportunities?

The European financial services sector is the sector where most outsourcing takes place. This is followed by the manufacturing, energy and travel, transport and leisure sectors. The greatest growth in outsourcing from Europe can be found in business services, financial services, healthcare and pharma and retail. Nevertheless, no single vertical industry is more relevant than another for Senegalese and Ugandan service providers. What is more important is that you specialise in a niche. This will increase your chances of finding partners and in being successful in the European market.

Which horizontal markets (types of services) offer opportunities?

It is the bulk of standardised activities that are outsourced offshore by European companies. The bulk of activities can be found in digitisation services, back-office services (such as elements of human resources services), and contact and call centres. We recommended that Senegalese and Ugandan service providers specialise in activities that are low value but difficult to automate and thereafter develop more value-added activities, which face less competition and are even harder to automate compared to standardised activities. This will ensure that business is sustainable in the long run.

Which European countries offer opportunities?

Market size, openness to outsourcing, skill shortages, diaspora, wages, language and historical ties determine which European markets are most interesting. Additional factors determining an enterprise’s outsourcing destination include quality, trust, laws and regulations, risk vs gains, proximity, reliability, business continuity, social and political issues, and ease of doing business.

The most interesting markets for providers from Senegal are France, Switzerland, Belgium, Albania, Bulgaria, North Macedonia, Moldova, Romania and Germany. The most interesting markets for providers from Uganda include the United Kingdom, Denmark, the Netherlands, Norway, Sweden and Germany.

For which ITES and BPO activities is there an openness to outsourcing to Senegal and Uganda?

There are no activities that offer absolutely no opportunities for Senegalese and Ugandan service providers. A logical exception to this rule are the activities that simply cannot be delivered remotely.

What are the obstacles for Senegalese and Ugandan service providers to enter the European market?

Current obstacles for Ugandan and Senegalese service providers to enter the European market include limitations in local infrastructure, education, ease of doing business and country branding. Virtually nobody in Europe really knows about Ugandan and Senegalese service providers. Additional challenges include competition in European markets from competing countries and companies, but also from alternatives to outsourcing, including digital transformations and security, and rivalry in the market.

What opportunities and obstacles are there in the European Market for specific IT-enabled services from Senegal and Uganda?

Inbound marketing services

Demand for inbound marketing services in Europe is on the rise and the best opportunities can be found among medium-sized companies in the tourism, fashion and apparel, and food industries. Inbound marketing is becoming increasingly important in these sectors, medium-sized companies being the last ones to adopt it. Inbound marketing services can be standardised or value-added activities.

When offering standardised activities, then France and Germany are interesting to look at for Senegalese service providers, while Denmark, the Netherlands, Sweden, Norway, the United Kingdom and Germany are all interesting for Ugandan service providers. When offering value-added activities, we recommend Senegalese service providers to focus on France, Switzerland and Belgium. As for Ugandan service providers, we recommend focusing on the United Kingdom.

Trends in the European inbound marketing services market, creating opportunities include increased demand for value- added services, storytelling, use of visual content, social media dashboards, big-data analysis, design trends and open-source products. Competition in the European inbound marketing services market mostly comes from local players based in target markets.

The best way to enter the market is by reaching out to local competitors and service providers, best approached through a sales agent or intermediary. Good opportunities can be found among international players in your local market. This must not be forgotten. Bundling the strengths of multiple companies in your country and working together through a business support organisation or trade association will be helpful to build reputation.

Contact and call centres

Business in all of Europe simply cannot survive without a good customer service that includes a customer call centre. Hence, demand for contact and call centre services is everywhere, among European companies of all sizes. The French market is the most obvious European market for Senegalese service providers to focus on, but Eastern European companies also offer opportunities for subcontracting. The United Kingdom is the most obvious market for Ugandan service providers to focus on, but this market is extremely saturated.

Trends in the European contact centre services market that offer opportunities include the switch from multichannel to omnichannel services, the switch from cost centres to opportunity centres, the integration of artificial intelligence (AI) into customer service, in addition to cloud services, self-service and social media support.

Competitors for Senegalese service providers targeting French-speaking markets come from other French-speaking countries, including Tunisia, Morocco, Mauritius and Madagascar. Eastern European countries that are members of the International Organisation of La Francophonie can also be considered competitors but are also potential customers. For Ugandan service providers, targeting competitors for the United Kingdom market includes all English-speaking nations.

The best way to enter the market is by using local sales agents and European competitors rather than approaching end-user companies directly.

Human resources services

The most promising segments for offshore service providers from Uganda and Senegal are the services which are less complex, more standardised and require relatively limited language skills, including workforce administration, performance management services and payroll services.

The greatest opportunities for Senegalese service providers offering human resources services will be found in France, but they can also consider the United Kingdom, Ireland, the Netherlands, Denmark, Sweden, Finland and Norway, if they have staff who speak English sufficiently well. The greatest opportunities for Ugandan service providers are in the United Kingdom, Ireland, the Netherlands, Denmark, Sweden, Finland and Norway.

Trends in the European human resources service market that offer opportunities include cloud computing, robotic process automation and selective sourcing. Competition in the human resources outsourcing markets for Senegalese and Ugandan service providers comes from both nearshore and other offshore countries. The best way to enter the European markets is by using local sales agents or intermediaries rather than approaching end-user companies directly.

Which channels are recommended when entering the European market?

Subcontracting and the use of intermediaries are the most realistic market entry channels for service providers from Senegal and Uganda. This applies to any target country in Europe.

How to find potential customers?

The best ways to find potential buyers are through sales agents, industry associations, social media and directories.

What export promotion activities are recommended?

European businesses are savvy internet users. Websites and online social media presence are a good place to start promoting yourself. Tradeshows provide good opportunities to build a valuable professional network of contacts. Brochures in print and in digital format can provide essential information about your business to your customers.

How should business be done in European markets

When doing business in European markets building trust is essential, as is the awareness of cultural differences. Finally, proper contracting relationships are important an outsourcing relationships.

5. Part I: ITES and BPO opportunities in the European market 


This chapter indicates which ITES and BPO activities offer the best opportunities in the European market, which ITES and BPO activities enjoy openness from European buyers to outsourcing to Senegal and Uganda, and what the obstacles and challenges for Senegalese and Ugandan service providers to enter the European market are.

Which ITES and BPO activities offer the best opportunities in the European market based on demand?

The first step in identifying which markets and activities offer opportunities is by looking at which markets are interesting in terms of demand for a service. Unfortunately, it remains a challenge to quantify the exact size of the global outsourcing market. Not only do companies have little incentive to disclose information regarding their outsourcing behaviour but there is also no consensus internationally as to how this data can best be collected.

Despite the different methodologies used by different sources and the widely varying estimates of research available, the ISG Index can be used as an indication of what the global market looks like. According to their findings, the global market size for BPO totalled €4.8 billion in 2018. Europe accounted for €1.4 billion of this total, even though it has seen a decrease in annual contract values (ACV) by an average annual of -4.7% between 2014 and 2018. Still, Europe accounts for 29.8% of the global BPO contract values, so it remains a high-priority target region.

The ISG Index only registers contracts with a size of €3.6 million and higher. Hence, the market is expected to be at least three times bigger than what the ISG Index registers. Nevertheless, market behaviour, as identified by the ISG Index, is considered to be representative of the overall industry’s behaviour. Since they are too large, these contract sizes are not representative of the immediate opportunities for small and medium-sized Senegalese and Ugandan service providers, but smaller contract sizes are expected to follow the same growth trends.

These annual contract values indicate the values of contracts signed and outsourced by Europe-based companies. They do not give any indication about where the works took place and what portion took place onshore, nearshore or offshore.

Experts indicate that the reduction in BPO contracts in Europe applies to the European BPO sector in general but that the portion of offshore BPO is stable. This means that the declines in BPO are less applicable to offshore service providers from developing countries. Figure 1 also shows that BPO particularly decreased after 2016. It is expected that this decline is a result of economic and political events taking place across the European Region, especially Britain’s withdrawal from the European Union (Brexit).

According to the ISG Index, Brexit caused the market to decline in the United Kingdom. In France, the decline was caused by unsettling economic and political factors, while in Germany, the decline was caused by fears of a recession and the economic worries over Brexit, which slowed decision-making. In all cases, companies became more cautious in their outsourcing decisions. The market is expected to eventually stabilise, moving forward thanks to digital developments.

Seeing as the United Kingdom, Germany and France are the largest outsourcing markets in Europe, their economic and political situations impacted the overall BPO outsourcing picture for all of Europe. Despite these macro-economic challenges, it is expected that digital developments will continue to push the market forward and that the European BPO market will grow by 4.5% annually in the next three years. This indicates that prospects for BPO in Europe remain promising. You can read more about opportunities in the largest markets further on in this report.

What vertical markets offer most opportunities in Europe?

Figure 2 shows that the industries in Europe that saw most ACVs in both BPO and ITO: financial services, manufacturing and energy. Although figure 2 shows ACVs for traditional sourcing in general (ITO and BPO), BPO made up for approximately 23% of the total ACVs in traditional sourcing and ITO accounted for the rest. As was the case in figure 1, these figures represent contracts with a size of €3.6 million and higher. Hence, the market is expected to be several times higher than registered by the ISG Index. Figure 2 still gives a strong indication of where BPO outsourcing demand comes from.

The financial services sector is the sector where most outsourcing takes place., followed by manufacturing, energy and travel, transport and leisure. The greatest growth in outsourcing can be found in business services, financial services, healthcare, and pharma and retail.

Figure 2 can be used as an indication of which industries are leading outsourcing in general and where the growth is. But note that these figures bundle findings for both ITO and BPO and represent outsourcing in general, not precisely offshore outsourcing.

Regardless of what the data says, opportunities for niche services can be found in any vertical industry. Experts indicate that no vertical industry is more relevant than the other. What is more important is that you specialise in a niche, which will increase your chances of finding partners and in being successful in the European market.

The relevance of a vertical industry starts with what you offer and what you are good at. Which vertical niches offer opportunities then depends on both supply and demand. For instance, there is no point offering an X-ray diagnosis service to the financial vertical industry.

What horizontal services offer most opportunities in Europe?

Not all activities outsourced by European companies are suitable for offshore outsourcing. Examples of such activities include components of event management, catering and cleaning services. As such, experts have identified horizontal ITES and BPO activities that are most suitable and that have most demand for offshore outsourcing. That is what figure 3 shows.

Figure 3: BPO and ITES services with greatest demand and suitability for offshore outsourcing

Source: Expert interviews (2019)

The top-three activities in figure 3 (digitisation services, administrative services and call (contact) centres_ are considered to be more low end and standardised business process activities requiring less human capital qualifications and experience. The activities at the bottom of the list (from research and development activities to architectural services) require most human expertise and are considered to be more high end in outsourced activities. These activities are also less standardised.

In general, the bulk of activities that are outsourced offshore by European companies are standardised activities. The more dependent activities are on language, and the more the activities involve privacy sensitive data, the more they take place onshore or nearshore in Europe.

It is expected that this bulk of standardised activities will no longer exist in the next 5–10 years, as they will mostly have been automated. Experts, therefore, recommend that you specialise in an activity and thereafter develop more value-added activities that are harder to or will take much longer to automate. This will ensure that your business is sustainable in the long run.

The bulk of activities can be found in digitisation services, administrative (back-office) services (such as elements of human resources services) and contact and call centres.

Digitisation services

Digitisation services include the process of converting texts, images, videos, business cards, periodicals and other manual or paper documents into digitised forms. Such activities are ideal for offshore outsourcing as they can be labour intensive, requiring only little computer literacy. This kind of work also does not require strong language skills, functional skills or a great deal of interaction between the customer and offshore provider.

The advantages of digitisation for companies include long-term preservation of manual or paper documents in one place which they will then have easy access to. Potential customers are those with a lot of archives, such as publishers, news companies, university libraries, etc. Although a lot of printed archives still exist today, most work today is completed digitally to begin with. Therefore, it is unlikely that demand for such services will increase further in the future. It is also expected that digital advancements in scanning capabilities will replace the demand for such services.

Administrative services (back-office services)

Various administrative services such as workforce administration and remuneration (both components of human resources services) are referred to as back-office services. Such activities are commonly offshored as they are high in volume but low in value to businesses; they are not a core activity of the company. Offshore companies in countries where people speak the same language as the company’s business language are at an advantage when delivering such services.

Additional back-office services that fall under this category include transaction processing (for instance of car rental, hotel or airline reservations), credit card processing, loan processing, and performing finance and accounting services, such as processing accounts payable, accounts receivable, financial reporting, tax preparation and internal audit services.

Contact centre services

In the past two decades, the number of offshore contact centres, especially call centres, has grown thanks to declining telecommunication costs. The use of toll-free numbers and technologies, such as virtual private networks (VPN) and voice over IP (VoIP) have made it easier and cheaper than ever to provide remote offshore contact centre services. Considering that wages now account for the majority of contact centre costs, such services have moved to countries with low labour costs in large scale. Contact centre services will be further discussed later in this report.

Other activities

Although all activities on the list in figure 3 can be outsourced offshore by European companies, demand for offshore outsourcing decreases as activities require more expertise, become more complex and the risk associated with outsourcing increases. Hence, the activities on the top of the list are the most outsourced offshore, and those on the bottom are the least outsourced offshore.

From this perspective, it could be assumed that the activities on the top of the list are the most promising to focus on as a service provider from outside Europe. Nevertheless, these activities tend to have the largest number of competitors both locally and internationally, which means that these markets will be most difficult to enter in terms of competition. At the same time, these standardised activities face the biggest risk of becoming completely automated in the next five to 10 years, especially digitisation and back-office works.

For some categories, such as human resources services, there could be more and less value-added activities. Activities such as recruitment outsourcing is a more value-added activity that is relatively difficult to outsource offshore, unless it is intended for the local offshore market. Workforce administration and remuneration activities that are of lower value and easier to complete remotely are more feasible for offshoring.

In practice, you will notice that large industry players and multinational BPO service providers offer a wide range of services for a wide range of industries. Examples of such organisations are Genpact, PCCI, Accenture, NGA HR and TCS BPO. You must not compare your business with such organisations. For SMEs, we recommend specialisation, which will increase your opportunities to build reputation. This will in turn strengthen your portfolio, increasing your chances of success,.

Which European countries offer most opportunities?

Europe is not a uniform market for BPO service providers. In general, the three most important factors that determine whether countries are important potential target markets are market size, openness towards international outsourcing and skills shortage. These factors vary between countries, plus additional factors influence openness to outsourcing, such as the presence of diaspora, wages, language and historical ties.

Market size

From a market-size perspective, the United Kingdom, Germany and France are potential markets for outsourcing, as they are the largest European markets. Together, they represent more than 60% of the European outsourcing market and are bound to offer opportunities.

Openness to outsourcing

The United Kingdom, Ireland, the Netherlands, Sweden, Denmark, Finland and Norway are interesting European markets because of their openness to outsourcing. Apart from the United Kingdom, their markets are smaller than those of France and Germany, but there is more willingness to outsource in the market, marked by a higher percentage of organisations that do outsource. These countries are still quite conservative towards offshore outsourcing specifically, but experts say that openness to offshore outsourcing has increased over time and continues to do so.

Multiple CEOs of European outsourcing associations were genuinely interested to hear more about what Ugandan and Senegalese service providers had to offer when we spoke with them. They indicated that regardless of Europe’s preference for nearshoring and their conservative behaviour in outsourcing, the greatest issue at the moment for Senegal and Uganda is that they are not recognised as BPO destinations — although Senegal is an exception in the French market.

The general opinion in Europe is that domestic economic development in business service sectors is a good thing. It has proven to have positive effects that drive knowledge-based jobs and higher education. These BPO developments are also considered to offer European companies in Africa the tools and opportunities to get on track to improving their operations in African countries. From that aspect, it is expected that the openness to collaborate with African countries will increase.

Another element that is expected to drive openness to outsourcing further is the gap in service offerings from established destinations. Certain processes are not taken any more by centres in countries, such as India and Eastern Europe, which now primarily offer high-value activities. This offers opportunities to and increases the openness of European countries towards newcomers. Such activities include standardised activities that are now considered too costly to complete in established destinations.

Skills shortages

Skills shortages are evident across Europe. Initially these shortages were apparent in Northern and Western Europe but now are also becoming common in Eastern Europe. Countries such as Moldova, Croatia and Bulgaria are all dealing with skills shortages and brain drain. Thanks to the ability to travel freely within the Schengen area, which comprises 26 EU states that have abolished all land passport and border controls, these countries are struggling to maintain their multilingual youth at home, which is driving companies to seek alternative workforce solutions.

Such skills shortages are now making these Eastern European countries interesting target countries. They have started to establish themselves as nearshoring destinations for Europe and require additional human resources to meet this demand. Companies from Moldova, Romania and Bulgaria that offer French BPO services have started to show an interest in French-speaking countries in Northern Africa, such as Cameroon and Togo, to subcontract to.

Factors that companies use to determine outsourcing destinations

When business from the above-mentioned countries seek an offshore outsourcing destination, there are a number of factors that they consider and prioritise before making a final decision, including:

1. Outsourcing is not only about price; 
2. Trust is critical;
3. Laws and regulations for data security and privacy;
4. Risks vs gains;
5. Nearshoring is preferred;
6. Professional, reliable partners (track record, certifications, eye for detail);
7. Linkages, including geographical, cultural, linguistic, historical and ethnic connections;
8. Business continuity and service level control;
9. Social and political issues, and pressure;
10. Ease of doing business and ease of communication.

All these factors make companies from most European countries being reticent about offshoring. They would prefer nearshoring rather than moving their businesses processes farther out. A study by DAXX revealed that businesses from the Netherlands, Germany, Austria and Switzerland had the ITO destination preferences shown in figure 4, sending little more than one-quarter of their ITO outside Europe. Experts confirm that this behaviour applies to BPO activities as much as it does to ITO and that this behaviour, in general, applies to all Northern and Western European countries.

There are minor fluctuations for individual countries. Germany, for instance, is even more conservative than the Dutch. Where Germany outsources approximately 77% of its activities within Europe, Dutch companies outsource approximately 66% of their activities within Europe and a higher-than-average share to Asia. Nevertheless, the majority of companies in Northern and Western countries prefer nearshoring. France, the United Kingdom and Spain are the only major exceptions.

The United Kingdom is the European country most open to offshoring and the least sceptical towards developing countries. Their openness is influenced by their cost-savings business culture but also by their long-standing business ties with many countries. French and Spanish companies also differ from the data in figure 4, because they have historical and business ties with French-speaking and Spanish-speaking countries respectively, and also a great dependency on doing business in these languages.

Companies in Eastern European countries generally outsource less than those in Northern and Western European countries but outsourcing is growing in Eastern Europe, too. Eastern European countries are also dealing with skills shortages and companies in these countries are seeking partners they can use to outsource to themselves. Eastern European companies prefer to nearshore but increasingly outsource offshore too. Although Eastern European companies can be considered competitors to Senegalese and Ugandan service providers, they could also be considered potential partners to collaborate with.

The primary reason why Eastern Europe is less open to outsourcing is because they are less experienced with outsourcing compared to Northern and Western European companies and they have fewer pioneers leading the way.

Figure 4 shows that Africa is not an obvious outsourcing destination for European companies. French companies are an exception due to the high number of French-speaking countries in Africa. But, for the majority of European companies, Africa has not yet become an important player in outsourcing.

From the above, except for the United Kingdom, most European countries are timid about offshore outsourcing, which makes Europe a difficult market to enter for offshore service providers. However, factors such as rising wages and skills shortages are pushing companies to amend their outsourcing perspectives, which will offer opportunities in the foreseeable future.

Interesting European countries for Ugandan and Senegalese service providers

The presence of diaspora, wages, language and historical ties increase the openness of European countries to offshore outsourcing. Personal connections can help bridge the gap between cultural and geographical distances. Figures 5 and 6 show where most of the Ugandan and Senegalese diasporas can be found in Europe, indicating where in Europe you can find essential connections.

Interesting markets for Ugandan service providers

The majority of people with Ugandan backgrounds living in Europe reside in the United Kingdom, as shown in figure 5. These connections combined with the historical ties between the United Kingdom and Uganda, as well as the shared language affinity, make the United Kingdom the most interesting market for Ugandan service providers to consider.

The other countries with most Ugandan immigrants (Sweden, Denmark, Norway, the Netherlands and Germany) are all part of the earlier mentioned countries with most openness to outsourcing and the largest markets for outsourcing. These countries could all, therefore, offer opportunities for connections with partnerships. New Wave Technologies in Uganda is an example of a company that delivers web design services to Clean Homes in Sweden. This collaboration was the result of personal networks that helped develop a relationship in Sweden.

Interesting markets for Senegal

The majority of people with Senegalese background living in Europe reside in France, as shown in figure 6. This, combined with Senegal’s French fluency and historical ties, makes France the most obvious European market to focus on. Although Italy and Spain also have a large number of people from Senegalese backgrounds living there, these markets may not be recommended due to the language barriers. These markets are also not known to be open to outsourcing. Germany, Belgium and Switzerland are other markets to consider. Germany, because of its large market size, while Switzerland and Belgium are interesting due to their sizeable Francophone populations.

For Senegalese service providers, we also recommended looking into countries in Eastern Europe, where French is also commonly spoken language. Examples of such Eastern European countries include Albania, Bulgaria, North Macedonia, Moldova and Romania, which are all members of the international Francophone organisation and are all countries where French is a customary language, including a noticeable affiliation with French culture. These countries are all dealing with skills shortages, which Senegal can help compensate for.

Although the United Kingdom is the most obvious market for Ugandan service providers to consider, while French-speaking countries are the most obvious markets for Senegal, this does not mean that less obvious markets are impossible to enter or consider. Take a look at Samres for an example of a Senegalese company that entered the Swedish market in call and contact centre services. This example shows that there can be opportunities if you specialise and find the right partners, who are willing to invest in you too.

Table 1: The most interesting European markets for Senegalese and Ugandan service providers

How relevant these markets are will depend on the precise services you offer as will be seen in the second part of this report.

Use the United Nations International Migration Stock 2019 to see where else in Europe there are populations with origins in your country.

For which ITES and BPO activities is there openness to outsourcing to Uganda and Senegal?

Although standardised and simple processes are considered more appropriate to outsource to Senegal and Uganda, there are no activities that offer absolutely no opportunities for Senegalese and Ugandan service providers. A logical exception to this rule are the activities that simply cannot be delivered. For instance, if you cannot offer services in fluent, accent-free German, then German companies seeking German services will not consider you at all.

Earlier we noted that different factors, such as language, historical ties and diaspora, influence openness to outsourcing. Yet, there are examples of success stories where none of these supporting elements can be identified. An example of such a case was mentioned earlier. The Swedish company Samres has its customer contact centre in Senegal, but these countries do not share a language, there are very few people of Senegalese descent in Sweden and little in terms of shared historical and cultural ties. The Samres’ case shows that even less obvious collaborations do take place.

The major issue currently identified by industry experts as the largest obstacle for Ugandan and Senegalese service providers is that there countries are not recognised as BPO destinations. There is not enough information available about what the conditions and opportunities are, so they simply are not the first countries that come to mind for buyers.

What are the obstacles for Senegalese and Ugandan service providers to enter the European market?

Despite there being no activities that offer absolutely no opportunities for Senegalese and Ugandan service providers, there are a few obstacles and challenges hindering Ugandan and Senegalese service providers from becoming major players in the European market. The main obstacles have got to do with infrastructure, education, ease of doing business, policy and regulation, and country branding. Additional challenges have to do with the competition.

Infrastructure

This 2019 research in 207 countries and regions tried to determine the average worldwide broadband prices. Both Uganda and Senegal failed to qualify for the research for insufficient or non-existent fixed-line broadband packages available for comparison. This by itself an indication of limited infrastructure advancements in both countries.

A study focusing on worldwide broadband speed did include figures for Uganda and Senegal. These figures revealed that Uganda ranks 138th of all 207 countries and 8th of all 40 African participating countries in terms of internet speed. Senegal ranks 159th among participating countries worldwide and 16th in Africa. From a global perspective, Uganda and Senegal are among the bottom-half performers, but from a regional or African perspective, they are among the top 10 countries with fastest internet speeds.

If we look at global costs of mobile data, then figures for Uganda and Senegal are available. Uganda ranks 101st of all 230 countries and regions that were part of the research and 28th of all 56 participating African countries and regions. Senegal ranked 70th of all participating countries and 20th of all African countries and regions.

If Uganda and Senegal’s internet speed and prices compare with common outsourcing competitors, then it becomes clear that other countries have a competitive advantage from this perspective. Table 2 compares Uganda and Senegal’s broadband internet prices (ranking), the broadband speed (ranking) and the mobile data costs (ranking) with leading outsourcing competitors.

Table 2: Broadband Internet prices (ranking), Broadband speed (ranking) and mobile data costs (ranking). A comparison of Senegal and Uganda with competitors.

*There were 2017 figures for Uganda, when Uganda’s average monthly costs were €71,19.

Source: Cable

The table above shows that Uganda and Senegal need to improve their infrastructure if they wish to remain or become competitive. They also need to provide alternative USPs to compensate for the shortcomings in infrastructure, as their internet speeds and prices are not competitive globally.

Education

Despite the availability of Universities in both Senegal and Uganda, experts and research findings indicate that graduates in both countries require a large amount of in-house training before being able to perform BPO and ITES services effectively.

The situation in Uganda

A European service provider based in Uganda revealed that finding talent in Uganda is a problem, because the education system is ‘far behind’. What employers want from their staff is entirely different from the competences that university students graduate with. This is the result of a system where students are taught to replicate information rather than develop their soft skills and critical thinking.

As result of the above, companies in Uganda require a lot of in-house training to develop the necessary soft skills and critical thinking. This is problematic because it can take up to two years before graduates reach the right competence level before being of added value for a company. Although it is beneficial for companies to invest in their employees to remain competitive and to make more money and profits, developing soft skills and critical thinking is time-consuming, taking the place of more technical competence training and development, a problem that could be avoided if the education system were adapted to develop these skills.

For Uganda, interviewees mentioned that the educational system does not put emphasis on details and requirements that are important aspects to deliver BPO activities. For BPO activities to be of high quality, details are essential. Issues that have been recognised in general in Uganda in terms of soft skills have got to do with work ethics, personal attitudes and communication.

Most complaints revolve around a possible relaxed approach to time commitments and lack of discipline where ‘say what you do and do what you say’ is not pervasive. With regards to communication emails, they are often poorly written, so there is a lack of response to queries and there is a lack of progress reports.

Fortunately, there are a lot of grants available for both local and international companies to work on capacity building. In Uganda, all private companies use grants to develop their personnel. Additionally, the National Information Technology Authority in Uganda (NATU-U) is working on multiple initiatives to enhance the calibre of Uganda’s young talent BPO and ITES pools.

The situation in Senegal

Digitally specialised companies in Senegal indicate that student profiles are not adapted to the actual needs of the digital market. To make new recruits employable companies are obliged to complete graduates’ skills by offering specialised training. The education system must be adapted to develop required cognitive skills (problem-solving and creativity), socio-behavioural skills (teamwork) and adaptability (reflected in self-efficacy and reasoning).

Fortunately, the Ministry of Higher Education and Research in Senegal is leading an ambitious programme to reform and promote the digital agenda. Additionally, the private sector is stepping up to complement the programmes offered by public education institutions.

Ease of doing business

The cost of doing business in Uganda is high. Not only is there a lack of tax incentives to stimulate foreign direct investment but transaction expenses, such as rent and insurance, are also very expensive. Corruption is another factor that makes doing business tiresome. The cost of labour is cheap but the initial investments required to get recruits up to speed eliminates the benefits of cheaper wages.

Another issue in Uganda is the unreliable supply of electricity. Not only are businesses faced with high tariffs, but they also have to deal with long power cuts that add extra costs. Since March 2019, the government has threatened to impose financial penalties on Uganda’s power distributor Umeme Ltd.

The main challenge in Senegal impacting the ease of doing business is the unbalanced relationship that the government appears to have with the private sector. There is a tendency to privilege certain insiders while treating others with suspicion and occasional harassment. This has resulted in the telecommunications sector to not be liberal and to favour certain internet providers, such as Sonatel.

Country branding

Marketing of BPO and ITES is very challenging for offshore service providers. Many potential clients from Europe are aware of established BPO destinations, such as Central and Eastern Europe, as well as India and the Philippines, putting other nations at a disadvantage. When asking European associations and potential clients about their willingness to collaborate with Senegalese or Ugandan service providers, their initial response is commonly that they did not know they even offered such services. But they were interested in hearing more.

Fortunately, there are success stories for Uganda and Senegal to learn from. Generally, it can take 7–10 years before results from country branding get picked up, but experience and experts indicate that succeeding is possible and that there certainly still is more room for newcomers. Madagascar, Egypt, Tunisia and the Caribbean are examples of countries and regions that have launched country branding campaigns and initiatives, which are proving to be successful. These examples also show that joint efforts from government and associations can play a key role in country branding, as well as in developing the sector.

Madagascar

Where countries like Morocco, Tunisia, Senegal and Mauritius dominated outsourcing in French-speaking markets, Madagascar suddenly became a major player. Madagascar got cable internet in 2009 and today has the fastest internet speed in Africa and 33rd in the world. As a result, the number of BPO providers has increased from just nine companies in 2006 to 233 companies in 2018, employing between 10,000 and 15,000 people. Although Madagascar has no immediate country campaign, their internet speeds have resulted in fast industry growth attracting many new clients and investors.

In addition to their advanced internet infrastructure, operators have set up a trade body, Goticom, to find synergies and to work on common issues such as infrastructure, regulation, training, popularity of the sector among youth, and internal and external communication. Some of the high-profile companies that outsource to Madagascar today include Deliveroo, which outsource their customer service, Voyage Privé, which outsource their invoice processing, and women’s magazine Marie-Claire, which outsource the handling of subscriptions.

Egypt

The Egyptian IT Industry Development Agency (ITIDA) is the executive body of the Egyptian Ministry of Communications and Information Technology that is responsible for developing the Egyptian IT industry. Established in 2004, ITIDA fosters the Egyptian IT industry through: 1) talent development; 2) Egyptian company development; 3) innovation and entrepreneurship support; 4) Investor attraction and support, and 5) business ecosystem development.

ITIDA’s ambition is to make Egypt one of the top-five global outsourcing and offshoring destinations. In doing so, they have launched the campaign Time for Egypt, which highlights their value proposition: abundant talent at a competitive cost, a pivotal location with a supportive government and inspiring innovation. As part of their efforts, Egypt also sponsors and exhibits at leading conferences and symposia, such as the Deloitte Shared Services and BPO conference, the Gartner Symposium ITXpo and GITEX.

Multiple industry leaders are now leveraging Egypt for their global service delivery. Examples of such companies include Valeo, Siemens Healthcare, Henkel, IBM, Dell EMC, Vodafone International services, Microsoft, Uber and Teleperformance. You can read more about how these companies collaborate with Egypt through this service provider catalogue published by the German Outsourcing Association. Most of these companies service offshore markets ranging from African countries to Gulf Cooperation Council (GCC) companies rather than solely targeting the local Egyptian market.

Egypt’s efforts are being acknowledged by multiple international organisations and institutions, including the German Outsourcing Association, Gartner, Frost & Sullivan, Capgemini Consulting, the Global Sourcing Association and Kearney. The Time for Egypt website provides more details about how Egypt’s reputation grew in the eyes of those industry players.

Tunisia

Tunisia launched their SmartTunisia programme in 2015, aiming at boosting Tunisia’s offshoring sector. The goal of the programme was to create 50,000 jobs within five years. It received funding from a public-private partnership, plus another €451 million as in government planned investment in three core activities: education, infrastructure and legal framework.

In education, the programme targeted language and soft skills of graduates and talent in the labour market. With regard to infrastructure, tech parks meeting all the requirements of standards and modern security, telecom and IT infrastructure were designed. Finally, in the legal framework part, Tunisia committed to meeting legal requirements set by Europe, including the convention on the protection of individuals in the automatic processing of personal data. Money was to be spent on job creation subsidies and financial aid for certification and registration purposes.

The Caribbean

The first Outsource to the Caribbean conference was first held in 2017, followed by a second edition in 2019. Their purpose was to promote the Caribbean value proposition in the outsourcing sector, generating interest in the region’s offerings to convert it into investments and jobs. The Caribbean’s key source market is North America and their value proposition includes competitive cost levels, a well-educated workforce with extensive language capabilities, flexible labour regimes, time zone advantages and geographical proximity.

Challenging competition in the European market

When looking at competition, Senegalese and Ugandan service providers must consider competing countries and companies but also alternatives to outsourcing, such as automation and new service delivery models.

Competing outsourcing destinations

Outsourcing destinations competing for European business include nearshore countries and the countries included on the Kearney Global Services Location Index.

Preference for nearshoring

For all BPO and ITES activities, the general rule is that European companies have a preference for outsourcing to service providers in the same country due to language, culture and proximity reasons. When they do outsource abroad, they will prefer nearshore locations for the same reasons. Such locations are primarily found in Eastern European countries, such as Poland, Bulgaria and Romania. Nevertheless, wages in these countries are beginning to increase, making them less competitive from a cost perspective. These nearshore destination countries are also increasingly facing skills shortages themselves.

Kearney Global Services Location Index

Other countries that can be considered leading ITES and BPO competitors can be found on the Kearney Global Services Location Index (GSLI). This list ranks which countries are most attractive for outsourcing based on financial attractiveness, people skills and availability, business environment, and digital resonance. The leading countries on the list are all offshore destinations, including the highest-ranked India, China, Malaysia, Indonesia and Vietnam.

These leading outsourcing destination countries, including India, are changing. Wages are rising in those countries and the services they are providing have higher value added, fetching higher prices. This scenario is opening up opportunities for other low-cost destinations, such as Senegal and Uganda.

With this shift towards value-added services, Africa is expected to grab a share of the ensuing opportunities. Africa has a large young population available, low average wages, multilingual capabilities, relatively good infrastructure and time-zone advantages in relation to Europe and Asia. Sub-Saharan Africa is considered to be particularly emerging as a strong contender in the BPO sector.

These opportunities are not only originating in traditional client countries, such as those in Western Europe and North America. The leading outsourcing destination countries are also looking for outsourcing providers and subcontractors in these destination markets themselves. If countries like India, China and Malaysia are shifting towards more value-added services at higher costs and prices, then they are likely to seek offshore service providers themselves.

Remember that the costs and risks associated with switching between suppliers are high. Therefore, getting companies to switch destination countries or suppliers may be a time-consuming process requiring a large amount of convincing and patience.

Senegal used to be a top outsourcing destination on the Kearney GSLI, but has recently dropped off the top-50 destination countries. Senegal ranked 26th in the world in 2009, then slipped to 45th position in 2016, and by 2019 was no longer among the top 50. Table 3 below shows how some African countries on the Kearney list have performed since 2004.

Table 3: Performance of selected African countries among the top-50 countries on the Kearney GSLI 2004–20190

Egypt has a leading position in Africa and has been relatively stable in the past five years. Mauritius and Morocco have been relatively stable since 2007, thanks to the workforce ability to work in French. Kenya is relatively new on the list. Ghana and South Africa were well-known destinations before Kenya came into the picture but both Ghana and South Africa risk dropping out of the top-50 group, as their ranking continuously declines. Tunisia and Senegal have both recently been taken off the top-50 list.

When ranking countries according to outsourcing attractiveness, Kearney initially assesses: 1) financial attractiveness; 2) people skills and availability, and 3) business environment. In the latest edition, they included digital resonance, which looks into the workforce’s digital skills, the ability of the legal framework to adapt to digital business models, the number of capital investments in start-ups and digital outputs.

The elimination of Senegal from the top-50 list could imply that one or all of the initial criteria which they used to score positively, are going down or that their digital resonance is low, making them less attractive in the world after this criterion was added.

Alternatives to outsourcing

Although countries, cities and regions compete globally to become established outsourcing destinations, a great threat to outsourcing is the automation of business processes. As the search for automation opportunities grows, so does the threat of automation solutions. Additional threats to Senegalese and Ugandan service providers are in-house departments, captive centres (client owned and operated service delivery centres) and back sourcing, which is when companies move previously outsourced services back in-house or locally, often driven by automation.

New service delivery model, such as using technology, can substitute traditional BPO and ITES services to some extent. An example of this are web-based services that can replace traditional business processes. These new delivery models can be a threat to Senegalese and Ugandan service providers because they change the way things were done before. But they can also offer new opportunities of enabling service delivery from a distance.

The digital transformation and security

Businesses are increasingly using digital technologies to create and modify business processes. The business and market requirements are changing with the digital transformation. It is apparent that the costs saved through outsourcing may add up to 15% to 30%, while potential savings from robotic process automation (RPA) and artificial intelligence (AI) can grow to between 40% and 75%.

By digitising processes entirely an organisation will save on travel, training costs, supervision, errors and communication issues. Now that machine learning, data analytics and the internet of things are developing faster, this will eventually lead to digitisation being able to compete with human tasks even faster, better and cheaper.

This digital transformation is increasing the exposure of companies to cyber threats and therefore a greater understanding of the factors that influence this vulnerability is necessary. Countries that are able to adapt their legal systems to deal with such matters are at an advantage. Kearney has identified the United States, the United Kingdom, Israel, Canada and Singapore as the top-five countries in the world with the highest level of digital resonance.

Value-added services are a competitive advantage

Cost reduction remains a major driver for companies to outsource certain business processes, but as the global BPO and ITES market matures, customers demand more value-added business solutions instead of just cost-cutting measures targeting jobs. Companies are increasingly seeking service providers that are able to differentiate themselves through key performance indicators (KPIs). Service providers that focus on soft people skills and human capabilities to redefine and create value for their clients will succeed in the long run.

Fortunately for Senegalese and Ugandan service providers, European companies still seek partners to outsource standardised activities to, but we recommend these service providers to develop added-value business solutions as well to benefit from them in the long run.

Rivals in the European market

The standardised horizontal services that are easiest to outsource are the services with the greatest rivals both locally and internationally. Not only are there new service providers entering the market, existing service providers are also expanding and improving their range of services. Therefore, the competition is moderate to strong and continues to develop. But the intensity of the competition diminishes as service providers specialise in niche services, because buyers have fewer providers with specific expertise to choose from.

6. Part II: European opportunities and obstacles for specific ITES and BPO in Senegal and Uganda

This second part of the report looks into the opportunities and obstacles in the European market for specific ITES and BPO services from Senegal and Uganda, and particularly for inbound marketing services, call and contact centres, and human resources services.

Inbound marketing services

Inbound marketing is referred to by Teamgate as all the marketing efforts that are geared towards earning customers’ interest and aligning it with their needs rather than just pushing a product or service. Inbound marketing services include activities such as content marketing, social media marketing and search engine optimisation, which are used to engage with or attract potential customers or leads via company-created internet content to products and services.

According to experts, inbound marketing activities can be divided into more standardised, low value-added activities and more value-added activities. Standardised activities include more operational tasks, such as placing actual pre-written postings on websites and social media, and technical search engine optimisation (SEO) activities, such as adding predefined title tags and alt text. Value-added activities include creative content creation that is thereafter shared on websites and social media channels. Technical activities require less local language fluency than value-added and creative content development services.

Demand for all of these activities is on the rise among European companies, which they use to market their business and keep in touch with customers. However, companies often struggle with optimising, managing and monitoring these activities, which leads them to outsourcing these services to service providers.

Inbound marketing services are likely to see the greatest growth among these activities in the coming years, as the importance of inbound marketing continues to increase.

European market demand

The most interesting target countries in Europe for inbound marketing services are those with the most organisation using both websites and social media in their online presence. Table 4 below shows the top countries adopting both websites and social media: Denmark, Malta, the Netherlands, Sweden and Iceland. With the exception of Malta, this fits with findings from industry experts who confirm that Northern and Western European countries are leading the way in inbound marketing.

Table 4: Usage of website and social media by European enterprises in 2018 (% of enterprises)

Source: Eurostat

Although Germany and France appear to be less active in inbound marketing based on the online presence of enterprises, they are still interesting markets to consider. This is because their absolute values are likely to be higher than those of smaller countries that appear more promising. For instance, Germany is a lot larger than Denmark and is likely to have a far greater number of enterprises. This means that 43% of the enterprises in Germany is likely to be more actual companies in absolute numbers than 67% of the enterprises in Denmark.

The industries that offer most opportunities for inbound marketing services are those with the highest number of consumers where the online marketing element is a lot stronger. Particularly the tourism, fashion and garments, and food industries are interesting sectors that have adopted inbound marketing concepts. In the business-to-business (B2B) sector, there is still a lot of scepticism towards inbound marketing. However, throughout Europe companies increasingly use inbound marketing techniques to attract employees too.

Inbound marketing concepts tend to be low cost and high impact, which makes them increasingly popular. In general, small companies in Europe understand inbound marketing well and apply many techniques themselves. Similarly, large companies are dedicating complete departments to inbound marketing. It is the medium-sized companies that offer the best opportunities. They are the ones that realise that inbound marketing is important, but simply do not know how to go about it. These are the customers that can be easily influenced.

Recommended markets for Senegalese and Ugandan service providers

For both Senegalese and Ugandan service providers seeking to provide standardised, low-level inbound marketing services, the leading countries are interesting targets. These include all countries mentioned in the third column of table 4. Especially those that overlap with the countries recommended for Senegal and Uganda earlier in this report are interesting. For Senegal, this means that France and Germany are interesting to look into. For Uganda, it means that Denmark, the Netherlands, Sweden, Norway, the United Kingdom and Germany are all interesting.

For standardised services, Senegal could also consider the countries mentioned for Uganda, including Denmark, the Netherlands, Sweden, Norway and the United Kingdom, but they would require staff proficient in English to communicate effectively in business. They are also less recommended due to the minimal presence of communities of Senegalese descent in these countries. For Germany, Senegalese providers would also require fluent German, but there are people of Senegalese descent in Germany who could be potential connections.

For Ugandan providers wishing to target France, they must find an intermediary with whom they can communicate in English, however it is better to do business with French companies in French. Many companies in Northern and Western Europe use English as a primary business language, but French and German companies are exceptions; they mostly communicate solely in French or German.

For more value-added services, we recommend Ugandan providers to focus on the United Kingdom and Senegalese providers to focus on countries with sizeable French-speaking populations, such as France, Belgium and Switzerland. This is because the use and quality of written language is very important in inbound marketing to bring across messages effectively. Apart from the United Kingdom, most European companies in different countries will have their website in their local language and not in English. This is why they are unlikely to be interesting in Uganda or Senegal to outsource value-added services.

Both Senegalese and Ugandan service providers must keep in mind that there are European and other international potential customers active in Senegal and Uganda that are also interesting to consider.

European trends

Trends that are common in the European Inbound marketing services market are the increased demand for value-added services, storytelling, use of visual content, social media dashboards, big-data analysis, design trends and open-source products.

The shift from technical to value-added services

Standardised components of inbound marketing, such as SEO, have been traditionally outsourced for more than 15 years now, but companies are increasingly seeking value-added solution providers. Although there will always be companies that solely seek support in standardised activities and prefer to keep control of their own context and content, experts indicate that there is a trend in preference towards service providers that are able to take control and function as a sparring partner.

Storytelling

Storytelling is defined as the use of a narrative to connect brands to customers while focusing on linking what the brand stands for to the values shared with the customers. Today, inbound marketing and storytelling go hand in hand and the importance of storytelling is increasing. Not only do 92% of all consumers want brands to make advertisements that feel like a story but the technique also ensures that people can better relate to what they see. As companies become more aware of the essence of the storytelling content marketing technique, they seek partners that can help apply it.

The fast-moving consumer foods industry is an example of industry where the storytelling technique has become very visible. The main reason behind it is the search for transparency in the supply chain. Consumers increasingly want to know where their food comes from and how it’s produced, so different brands and retailers are using storytelling techniques to make it more visible. Fish-Tales is a good example of a company using storytelling effectively.

Use of visual content

Website visitors take less than five seconds to determine whether the webpage they are on is relevant or not. Visitors also scan the page instead of actually reading the written content. This has resulted in alternative audio-visual content to become more essential in attracting and engaging visitors.

Visual content that can be applied to websites and social media can consist of images, videos, infographics, calls-to-action buttons, website animations, slide share presentations and more. All of these techniques are important to enhance engagement with visitors, which thereafter will increase opportunities for conversion.

Experts say that the trends in visual content use are part of the storytelling technique, as different visual content, such as videos and photos, help enhance and drive the messages delivered by the technique.

Social media dashboards

As the role of social media in marketing strategies grows more important and companies use a wider range of social media channels — such as Twitter, Facebook, LinkedIn, Instagram — social media dashboards are becoming increasingly popular. These social media dashboards are a management tool that allows companies or individuals to coordinate and plan social media presence across multiple channels through a single interface.

Not only do social media dashboards make publishing more efficient but they also promote productivity and collaboration, and facilitate tracking competitors and scheduling content, while also providing analytical insights. Examples of social media dashboards are Agorapulse, DashThis and Hootsuite.

Big-data analysis

Companies are increasingly adopting big-data services because big data can generate insights that offer good business opportunities. Social media dashboards and other tools can help retrieve data about customers. This data can be analysed and used to confirm whether companies are targeting the right audience. They can also use data to create more personalised and targeted content.

In inbound marketing, big-data analyses help provide a bigger picture about the relationship that companies have with their customers while also boosting lead generation and providing an overall client-centric journey.

Design trends

Design trends, which are important for inbound marketing, refer to the look and feel of websites. These design trends vary per country, mostly because of cultural differences. For example, having websites meet the latest design trends is generally more important to Western than to Southern and Eastern European companies. Although techniques for web design and development vary minimally between worldwide, the way websites look does vary per country.

When considering design trends, it is also important to consider the different devices and operating systems used. Different designs created for websites generally look differently on a laptop compared to a tablet or mobile phone. Additionally, not all software or applications may be compatible with different operating systems. An example of this is Adobe Flash Player, which is not compatible with Apple iOS. It is important that you consider which software or applications you use and that you adjust content and visuals, where necessary, according to different device requirements.

Open-source products

Open-source products have simplified the writing of web applications by facilitating rapid application development (RAD). They allow development teams to focus on the parts of their applications that are unique to their goals, without having to resolve common development issues, like user management. Open-source web applications are more flexible, making users less dependent on third-party servers. European companies increasingly use enhanced open-source products, such as PHP, MySQL and WordPress.

These open-source products make it easier for you to deliver inbound marketing services without having to make high initial investments in software. In fact, these open-source products have opened doors for SMEs around the world to offer web development and inbound marketing-related services. The wide use of these open-source products on a global level also means that there is a large knowledgeable online support base.

Competition in the European market

Competition in the European inbound marketing services market mostly comes from local players based in the target market. Experts recommend focusing on these players rather than targeting end users directly. For components of inbound marketing services, such as SEO, there are competitors all over the world, but India has a particular reputation for being a strong destination for SEO services.

Fortunately for new players looking to enter this market, it is a market that is growing quickly. Therefore, the market is not yet saturated and there is still room for newcomers. From that aspect, the competition is less fierce than many other activities, such as contact centres. This, however, mainly applies to value-added activities. For the standardised activities, such as standardised SEO, the competition is a lot stronger.

Language affinity is less important if you provide standardised services. In this case, business-level language proficiency is sufficient, but as you deliver more value-added services, the importance of language fluency increases. This means that for both Senegalese and Ugandan service providers targeting the European market with standardised services, competition comes from anywhere in the world.

For Ugandan companies seeking to deliver value-added activities, competitors do come from all over the world too, including all English-speaking countries. In the case of Senegal, competitors for value-added activities come mostly from French-speaking countries. In both cases, the strongest competition comes from local service providers based in the client’s market. These service providers have the best language capabilities, cultural affinity and geographical proximity.

When asking European outsourcing associations about the willingness of companies to outsource inbound marketing services to Uganda or Senegal, the general response was that knowledge of African countries as BPO locations is very poor and that only Egypt is known for its offshoring. It is expected that the absence of information about conditions and opportunities in Senegal and Uganda will make it rather difficult to offer services in Europe. However, interviewees did react positively towards the idea and were very interested to hear more about what Uganda and Senegal have to offer.

Market channels and marketing methods

The best way to enter the market is by approaching local competitors and service providers rather than approaching end-user companies directly.

Being a subcontractor for a local company is the most realistic entry method to use. The concept of inbound marketing is still new for many end users. Hence, it is unlikely that they will outsource unknown activities to unknown destinations. It is all about trust and end users prefer using a local contact person who is nearby. Local service providers that are already well familiar with the concept of inbound marketing will feel a lot more comfortable outsourcing these activities to service providers such as yourself.

When you choose a target country, we recommend that you map what the supplier market looks like. Do research about which local service providers there are and what they offer. Also determine whether their size and capacity match your own. Then see how you can get in touch and create a partnership. There will always be exceptions, where it is possible to work directly with European end-user companies, but this market will be significantly smaller and opportunities more unlikely. The use of experienced sales agents and intermediaries are the best method to target your potential customers in European markets.

It is also recommended that you focus on international companies in your own home market. Examples of such companies with local affiliates in Uganda are Heineken, KLM and Shell. Examples of international companies in Senegal are Nestlé, Maisons du Monde and Orange. Do not forget that all these enterprises aim to target customers in your local market and who can better target local consumers than you can? In your local market you have all the advantages of language, proximity and cultural affinity and you can use these local opportunities to grow regionally too.

Competitive advantages and unique selling propositions

When developing a unique selling proposition, the needs and motivations of potential clients to outsource inbound marketing services must be understood. It is also important to know what the potential advantages could be for companies to subcontract services to Senegalese or Ugandan service providers.

These advantages include general benefits such as lower costs, access to linguistic capabilities and access to skilled labour but for inbound marketing services additional motivations exist. Customers will seek long-term partnerships that they can trust as well as partners that can provide creative solutions and apply active thinking. These human elements of personal touch, relationships, and creativity are essential to meeting the needs of potential customers; addressing them in your unique selling proposition will be beneficial.

Senegal has a logical competitive advantage when looking at French-speaking target markets, due to the French linguistic capabilities of its workforce compared to competitors that do not have this ability. Uganda’s English capabilities give them an advantage when approaching English-speaking target markets. Unfortunately, for both Senegal and Uganda, there are several other destinations and companies that have these competences and the human element is where service providers can truly stand out.

Senegal and Uganda have lower wages than competitors and customers in their European target countries. This is a good indicator to mention, but remembered that providing the lowest possible rates is not a desirable goal, because it will not be sustainable. Services are eventually priced according to a rate that makes it interesting to do business with the highest possible quality.

Additional competitive advantages and unique selling propositions will develop over time. It is important to exploit experiences through your promotional tools. Highlight successes and use analytics tools to prove the impact made. Building a strong portfolio is the best way to show potential customers your unique capabilities and quality compared to your competitors. Process management certifications are another effective way to highlight your commitment to quality procedures and results.

What will also be helpful in building a reputation is bundling the strengths of multiple companies in your country and working with a local business support organisation or association. By working together, you can increase your chances of developing an image of being a country renowned for inbound marketing services. Your country reputation will be further enhanced if you combine your expertise, experiences and promotion budgets.

There are few countries or associations where companies currently combine efforts to enhance their country image. If you begin to do this, it will give you a competitive advantage, while you can reduce your promotional costs, which you will share with your local competitors.

Call and contact centres

Call and contact centres are facilities that manage all customer contact., including complaint handling, technical support, dispatching and event registration, pre-sales activities, surveys, loyalty and retention, sales and credit collection. Examples of channels used by contact centres include telephone, email, voice portal services, interactive voice response (IVR) self-service, live chat by humans or chatbots, social media and cloud-based self-service channels, SMS and traditional mail. Most contact centres offer multichannel services.

Contact centres are among the BPO activities most outsourced to developing countries, among those covered in this report.

European market demand

The European market for contact centre outsourcing had an estimated value of €20.19 billion in 2018, making up 25.1% of all contact centre outsourcing in the world that year. Only North America surpassed Europe with a larger portion of the market share (37.5%). The global market for contact centre outsourcing is expected to grow at annually at approximately 5.8% on average between 2018 and 2025. If the European market follows that trend, the market value for contact centre outsourcing in Europe will reach €33 billion in 2025.

European businesses do not survive without providing good customer service, including a customer call centre service. Hence, demand for call and contact centre services exists in all European countries, among European companies of all sizes and industries. Start-ups and small companies may choose to outsource instead of investing in equipment and staff themselves. Medium and large companies need various contact services and want to offer a whole range of customer contact options, so they also often prefer to outsource most of these services.

Sometimes European companies choose to keep the customer contact services in-house, and only outsource specialised services, such as interactive voice response (IVR), telemarketing or debt collection.

Not every inbound channel enjoys the same popularity in each European country. For example, when it comes to inbound contact centre activities, the Nordic countries (Norway, Sweden, Finland and Denmark) are more likely to use social media and web chat than customers in Western Europe, the United Kingdom or Central and Eastern Europe.

When looking for European countries that offer opportunities, it is important to consider the language spoken in the country, what inbound channels are common, what preferences there are for nearshoring and offshoring, and what are promising vertical markets. Experts also indicate that when looking for promising countries or industries, it is important to consider whether a company is a business-to-business (B2B) or business-to-consumer (B2C) organisation. Those focusing on consumers are likely to have more need for contact centre services.

Recommended markets for Senegalese and Ugandan service providers

The French market is the most obvious European market for Senegalese providers to focus on with their contact centre services because of the workforce’s ability to conduct business in French. For this reason also, other French-speaking European markets are also recommended as the best markets for service providers from Senegal to focus on. In addition to France, that also includes Belgium and Switzerland. France in particular offers the best opportunities due to the market size and cultural, historical, political and business ties with Senegal.

The French market, however, is already very saturated by service providers from both local and Northern African countries with large French-Speaking populations, such as Tunisia and Morocco. Therefore, we also recommend Senegalese providers to look into opportunities with second-tier service providers in France, Morocco and Tunisia.

For Senegalese providers, companies in Eastern European countries are considered competitors, but they are also potential partners. Due to rising wages, increased skills shortages and the willingness to offer French-speaking services, they could offer opportunities for subcontracting. Albania, Bulgaria, North Macedonia, Moldova and Romania are especially interesting Eastern European countries for Senegalese providers because of their historical ties with France. All these Eastern European countries, for instance, are members of the International Organisation of La Francophonie.

The United Kingdom is the most obvious market for Ugandan providers to focus on, primarily because of the English language, the United Kingdom’s openness to outsourcing, the British cost-focused mentality and the historical and trade ties with Uganda. The British market is very saturated and there is severe competition from all over the world, including from Eastern Europe, Asia and Africa. Providers in many of these countries may have advantages over Uganda in terms of proximity, experience and more accent-free English capabilities, which will make the United Kingdom a very tough market to enter.

Specific buyer requirements for contact centre services

European consumers and business customers in general expect customer service to be available in their native language and to be accent free. One of the important aspects for companies selecting a contact centre outsourcing destination, therefore, is the availability of language skilled people in your country and in your company’s staff. Recent changes brought about by artificial intelligence (AI) are reducing the need for contact centre employees to speak the local language of their target country, but it will still take a long time before local fluency is not required at all, if it ever happens.

Apart from native language availability, buyers prefer contact centre service providers who are able to speak multiple languages. In Moldova, for instance, call centres like Primo Contatto can provide services in 15 different languages. Accents should also be as neutral as possible. Performance metrics are another important indicator for European buyers. Next to speed, quality and flexibility, important selection criteria include customer satisfaction, average speed to answer, call abandonment rates, first-call resolution rates, call durations, call transfer rates and costs of inbound and outbound calls.

European trends

The main trends that offer opportunities in the European market for contact centre outsourcing are the switch from multichannel to omnichannel services, the switch from cost centres to opportunity centres, the integration of artificial intelligence (AI) into customer service, cloud services, self-service and social media support.

Multichannel to omnichannel services

Although telephone remains the main communication channel for contact centre services, European companies prefer service providers that offer multichannel services, as their customers expect customer support to be available anytime, anywhere and from any device. Omnichannel environments are the next step in multichannel services, integrating channels and allowing customers to switch between channels while completing enquiries.

Shift from cost centre to opportunity centre

European companies traditionally perceived contact centres as a necessity that only costs money, but companies have recently started to understand the value-added benefits that contact centres can offer. Customer analytics, for instance, is one of the few added-value opportunities that contact centres can offer to increase company insights about their customers, sales and marketing.

Artificial intelligence integrated into customer service

Artificial intelligence (AI) is increasingly being used in contact centres. Chatbots are an example of AI where the customer conversation is initially handled by a bot (a digital robot) before being passed on to an agent. The use of AI in customer service and predictive analytics is expected to grow in the coming years. However, the full elimination of human interference as a result of AI is not likely to occur. Actual contact centre agents will remain important in the industry.

Cloud computing

Cloud-based contact centre solutions are becoming increasingly important. Initially this was due to cost reduction but now it is stimulated by benefits including flexibility, scalability, faster deployment, security, reliability and ease of managing remote agents. This trend brings opportunities because it makes working from remote locations easier, hence increasing the possibilities and ease for offshore outsourcing, including to Senegal and Uganda.

Self-service

European companies increasingly emphasise self-service, problem-solving information through IVR applications or the web. This reduces call volumes and costs associated with direct customer contact.

Social media as a form of customer contact

European companies are investing in their presence in consumer messaging apps, such as Facebook Messenger and WeChat, to reach customers. Since Europeans spend a lot of time on social media, customer contact via that medium is perceived as easily accessible.

Competition in the European market

European countries prefer to outsource contact services onshore or nearshore. The United Kingdom and Spain are exceptions of this nearshoring rule. Companies from the United Kingdom are more open to having international call centres in India, South Africa and the Philippines, for example. The Spanish prefer working with Spanish-speaking countries in Latin America.

Other exceptions to this rule primarily occur in the tourism industry, where companies try to ‘follow the sun’. In order to deal with time zone differences and to deliver 24/7 services, companies in the tourism branch may seek offshore service providers. An example of such a company with worldwide locations is Mindpearl.

The main competitors for Senegalese service providers targeting French-speaking markets come from countries with large French-speaking populations, including Tunisia, Morocco, Mauritius and Madagascar. Companies in Eastern European countries that are members of the International Organisation La Francophonie can also be considered competitors, but they are also potential customers. Competitors to Ugandan service providers targeting the United Kingdom include all countries with sizeable English-speaking populations.

The markets with the least competition for both Senegalese and Ugandan service providers are likely to be their own home market.

Market channels and marketing methods

The best way to enter the market is by using local sales agents and European competitors rather than approaching end-user companies directly. The contact centre market in Europe is very competitive, and companies rarely approach call centres for support. Instead, service providers require local sales agents who know the industry and are prepared to get on the road and cold call. Finding potential customers requires extreme proactivity.

The use of a sales agent applies whether you target a European service provider in your target market or in a nearshore market servicing your final target market. An example is the provision of contact centre services for the French market. Senegalese service providers can use a sales agent in France to seek potential customers on their behalf in France, but they can also use sales agents in Romania or Moldova to seek service providers offering services to the French market and become a subcontractor.

Better opportunities for collaborating with European companies lie in your local market. Experts recommend having a look at which European or international players are active in the local market that may require contact centre services. It is also expected that local companies in your own market will increase their demand for customer experience and contact centre services in the coming years. Hence, even locally there are opportunities.

Competitive advantages and unique selling propositions

When developing a unique selling proposition, the needs and motivations of potential clients to outsource contact centre services must be understood. It is also important to know what the potential advantages could be for companies to subcontract services to Senegalese or Ugandan service providers.

These advantages generally include common outsourcing benefits, such as lower costs, access to linguistic capabilities and access to skilled labour, but additional motivations can also exist. Customers will seek partnerships that understand the customer’s industry and clients, and are able to train their staff to deliver best-quality services. Different types of contact centre services offered may also require different competences and attitudes from personnel.

The Dutch, for instance, have experienced that Surinamese staff were excellent for helpdesk and problem-solving activities, but were less capable of fulfilling outbound telemarketing activities with a customer-friendly attitude. This shows that in addition to language capabilities, you may require internal training in telephone etiquette and listening skills, but potentially also in accent neutralisation, industry specific knowledge and problem and object handling.

Highlighting your company’s unique selling points that meet the exact needs of your target company will be beneficial in making you unique compared to competitors.

Additional competitive advantages and unique selling propositions will develop over time, as is the case for inbound marketing. It is important to exploit experiences through your promotional tools. Highlight successes and build a strong portfolio. This is the best way to show potential customers your unique capabilities and quality compared to your competitors. Process management certifications are another effective way to highlight your commitment to quality procedures and results.

What will also be helpful in building a reputation is bundling the strengths of multiple companies in your country and working together through a local business support organisation or association. By working together, you can increase your chances of developing the image of being a country renowned for contact centre services. Your country reputation will be further enhanced if you combine your expertise, experiences and promotion budgets.

There are few countries or associations where companies currently combine efforts to enhance their country image. If you begin to do this, it will give you a competitive advantage and reduce promotional costs, since they will be shared with your local competitors.

Human resources services

Human resources are the people who make up the workforce of an organisation, the personnel. Human resources services consist of the administrative services for hiring, managing and administering human resources processes across all areas. Examples of human resources activities include workforce administration, staffing and recruitment processes, performance management services, learning and development services, remuneration, retirement and financial services, and advocacy services as specified in table 5.

Table 5: Examples of human resources services

According to industry experts, the most promising segments for you as an offshore service provider from Uganda and Senegal are workforce administration, performance management services and payroll services. This is because these services are less complex, more standardised and require relatively limited language skills.

European market demand

The global market for human resources outsourcing is projected to reach €37.1 billion by 2024, which means an average annual growth rate of 9%. Human Resources is the largest business process outsourcing segment worldwide making up for more than a third of the global BPO market. Within Europe, the main markets for human resources outsourcing include the United Kingdom, Germany, France and the Netherlands.

Common reasons to outsource standardised human resources services are similar to the general motivations to outsource, which include cost reduction and efficiency improvement. However, demand for human resources services is sensitive to data security. This is of utmost importance to European companies, which expect their service providers to be discrete and comply with full confidentiality.

Recommended markets for Senegalese and Ugandan service providers

The best opportunities for offshore service providers of standardised human resources services can be found in the United Kingdom, Germany and France because of their market size. Ireland, the Netherlands, Sweden, Denmark, Finland and Norway are also interesting. Their markets are smaller, but companies in those countries are open to outsourcing these services. For standardised services, language capabilities are less important and a decent level of business English proficiency is sufficient to collaborate with the mentioned countries, except for France and Germany, which will require you to have French or German capabilities.

The greatest opportunities for Senegalese providers will be in France, due to the historical and linguistic ties but other markets can also be considered, provided that Senegalese service providers are able to communicate using business-level English in these markets. In that case, they can also consider the United Kingdom, Ireland, the Netherlands, Denmark, Sweden, Finland and Norway too. We recommend Ugandan providers to focus on all potential markets, except for France and Germany unless you can work in French or German, the preferred business language in these countries over English.

The company sizes that offer the most opportunities for companies from Uganda and Senegal are those that are similar to the size of Senegalese and Ugandan SMEs. What is important is that the needs of the potential clients match the capacity of the Senegalese and Ugandan service providers.

European trends

Trends in the European market for human resources services include technology developments, such as cloud computing, robotic process automation and selective sourcing.

Cloud computing

An important development is the rising use of cloud computing in human resources services. Providers are increasingly delivering their services via cloud-based solutions. This gives clients easy and secure access to their human resources information. Companies themselves are also increasingly switching from licensed software on premises to software in the cloud, via software as a service (SaaS) subscriptions or hybrid solutions.

Robotic process automation (RPA)

Robotic process automation continues to be a main trend in business process services. However, human resources services often require human decision-making. This means a combination of outsourcing and automation may offer the most cost savings for your client.

When it comes to implementing new technologies, data security is a ‘must have’. Predictive analytics, mobile access and social features are also among companies’ main requirements.

Therefore, other key human resources technology trends include: analytics (workforce analytics and big-data tools to analyse the job market and recruitment advertising); mobile applications (mobile learning, recruiting, collaboration and employee management); tools to enable social learning, knowledge management and training administration, and social media (recruitment services).

Selective outsourcing

Selective outsourcing is a continuing trend in human resources services outsourcing. It refers to companies only outsourcing specific activities, while performing other human resources tasks in-house. This is especially suitable for tasks that are not core business functions but require specialised knowledge. Outsourcing these activities saves companies time and costs. It gives them access to the required expertise and allows in-house employees to focus on core business.

Competition in the European market

For both Senegalese and Ugandan service providers, competition comes from countries and companies in nearshore and offshore markets, including all countries mentioned on the Kearney Global Services Location Index. For Senegalese service providers targeting the French market, most competitors will come from other francophone regions.

As mentioned before, countries like India, which have traditionally provided such services, are shifting towards the provision of more value-added services. This opens up opportunities for new service providers from other countries, such as Uganda and Senegal. However, of the three activities highlighted in this report, the standardised human resources services are the most vulnerable to substitutes and digital transformation.

A large portion of human resources services are expected to become fully automated in the next five to 10 years. In order to remain competitive and relevant, we recommend you to specialise in more value-added human resources services.

Countries that have legal systems in place that help protect sensitive data also have a competitive advantage. Human resources services are considered sensitive to data security, which is of utmost importance to European companies. They expect their service providers to be discrete and to comply with full confidentiality.

The local market in Senegal and Uganda also offer opportunities. These markets have growing demand for human resources services and the competition in these markets will be lower than in European markets.

Market channels and marketing methods

The best way to enter the market is by using local sales agents or intermediaries rather than approaching end-user companies directly. Subcontracting by European human resources service providers is a good and realistic market entry channel for Senegalese and Ugandan service providers. These local service providers know the local market well and already have a buyer network. The same applies to intermediaries. They know the market well too and will increase the chances of finding potential customers.

When targeting customers in your own local markets, Ugandan and Senegalese service providers can still consider using a sales agent or intermediary, but due to the geographical proximity, direct selling is also an option.

Competitive advantages and unique selling propositions

When developing a unique selling proposition, the needs and motivations of potential clients to outsource human resources services must be understood. It is also important to know what the potential advantages could be for companies to subcontract services to Senegalese or Ugandan service providers.

These advantages generally include common outsourcing benefits, such as lower costs and access to skilled labour, but additional motivations may also exist. Customers will seek partnerships that understand their need for a reliable and trusted partner that delivers on time and according to precise expectations. Highlighting points of your company that meet the exact needs of your target company will be beneficial in making you unique and stand out from competitors.

Additional competitive advantages and unique selling propositions will develop over time, as is the case for inbound marketing and contact centre services. It is important to exploit experiences through your promotional tools. Highlight successes and build a strong portfolio. This is the best way to show potential customers your unique capabilities and quality compared to your competitors. Process management certifications are another effective way to highlight your commitment to quality procedures and results.

What will also be helpful in building reputation is bundling the strengths of multiple companies in your country and working together through a local business support organisation or an association. By working together, you can increase your chances of developing the image of being a country renowned for human resources services. Your country reputation will be further enhanced if you combine your expertise, experiences and promotion budgets.

There are few countries or associations where companies currently combine efforts to enhance their country image. If you begin to do this, it will give you a competitive advantage and reduce your promotional costs, which will be shared with your local competitors.