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Annual Report 2019
ተሰጥዖ
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Index
1. Introduction
2. Overview
3. Outsourcing Sector in Ethiopia and Africa
4. Global Outsourcing Sector
5. Technology
6. Milestones
7. Sustainability
8. Conclusion
Ethiopian Parliament meets to discuss 2019/2020 budget.
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1. Introduction
The United Nations Department of Economic and Social Affairs (UN DESA) projects that the world’s 10 fastest growing cities, between 2020 and 2035, will all be in Africa. Ethiopia’s economy grew by 8% last Ethiopian fiscal year, which ended on 7th July. Foreign investment continues to pour in and services is the most promising employment sector of all. Dr Abiy Ahmed’s new government and regime has opened up this country making it an attractive destination for well-known Western brands such as Heineken and Pizza Hut. Ethiopia is one of the least corrupt bureaucracies in Africa and with a more liberal attitude towards business; has become the most exciting emerging market economy in the world.
Dr Abiy Ahmed – Prime Minister & Nobel Peace Prize Winner.
Even more valuable than Ethiopia’s natural resources, are its people. As the only African nation to remain independent from colonial rule, there is a sense of pride and ambition here like nowhere else. Last June, World Bank officials approved $175 million credit in support of Ethiopia’s effort to create more jobs and improve competitiveness. Although mainly geared towards industrial parks, it just goes to show how fast employment is increasing in a country of almost 110 million citizens. Infrastructure investments are beginning to bear fruit and the provision of public services such as education and health have increased dramatically. As a result, Ethiopia’s population is enjoying welfare gains and moving closer towards becoming a middle-income nation. “My economic model is capitalism,” says Dr Abiy Ahmed.
Ethiopia has recently focused on improving quality of service and competitiveness across a number of state-owned and largely monopolised sectors. Ethio Telecom and the Ethiopian Sugar Corporation are two companies currently being privatised with others in the pipeline including Shipping/Logistics and Ethiopian Electric Power. It has been a long process but swift actions are being taken to transform this once socialist country into the competitive nation it aims to be. Now is a good time because new policies mark a break with the previous administration who wanted control over every major industry in operation. Foreign investment not only stimulates growth but also improves Forex shortages. Consequences of private sector participation always result in a higher inflow of capital and it will be interesting to monitor how the economy improves further throughout 2020.
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2. Overview
GDP - £72.5 billion
GDP Growth – 8%
National budget - £10.5 billion
Revenue from state enterprise - £7.24 billion
Population – 112.08 million
Q1
Successful start to the year for Ethiopian Airlines as they add a number of new destinations to the rota including Marseille, Manchester and Turkey. The company are awarded “African Champion of the Year” and open a 5 star luxury hotel located 10 minutes from Bole Airport. Ethiopia’s travel industry is reported to have grown 48.6% in 2018 – highest worldwide. A number of large corporations established factories at the start of 2019. In February, South Korean company Hyundai opened a vehicle assembly plant with capacity to build 10,000 cars a year and employ 1,000 people. Germany’s Volkswagen also signed an MoU with the Ethiopia government to build a plant here and Unilever unveiled their world-class oral care factory in Dukem. Kangaroo Plast PLC invested $52.5 million in a brewery with capacity for 1.6 million hectolitres a year and 230 jobs. German industrial manufacturing company, Siemens, sign an MoU to boost infrastructure with future projects, financing and training of Ethiopian technicians. They also agreed to assist extend the national grid and find energy solutions for remote villages. Huajian Group announced plans in February to open a world class industrial city – part of a 2011 pledge to spend $2 billion in Ethiopia and see its own exports reach $4 billion. KFC also opened up in Addis Ababa, similar to Pizza Hut in 2018.
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Pizza Hut opens first restaurant in Addis Ababa. WWW.TESETEO.COM
Q2
President of the World Bank Group, David Malpass, visited Dr Abiy Ahmed to express his support of the ongoing reform. Reports confirmed tourism in Ethiopia supports 2.2 million jobs and is growing. Japanese automotive company Isuzu Motors sign an MoU with the government to open a factory and Coca Cola released a video campaign promoting Ethiopia as an attractive investment destination. New companies entering the market include Pinehilu Akabia Foods (£40 million), Zhonglong (£22.5 million), Fit Holdings (£8 million) and a joint venture/deal with Saudi Arabia for oil/gas (£80 million). A study about industrial park wages revealed some people are being paid as little as $26 a month. The government met to discuss new labour laws and the possibility of implementing a minimum wage. A new 250km highway funded by the UAE continues to be constructed and once complete it will link Djibouti with Ethiopia lowering travel time while increasing trade by 30%. German football club Bayern Munich opened its 6th global football academy in Addis Ababa. Sugar factories across the country were put up for privatisation and tier 1 Telco companies such as Duetsche, Vodafone and MTN all expressed interest to bid for equity in Ethio Telecom.
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Q3
Ethio Telecom appoints KPMG as privatisation advisor. This involves splitting the company into two wings – service provider and infrastructure developer. Whichever company successfully bids for 49% can benefit from both as it will remain one company. They also reported a profit of £640 million for the year. In July, Ethiopian nationals and expats joined forces to plant over 353 million trees in one day. The country has been suffering from frequent droughts over previous decades so work like this contributes massively towards lowering national and global emissions. Hansa Flowers invested over £200,000 in a brand new school and South Korean Steel Manufacturing company, EKOS, inaugurated the Dukem Health Centre. The Ethiopian Ministry of Finance and EU pledged 45 million Euros to create 400,000 new jobs whilst Deputy Mayor of Addis Ababa, Takele Umma, gave free school uniforms and utensils to over 600,000 disadvantaged school children. In business law, probation for employees is now 60 days not 45 days, maternity leave has been extended and annual leave moves up from 14 working days in year one to 16. Tax collection was £6.9 billion - £586 million higher than 2017/2018. Dr Abiy Ahmed won the Nobel Peace Prize for making peace with Eritrea and improving Ethiopia since coming to office.
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Q4
Eight political parties signed to join a new Prosperity Party - it will serve as a springboard to continue transforming Ethiopia - using knowledge and truth as guiding principles. Ethiopian Airlines launched an innovative capacity development initiative aimed at creating local value in agricultural products. Tax income of Dukem, an industrial hub in Ethiopia, almost quadrupled from it was five years ago, said officials of the town. Ethiopia’s town of Batu which is known for its Lake Zway invited both foreign and local investors to open lodges there. The International Finance Corporation (IFC), a member of World Bank Group, announced a €20 million investment in Soufflet Malt Ethiopia. The Ethiopian government announced it aims to facilitate the creation of twenty million jobs in different sectors over ten years. Germany committed 352.5 million Euros to the country for strengthening industrial parks, improving tax systems and enhancing the investment climate. Coca-Cola brought sugar free products to consumers in Ethiopia for the first time. With the aim of selling its products online, the government of Ethiopia and Alibaba’s Co-founder Jack Ma sign a deal. Sidama zone became the 10th region of Ethiopia after referendum. Ethiopian Telecom Regulators met investors and there was new interest for equity from Huawei.
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Ethiopia sign agreement with Alibaba Group.
Teseteo, which means “gifted” in Amharic, is a Customer Experience and KPO company in Addis Ababa. Cost
effective, offshored solutions include AI blended CX, technical support and knowledge process outsourcing. We support Sustainable Development Goal 8 and have a
strong ESG Agenda in place – www.teseteo.com
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3. Outsourcing Sector in Ethiopia and Africa
In Ethiopia many workers are moving out of agriculture into services. Along with expansion of infrastructure, the services sector is responsible for continued vibrancy in urban centres such as Addis Ababa. Further industrialisation and growth here is key to economic improvements. Until now, outsourcing and the benefits it can bring have been undervalued. The industry currently contributes 9% of annual GDP growth in the Philippines and can do the same for Ethiopia, while considerably improving Forex shortages. Addis Ababa has a strong university network, high level of English and 70% of its population are under 30. Still, urban youth unemployment is 19.1% and more than a quarter of existing jobs are informal. These often provide limited working conditions such as low pay and irregular/long hours. Two million people enter the jobs market each year so the country faces a daunting prospect of building sustainable and inclusive employment for all. Job creation is now the critical development challenge which raises importance of the private sector. If productive work can be created (i.e. outsourcing) the youth here can become a dynamic force.
Youth unemployment in Ethiopia is high (%).
This year Bayern Munich Football Club opened their sixth global Academy in Addis Ababa. It follows a long string of European companies coming here and further validates how much talent the country has to offer. English is widely spoken to a high level with German and French being taught at a number of universities/schools. Graduates holding a degree in engineering, technology, telecoms and science are also readily available. Many qualified people remain in unskilled work or public sector roles. For decades Ethiopia’s government has had uppermost control over major industries (i.e. telecoms, aerospace, finance). Privatisation is starting to take place and ease of doing business has improved. FDI is now welcomed in key sectors to increase competition and enhance efficiency. There are many advantages to running a company here such as inexpensive labour, improved infrastructure, cheap power and preferential market access to the EU/US. Ethiopia’s services exports are higher than those of countries at similar levels of development – and this can include outsourcing. Industrial parks are creating jobs but the government needs to look past just manufacturing to confront employment challenges ahead. WWW.TESETEO.COM
In 2015, government officials put together the Addis Ababa Action Agenda to address UN Sustainable Development Goals (SDGs). Similar to my company Teseteo, it promotes inclusive economic growth and embraces the ESG (environmental, social, governance) framework. The agenda backs projects with the greatest potential for promoting employment and decent work. As an outsourcing business, Teseteo carefully considered which factors are most important to our ESG Agenda using research from MSCI as a benchmark. Because we support SDG8 (Decent Work & Economic Growth) – issues the team cares about are job creation, education, fair pay, industry innovation/infrastructure and gender equality. Teseteo are proud of sustainable, environmentally friendly offices and encourage all staff to recycle + conserve energy. Our Governance strategy has put transparency as number one priority as we should be open about performance going forward (both financial and non-financial). Impact sourcing is an area we take great interest in because it involves employing high potential people through outsourcing. The company also helps out and supports Asra Hawariat School.
Asra Hawariat School in Addis Ababa.
The Ministry of Labour and Social Affairs (MOLSA) exists in Ethiopia to create productive employment and decent work for all. In 2017 they released a National Employment Policy to alleviate unemployment, promote equal opportunities, eradicate poverty and address labour related issues. A National Employment Council (NEC) evaluates and monitors implementation of the policy at all levels and it can serve as a useful guide for employers here. MOLSA publish good information about the jobs market in Ethiopia and prioritise employment of graduates. Companies like Teseteo and the outsourcing industry creates opportunities for these people but more importantly, it does so at scale. For instance, American firm Sykes entered Costa Rica in 1999 and within a decade were employing over 4,500. Similarly, Indian firm Sutherland opened up in Jamaica just three years ago and now has 2,000. If Ethiopia is to become an outsourcing hub – scale is key and companies should aim to be employing thousands not hundreds. My company has an ambitious but realistic headcount forecast of 2,000 in 8 years. We already have key relationships with large European BPOs and Addis Ababa University (AAU) is fully behind us as recruitment partner.
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AAU.
Teseteo strategically chose Ethiopia because of its continued growth and industrialisation. We work closely with public and private sector organisations to ensure the necessary resources are available at all times. Our partnerships span beyond just Addis Ababa University because here companies should be favoured and liked by various government bodies/ministries. Ethio Telecom and the Ethiopian Investment Commission (EIC) are both involved and we also have key contacts at Ethiopian Airlines. Our recruitment is managed by Yihenew Wondie, previous Head Registrar at Addis Ababa Institute of Technology and Assistant Professor. Teseteo has both Ethiopian and European board members with the experience and know-how to find solutions + deal with problems when they happen. For instance, Solomon Gebremariam looks after procurement and supply chain management. He has years of experience negotiating sales, contracts and agreements in Addis Ababa. Having natives like this on our team is important because they know how best to navigate the culture and market. They can cut costs, manage Forex and find best value where it matters. Ethiopia is a strong destination for outsourcing, but time should be taken first putting the right infrastructure and governance in place to ensure success.
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Top outsourcing destinations in Africa
South Africa
Population – 56.72 million
Universities – 26
South Africa has established itself as a lucrative outsourcing hub and has a reputation for strong quality of service. Factors that make this destination a good location for BPO and knowledge process outsourcing are (i) increased Government support (ii) broadband capacity (iii) skills development and (iv) growing talent pools. In addition to Contact Centre, the most sought after service in South Africa is finance and audit. This accounts for 50% of the market. It has a number of strong universities but hiring educated staff is more expensive here than in other locations such as Ethiopia. South Africa’s government have incentives in place to boost the outsourcing sector and it currently employs 215,000 people.
Egypt
Population – 97.55 million
Universities – 20
It won “Outsourcing Destination of the Year” in 2016 at the GSAA awards. Since the early 2000’s, Egypt’s government have opened up the economy and services is seeing the most rapid growth. Currently ICT is the strongest sector and largest contributor to GDP. Egypt has a big population with 400,000 plus annual graduates from 20 universities and 100 vocational institutes. According to CIO estimates, the BPO/KPO sector currently makes up 4.1% of GDP and has increased by 7.5% since 2015. Companies operating here include IBM, HSBC and Nestle. While Contact Centre accounts for the bulk of business; new revenue streams include ITO, research and data-driven operations. Similar to Ethiopia, Egypt has an ICT Park.
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Madagascar
Population – 25.57 million
Universities – 6
The reason companies are flocking to Madagascar is a combination of cost and quality. The level of French is very good and their time difference is also minimal to Europe (one hour in summer, two in the winter). Madagascar has fast internet which is a pre-requisite for good quality calls and real-time services. Data entry and computer data processing services are most in demand and jobs range from simple entry to more sophisticated football analysis. 75% of Madagascar’s population live on less than $1.90 a day so the outsourcing industry here has been welcomed. There is no shortage of labour, but there is a lack of skills which can be an issue when hiring people for more complicated KPO work such as engineering.
Kenya
Population – 49.7 million
Universities – 22
Kenya has seen significant changes in the past decade which are the driving force behind its economic growth. Kenya’s first call centre was founded in 2005 and like Egypt, this service accounts for the majority of BPO revenue. Kenya offers an abundance of human resources. The majority of its population (approx 52 %) is between the ages of 15 and 54. Similar to Ethiopia, students have good communication skills which can be a stepping stone for them to work in the industry. Kenya’s Vision for 2030 was launched in 2008 and aims to transform it into an industrialising, middle-income country. Infrastructural developments include the planned construction of a BPO Park called Konza Tech City with superior power and telco.
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Ethiopia
Population – 112.08 million
Universities – 50 and over 1,300 Technical and Vocational institutes.
Ethiopia maintained its place as the fastest growing African economy in 2019 (8%) and ease of doing business is getting rapidly better for foreign investors. Engineering and technology are top priorities for this country so companies offering this type of BPO or KPO service are welcomed. The Addis Ababa Institute of Technology (AAiT) has 4,500 graduates every year - not to mention other departments within AAU. The construction of a new (almost finished) ICT Village in Bole Lemi offers a well-developed, easy to access space where firms can operate from. Infrastructure has improved drastically and the government now offers a number of incentives to ensure companies can operate seamlessly 24/7, 365 days a year.
Ease of doing business: Government continues to modify policies in favour of foreign investors. Ethiopia is a signatory of Bilateral Investment Promotion & Protection Treaties with 30 countries (including the UK) and has a strong support network of Government-owned and private consultancies (such as Grant Thornton).
Location: Addis Ababa is a regional hub and home to key international organisations such as the African Union and UN. Ethiopian Airlines is the largest on the continent and consistently voted best service-provider. They currently fly to 16 destinations in Europe and 7 in America.
Infrastructure: Huge investments over the last decade including roads (33,297 km), railways (5,000 km), airports, energy (solar, hydro) and Industrial Parks (such as the Ethio ICT Vilage in Bole Lemi – 5 work zones over 200 hectares of land with reliable power supply and WiFi).
Politics: Government has embraced the privatisation of state-owned businesses such as Ethio Telecom, Ethiopian Electric Power, the Shipping/Logistics Enterprise, Ethiopian Airlines and Sugar Corporation. Prime Minister Abiy Ahmed openly describes his economic/political agenda as “capitalism” and the country fully supports FDI.
Tax: Registering and filing returns have been made consistently easier to do and can now be completed electronically. Government organisations such as the Ethiopian Investment Commission and private advisory firms like Grant Thornton or Healy Consultants are on hand to ensure payments are minimised and made timely. WWW.TESETEO.COM
4. Global Outsourcing Sector
According to information published by Reuters, the global BPO market is currently valued at around USD 30 billion and that will increase to USD 52 billion by 2027.
Outsourcing trends into 2020
Automation and AI:
The Global Outsourcing sector is changing quickly mainly due to continued advancements in technology. Quantum computing and artificial intelligence have the potential to impact the BPO industry in many ways. It can improve the efficiency of data processing and transaction settlement. Many firms are now applying AI to regulatory compliance tasks in an effort to reduce costs and increase transparency. Industry experts predict this trend will continue well into the future. Natural language processing and chatbots are being used more and more in contact centres to enhance, and speed up customer service. This doesn’t eradicate the need for live agents - but it will allow them to focus on higher value transactions where qualities such as technical knowledge or empathy are demanded. Whatever its specific use – AI is making inroads everywhere. From using algorithms within analytics to utilising smart technology for the production of CAD designs - automation and AI are here to stay.
Workforce development & Up-skilling:
Work-based learning opportunities and the promotion of alternative pathways into education are becoming more prominent within outsourcing today. This is something we put great emphasis on at Teseteo and encourage our staff to continue learning past their degree (especially within engineering and technology). It is a win-win for employers because they are increasing the capacity and capability of their workforce. Educational programs to re-skill and up-skill employees are also great to adapt and teach staff about new AI/automation technologies. As this type of tech gets better, the outsourcing industry’s employment growth will mostly come from higher complexity work such as KPO. Smaller businesses and start-ups have the perfect opportunity to optimise and streamline their workforce in-line with AI/automation. Taking on graduates with a good degree and keeping them engaged in that particular subject is an effective way to ensure future value.
AI/automation from the likes of Google Cloud can save time and money. WWW.TESETEO.COM
Cloud computing:
Cloud computing continues to make waves within business and knowledge process outsourcing. Small companies and start-ups have benefited the most as they now have access to larger computing resources they could never have afforded before. Acquiring the right SaaS provider is necessary to achieve significant results in terms of improved business processes and value chain engagement. Cloud computing allows for speed and efficiency; eradicating the need to have bulky, power-consuming hardware. Cloud computing within outsourcing provides quick results and work-progress can now be monitored or tracked in real-time. BPO/KPO firms will only survive if their processes are supported and executed through this technology. As more and more enterprises choose a cloud-based model, third party providers must implement the correct technologies into their organisation (including AI/automation) so they keep up with modern times and offer the best service to clients.
Omni-channel approach:
Outsourcing companies operating within CX (customer experience) must now offer an omni- channel service fusing voice, email, web, social media and ecommerce. Many SaaS providers in the space already provide this but it is important to know which has the best package, at the best price and which offers the most innovation. Companies such as Connex One allow their clients to engage with customers using various channels. The tech has contact points which gather/process relevant data to execute more effective campaigns. Predictive routing (a form of AI) pairs customers with ideal agents faster and this saves on hold time + enhances brand loyalty. It also improves first contact resolution, boosts sales and makes staff a lot happier because they are dealing with issues they know about. By using an omni- channel platform, customers can speak to companies faster through whichever channel they choose – whether that be making calls, Facebook Messenger or sending a simple text.
New destinations:
As salaries continue to rise and quality often falls across traditional outsourcing locations – decision makers are looking elsewhere for the talent they need at a cost they want to pay. Africa has become more attractive as a location for the business and knowledge process outsourcing industry. In 2019, Bulgaria, Romania, Egypt, Mexico and Columbia were the strongest new destinations for BPO and KPO firms. That being said; fast-growing economies, developing IT infrastructure and inexpensive labour throughout sub-Saharan Africa are luring multinationals to countries such as Kenya and Ethiopia. In 2019, South Africa was top performing here but the level of sophisticated work (like engineering) is reasonably low. For more advanced KPO assignments, companies must look towards places like Ethiopia that have a strong university network and impressive level of English. This year the biggest operators in Africa were Accenture, IBM, Capgemini, Infosys, Cognizant and HCL.
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Acquisitions in 2019
January 2019 – Las Vegas based Surge Holdings acquired 40% of El-Salvadorian nearshore BPO Centercom Global. Although the amount paid was undisclosed, Surge reported revenues of £3.8 million in Q3 alone and much of that is thanks to this partnership. Centercom has a strong bi-lingual offering and supports Surge Holdings with sales, CX, graphic design, database programming, software development and revenue assurance.
February 2019 – Private equity firm AION Capital Partners bought Indian BPO InterGlobe Technologies for around £178 million. The company manage back-end IT-related tasks assisting customers in the aviation, travel and hospitality industry. InterGlobe serves over 60 clients split between BPO/KPO and tech. Also known as IGT; it has a contact centre, employs over 11,000 people globally and offers AI products such as chatbots/automation.
March 2019 – London’s Intermediate Capital Group (ICG) acquired 100% of Konecta Group - a leader in the Spanish-speaking CX/BPO market. It exceeded £710 million turnover in 2018 and operates from 10 countries. The company has been constantly growing since its inception almost 20 years ago and now has over 65 contact centres worldwide. Konecta operates from 3 continents offering smart, omni-channel solutions for a number of sectors.
April 2019 – Indian BPO Quess Corp (292,872 employees) acquired Allsec Technologies; a company with offices in the US, UK, the Philippines and India providing services such as SEO, contact centre and quality management. Their 61% stake cost £29.14 million and will be followed up with an additional offer for 26%. Allsec was founded in 1998 and has a strong stance on Artificial Intelligence. It works in banking, insurance, healthcare, telco and retail.
Mr José María Pacheco (left) Founder of Konecta.
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September 2019 – M+Group (one of the largest BPOs in Eastern Europe) acquired Serbian contact centre Trizma for £1.9 million. That price can increase by another £525,000 depending on final results of 2019. M+Group now does business in six locations across four countries - Slovenia, Croatia, Bosnia and Serbia. The acquisition means it will employ more than 2,700 people and have a portfolio of 150 clients. Trizma was established in 2002.
Trizma were the first BPO in Serbia.
September 2019 – Indian Global Investment firm New Mountain Capital (over $20 billion in assets) acquired American-based Healthcare BPO/KPO emids. The company’s services include electronic health record (EHR), application management, analytics, data integration and governance. emids have a strong KPO offering across design, migration, QA and testing. In 2017, emids themselves acquired Encore Health bringing their total employees to 1,500.
October 2019 – Indian IT consulting firm Infosys acquired Irish contact centre Eishtec for undisclosed amount. The merger provides Infosys with an opportunity to grow in Ireland as the company already employs 1,400 people and they share a number of their clients. Established in 2012, Eishtec are a tech-savvy, omni-channel BPO with strong emphasis on AI/automation. It has branches in Waterford, Wexford, Clonmel, Craigavon and N’ Ireland.
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5. Technology
The fourth industrial revolution signals a critical juncture for Workforce Planning. While some fear a labour arbitrage between human resources and robotics, the need to define and develop digital, engineering and technical skills cannot be delayed. Within the BPO/KPO industry, there is a gradual move towards high-end services – Deloitte
The continued support of Addis Ababa University and the Addis Ababa Institute of Technology is key to our growth. Head of Recruitment, Professor Yihenew Wondie, has access to the best engineering and technical graduates on campus. Our KPO offering is currently within Telecoms, but we have human capital available for other disciplines such as AI, mechanical, software development, electrical and chemical.
AI/automation within Contact Centre
Google, Amazon and IBM are making strong headway here along with the top SaaS providers such as Connex One, Five9, Puzzel and Genesys. Using modern AI technologies can work out expensive, so companies must look at cost – long and short term. Investing in the right system could be pricey to begin with but pay off further down the line. Contact Centres need to re-think their recruitment processes and hire people with specialist skills (like engineering) that can be deployed elsewhere if (or when) AI has the ability to do their job! There are two main types of AI/automation in a call centre – Virtual Agent (VA) and Agent Assist (AA). VA technology is becoming more advanced and can now identify key phrases, content, tone of voice etc. When looking into this type of technology it is good to use Google, Amazon and IBM as benchmarks because if they haven’t yet developed it they will – or acquire a tech company that has. AA involves making an agent’s life easier by providing information relevant to a conversation in real time and text to speech transcription. Another form of Agent Assist is predictive routing which matches customers to ideal agents. This means brand loyalty, first contact resolution, low customer churn and higher sales. It also makes staff a lot happier because they are resolving issues they know about.
Click here to find out how we use AI. WWW.TESETEO.COM
AI/automation within Technical Support
Virtual Agents are a long way from resolving the more complicated technical issues via phone, email or messenger - but they can be used for simple or repetitive questions. In technical support, companies can work alongside their SaaS provider to blend AI with real staff. By working out which tasks take up most time, it is then possible to implement automation where needed. This can be anything from initial easy support requests, filling out error logs or supplying specific troubleshooting details. Human agents should always be on hand to look after more advanced requests. Through monitoring queries that are asked over and over again – patterns can be found and then resolved through automation. In this instance, mundane work is taken care of leaving real agents to look after questions that require specialist knowledge. For that reason, Teseteo hire graduates who have an engineering or technical degree and make sure they stay active in that chosen subject. We monitor their work for quality and innovation. This means staff can be deployed to more sophisticated technical support and KPO when there is demand. Google, Amazon and IBM all offer strong solutions here along with Connex One, Five9, Puzzel and Genesys. Predictive routing is especially relevant because customers can easily be directed to correct specialists.
AI/automation within Data Entry
Let’s face it, data entry is a pretty mundane thing to do but thankfully a number of new technologies are available that can cut costs on manpower and speed up simple, repetitive jobs. Some tasks such as CV formatting still need a human touch, but with software such as Grammarly – that too can be made a lot easier. Similar to AI in the contact centre/technical support; Google, Amazon and IBM all offer data entry solutions. They are always a safe bet, even if sometimes slightly expensive. Other tech companies worth mentioning around AI/automation within data entry are Xtracta and DocAcquire. The benefits of using AI and automation in this line of work are (i) improved employee satisfaction, (ii) reduced errors, (iii) reduced costs and (iv) faster turnaround. When choosing SaaS here it is important to weigh up cost vs quality and also ability to integrate with existing software. Paying a bit more for a premium service with the likes of IBM could be worth it in the long-run, especially if a company is cutting back on expensive wages for repetitive tasks. Simple AI within data entry can take care of the entry itself, validation of information, classification of information, validation of data and OCR which stands for optical character recognition. More sophisticated AI analyses the data for trends that can be used in decision making.
Xtracta provide AI solutions around data entry. WWW.TESETEO.COM
AI/automation within Analytics
Machine learning within analytics is necessary to find data patterns a human couldn’t, or if they could – would take a very long time! Google, Amazon and IBM lead the way here and through the cloud have capabilities to analyse information collated from data entry work and even Contact Centre activities. The good thing about using these companies is their ability to integrate with almost any SaaS or system in use. DocAcquire and Xtracta also offer AI/automation to assist analytics. Machine learning can make assumptions, test and learn autonomously. This technology even answers questions quickly such as “Which channel has the highest goal conversion rate?”. Automated insights provide users with information around changes or opportunities they would have previously missed. Those who do not adopt AI won’t be able to compete effectively as it will significantly disrupt every industry – especially within analytics. Applying AI algorithms to insights from chatbots, e-commerce and other sources elevate customer experience. Advanced applications for enterprise resource planning (ERP), customer relationship management (CRM) and other mission-critical functions are more common now than ever. Contact Centre SaaS brands such as Connex One do have capabilities, but the main factors to look at are integration and cost.
AI/ automation within Telecoms
Telecom operators are embracing new tech such as AI to stay competitive and meet customer demands. Optimised networks, exceptional CX, and fraud protection are some of the benefits it can bring. Systems significantly optimise key aspects of a network and eliminate the need for manual/repetitive tasks. It monitors networks for performance and can disclose errors, detect causes + inform operators. Furthermore, algorithms safeguard from traffic overload with the help of Network Function Virtualization (NFV) eliminating the need for custom hardware and running new services on top of standard servers. AI is also able to funnel traffic through virtual machines without any human engagement. Automation can massively improve network performance but also detect for fraud and cyber crime. According to a Capgemini report, telecom firms are most vulnerable to suffer from large financial losses due to breaches in their systems. Machine learning determines unknown network traffic patterns, blind spots and detects potential threats. It significantly improves network transparency and instantly identifies anomalies - which will most likely end up as cyber scams. Overall, Artificial Intelligence has potential to reshape the telecommunications industry and provide a myriad of advantages for its enterprises globally.
Click here to find out about our KPO in Telecoms. WWW.TESETEO.COM
AI/automation within Engineering
IBM by far offers the best engineering solutions out of the big three and these extend to AI/automation. Leading-edge products include design, development, testing/analysis, mechanical engineering, power subsystems, acoustics, electromagnetic compatibility and cooling. They have state-of-the-art laboratories and personnel in the United States, Europe and emerging market countries. Within mechanical engineering, IBM use Design Automation tools (a form of AI) to address tough challenges and create highly reliable, serviceable products. They also work in software, electrical and even chemical engineering. Of course, there are many more niche systems available on the market and specialists should know about those. For instance, companies are in the process of creating smart machines that can work in factories or assembly plants and eradicate the need for manual/repetitive labour. Oracle is another company with strong engineering capabilities + all their SaaS can be accessed and managed via the cloud. AI/automation will be more prominent within every area of engineering over coming years – there will especially be demand for those who can engineer and build the AI/automation products themselves.
Conclusion
AI/automation will bring many improvements to the services sector over coming years so it is important to keep an eye on what’s new. Google, Amazon, IBM, Oracle and Microsoft are always a good benchmark when looking at the latest products on offer. They may be more expensive, but the good thing about using them is quality of service and an ability to integrate. Specialists within specific areas will know the best niche SaaS available. Currently, the most useful use of AI/automation is to eliminate repetitive and mundane activities like simple data entry or easy Contact Centre enquiries. It allows agents and staff to focus their efforts on more technical assignments or those that involve problem solving and empathy. Smart AI should be blended with smart agents to streamline client’s business processes and cut costs. New outsourcing companies and start-ups are in a great position to scale with automation and start using it now. As one example, Teseteo currently have a member of staff working on CV formatting. He has a degree in computer science and is researching how certain technologies could potentially help him with that work. We consult clients on the best way AI can increase ROI. Through proactive monitoring Teseteo reports back on the success of blended AI across each channel so clients know what benefits they are getting.
Through our partnerships (including Addis Ababa University), Teseteo has access to some of the best
engineering and technical graduates in Ethiopia. Comprehensive training gives staff first-hand experience
of the products and assignments they are supporting from day one – www.teseteo.com
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6. Milestones
Aug 18 – Teseteo.com goes live thanks to great work from our lead designer, Ben Bush.
Sep 18 – Two weeks in Addis Ababa visiting associates and promoting the brand.
Oct 18 – Attend OSX Summit and recruit an experienced Senior Executive as our Outsourcing Advisor.
Nov 18 – Form partnerships with British African Business Alliance, MDY Legal and Global Impact Sourcing Coalition.
Dec 18 – Form partnerships with Addis Ababa University, Institute of Technology and Recruit Professor Yihenew Wondie.
Jan to Mar 19 – Begin business development and gain client interest from a number of British and European clients.
Apr 19 – Organise meetings in Addis Ababa including ICT Village, Ethiopian Airlines and AAiT.
May 19 – Spend 5 weeks in Addis Ababa. Meet with CEO of Ethio ICT Village and Head of Global Call Centre for Ethiopian Airlines.
Jun to Oct 19 – Form Teseteo as limited company in the UK and take business proposal to market. Win first paying client.
Nov to Dec 19 –6 weeks in Addis. First full time employee starts, fresh order for agents in 2020 and start working with Private Investors.
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7. Sustainability
ESG stands for Environmental, Social, Governance - key areas in which companies must act to protect the natural world, ensure social progress and improve organisational governance. Investors can use ESG analysis when assessing the sustainability and ethical impact of a business, but many haven't fully integrated it into their decision-making process. Deutsche Bank has an impressive ESG agenda and offer it as part of their service - aligning each customer’s portfolio with different values, aims and interests. They recently enhanced strategy around ESG and have adopted a ratings system from MSCI, global provider of analysis tools, offering clients valuable information about factors such as carbon emissions/water usage (environmental), job creation/employee development (social) and business ethics/tax transparency (governance). There are a number of other ways we can look at ESG such as CDC Toolkit - a free practical guide for responsible investors in emerging markets and also a-DIG (Deutsche Bank product) which is an interactive web tool that quantifies the value of non-financial information. The Global Sustainability Investment Alliance is a collaboration of membership-based sustainable investment organisations and they publish useful info as well.
Ethiopia is one country taking positive steps towards sustainability; from the recycling of beer bottles in Addis Ababa on a small scale, to its broader anti-corruption agenda and job creation strategy. Companies or people involved in emerging markets like this should put even more emphasis on ESGs. Impact investing generates measurable results around environmental, social, governance - while also bringing a financial return. Usually, VCs have two other ESG categories they use when considering a project or new business. Exclusionary screening is simply avoiding companies and sectors that do not align with their values (i.e. fossil fuel or animal testing). Thematic investment focuses on opportunities around one specific ESG point such as clean energy (E), job creation (S) or business ethics (G). When responsibly investing for clients, bankers concentrate on asset classes such as equities, fixed income, funds and also alternatives. Early stage companies and startups raising capital have many options available. As just one example, GIF (Global Innovation Fund) invest in social innovations that improve the lives of people in developing countries. Of course, any new business should be financially viable, but those that give back to communities in one way or another are often favoured.
WWW.TESETEO.COM
Teseteo supports Sustainable Development Goal 8 through the employment of high potential Ethiopians. A recent study by the Business and Sustainable Development Commission said achieving SDGs could create opportunities worth $12 trillion by 2030. It has been insightful looking at what competitors in the outsourcing industry have been doing to improve CSV and assess ESG. Companies like Capita and Sykes employ thousands of people through outsourcing and both put a lot of attention on sustainability. Capita have a strong Corporate Responsibility Strategy and dedicated committee who report on an annual basis to the Board about ESG commitments. They work collaboratively with partners amplifying client’s own agendas globally. For instance, in South Africa, Capita have teamed up with Marks & Spencer supporting local schools, providing equipment and uniforms. Teseteo has a similar relationship with Asra Hawariat School in Addis Ababa and we are developing a partnership by encouraging donations. In the UK, Capita volunteer at charities such as Pursuing Independent Paths and raised £853,000 recently for The Prince’s Trust. After engaging stakeholders, they have identified 25 issues around ESG.
Capita's 25 ESG points. Capita work collaboratively with clients to tackle socio-economic concerns and also help local communities, mainly in the UK. Over a 5 year period they have already delivered a wider social value of £2.75 million, placed 102 apprenticeships, supported 45 young offenders and educated 180 students on how they can steer clear of crime. These are all strong Social (S) achievements and can be emulated by other companies - whatever size, sector or location. Capita manage their Environmental (E) impact by reducing carbon footprints and using resources wisely which delivers sustainable services. Across 2018, Capita minimised emissions by 11% while putting in place energy reduction projects and delivering workshops for their facility managers. Governance (G) management at the WWW.TESETEO.COM company concerns a number of issues including corruption for which it has zero tolerance and a dedicated Risk Team monitoring compliance against the Anti-Bribery/Corruption Standard. Capita’s Corporate Responsibility Team is chaired by the CFO and is responsible for implementing strategy, developing appropriate policies, providing guidance as well as sharing best practice. Capita are very transparent about business performance and what their directors get paid - which is all recorded in the annual report. Overall, this company are running a sustainable, responsible business and have predicted profits of £295 million before tax this year (2019).
Sykes are an American BPO company with CSV as a top priority. Global Community Involvement is an initiative from them adding social value around various locations including India, Costa Rica, the Philippines and USA itself. Sykes partner with communities offering education, employee relief funds, crisis centres and lunches honouring service men/women. Staff here act as good stewards towards the environment - actively participating in recycling, energy conservation and awareness programs. Sykes strive to be the best supply chain partner possible by recording and reporting data about sustainability value drivers. They also make sure supply chain partners participate in similar efforts by adhering with their code of conduct. In 2015, Sykes were awarded a Sustany Foundation Award recognising for-profit businesses in the Tampa Bay area engaged in practices that advance the interests of People, Planet and Profit. “If our collective community and corporations could come together and meet every need, it would be quite an aspiration,” said Chuck Sykes, CEO. “There is a lot of need, but there are also many great opportunities. If we act within our individual capacities or those of our corporations, I believe we can do it.”
A number of online platforms are available for companies where they can monitor their own ESG ratings, and also view the performance of others. a-Dig is an interactive tool from Deutsche Bank that quantifies the value of non-financial information - especially around sustainability. It covers more than 5,000 firms globally, uses Artificial Intelligence/Natural Language Processing, identifies ‘hidden’ red flags in Regulatory Filings and helps responsible investors make better decisions. MSCI is a global provider of equity, fixed income, hedge fund, stock market indexes, and multi-asset portfolio analysis tools. It is trusted by Deutsche Bank for the monitoring of ESG performance and is aimed at asset managers, wealth managers and banks. The platform has regular whitepapers, podcasts, ESG analytics, ESG indexes and climate change solutions. British company, EcoVadis, provide business sustainability ratings and are used by Sykes. Whether companies want to improve their own practises or the performance of a supply chain - EcoVadis can reduce risks, cut costs and uncover new partnerships. Ratings on the platform help businesses benchmark and drive improvements across 71 criteria. Within this there are 4 themes (i) Environment (ii) Labour & Human Rights (iii) Ethics and (iv) Sustainable Procurement. It currently assesses performance across 150+ countries, 200+ industries and has tens of thousands of firms on the database.
WWW.TESETEO.COM
ESG factors from MSCI -
Here are some of the ways Teseteo is creating shared value (CSV) in the business:
Environmental (E) – always reducing our carbon footprint and working towards renewable energy sources. Invest and encourage good waste facilities – including food bins and the recycling of paper, metal, glass and plastic. Ensure light efficiency wherever possible with automatic switch-offs, LEDs and dimmers. Minimise printing – Teseteo aim to be a paperless, fully digital company. Minimise business travel. Procurement of sustainably sourced items – no plastic cutlery or straws and most important of all, education.
Social (S) – job creation for unemployed, high potential Ethiopian people. Target of 2,000 staff within 8 years. Close relationship with universities for direct access to graduates. School partnerships (such as Asra Hawariat) to encourage good education and skills from a grassroots level. Remuneration – competitive salary paid to all new starters. Innovating services in Ethiopia through outsourcing and work with government/private sector to boost infrastructure. Equal opportunities at our company no matter of gender, race or religious affiliation. WWW.TESETEO.COM
Governance (G) – transparency of accounts and company information with quarterly/annual reports. Diversity on the board – European and Ethiopian members. Risk management for both clients and shareholders. Competent leadership who have the right skills and industry knowledge. Continually evaluating board performance to identify weaknesses and improve decision making. Teseteo maintain a good working relationship with legal and government officials in the UK and Ethiopia itself – these include Addis Ababa University, Ethiopian Investment Commission, MDY Legal, Tadesse Kiros Law Office.
Three excellent sources for information around Sustainable Development + ESG are the Global Sustainable Investment Review (GSIR), Principles for Responsible Investment (UN) and Belgium’s SDG Charter. According to the GSIR, largest sustainable investment strategies globally continue to be negative or exclusionary screening with combined assets under management of $19.8 trillion. This is followed by ESG integration, which has grown 69 percent over the past two years, now standing at $17.5 trillion in assets. Since 2018, responsible investing has risen 18 percent in East Africa ($18.2 billion). Top sustainable investment themes for East Africa are agriculture, SMEs, health, energy, infrastructure and inclusive finance - all aligned with Sustainable Development Goals. Similar to CDC Toolkit, the Principles for Responsible Investment platform is full of useful information and data. It covers topics such as income inequality, employee relations, labour standards, tax avoidance and executive pay. The Belgian SDG Charter encourages private, civil and public sector parties to work in unison by crafting impactful solutions tackling global SDG challenges. Companies involved must make sustainable development an integral part of their core business, operations, budget and projects. The Belgian SDG Charter offers a number of useful guidelines aimed at private sector companies. These include - support and strengthen transparency/good governance, create decent work, protect labour standards, strive for low carbon economy with renewable energy, support local private sector and tax contribution.
Sustainable investing is becoming more prominent globally - especially as the world population continues to rise. ESG doesn’t mean compromising on returns because companies with high scores/ratings often provide better revenue streams in the long-run. Taking ESG factors into consideration can unlock value and has therefore become increasingly compelling. Understanding what values and goals matter most is the first step towards becoming more sustainable and attracting responsible customers/investors. Taking proactive measures around Environmental, Social and Governance issues will boost scores/ratings. Working with employees and supply chain members is another effective way to make sure they are doing their bit as well. Keeping an eye on the various platforms and guidelines mentioned in this piece of analysis means you will stay ahead of the game with relevant information and new opportunities. The Sykes Code of Conduct is useful to assess your own standards around sustainability - especially when dealing with suppliers.
WWW.TESETEO.COM
8. Conclusion
It was great to spend just over 3 months in Ethiopia this year and I’ve been satisfied to see Teseteo grow from what it was in January. Doing business here can be frustrating at times, but with some time and patience – the benefits are clear. Ethiopia is opening up more to FDI which is good because this country has a lot to offer in terms of manpower and skills. Economic growth remains consistent (8% in 2019) and there have been many exciting advancements over the last 12 months. Ethiopia has come far in recent times and is now home to prestigious European/US companies such as Volkswagen, PVH and Ericsson.
This year the Prime Minister Dr Abiy Ahmed won a Nobel Peace Prize for making peace with Eritrea as well as bringing about positive change in areas such as business, gender equality and sustainability. Addis Ababa is a chartered city and any political or religious unrest that does occur rarely reaches its walls. The Ethiopian Investment Commission and Ministry of Urban Development/Construction are two government offices that foreigners conducting business here must know about and keep track of. They publish regular information around topics such as employment law. Any company that comes to Ethiopia wishing to conduct honest business, pay tax and help out with Forex or unemployment is generally welcomed. This country needs the private sector to boost its economy and create jobs.
Teseteo have a focus on Telecom engineering and work with Professor Yihenew Wondie from the AAiT to recruit talent in that space. We are also keen to speak with those who have a degree in computer technology, mechanical engineering, data and science. Our business model is structured in such a way that new recruits stay active in their topic of interest. That way employees can be deployed to more sophisticated knowledge process outsourcing work (such as engineering) when there is demand.
The business and knowledge process outsourcing industry is small in Ethiopia and Teseteo are lucky enough to be operating alongside one of the best companies already here. This was a strategic decision as it is always good to learn and work with those on a similar path to you. Certain business activities need more attention to infrastructure than others - especially those that demand uninterrupted WiFi and electricity 365 days a year/24 hours a day. Investors that come here and deposit money usually have the privilege of being on a whitelist with Ethio Telecom. This means if and when the government decide to switch off internet (which they do from time to time), services remain consistent. Regarding electricity supply, if an office-block doesn’t already have one; it is vital to invest in a good, reliable generator with UPS (uninterrupted power supply). Telecoms is an exciting sector in Ethiopia, especially for private enterprises and startups. Recently, Nokia signed an MoU with the AAiT to train students on latest telecom technologies and industry trends which will further improve engineering talent pools available.
It has been enlightening and encouraging to witness such prestigious Western brands enter the East African market this year. As ease of doing business and infrastructure improves in Ethiopia, the services sector will flourish. Hopefully other European and American companies + private equity firms will follow suit and make 2020 even better.
Words – Ruari Phillips (Director of Teseteo).