Offshore Outsourcing: Kenya Shows Promise

With India's rising costs and employee turnover encouraging information technology executives to look beyond the subcontinent for offshore outsourcing providers, a country like Kenya could be poised to win more IT services business from abroad. The East African nation boasts a big pool of English-speaking professionals and its government has invested millions to improve its telecommunications infrastructure.

However, recent events have conspired to slow Kenya's growth potential in the near term.

Most dramatically, a disputed election at the end of 2007 ignited two months ethnic tensions and violence in the country, leaving hundreds of citizens dead and hundreds of thousands more displaced. In late February 2008, former United Nations Secretary General Kofi Annan negotiated a power-sharing deal between the two presidential candidates that established a coalition government. But uncertainty about the new government continues. "Kenya has a young democracy that will result in more growing pains," says Ralph Schonenbach, president of Zurich-based sourcing consultancy Trestle Group.

Geopolitical concerns are never good for IT services business. "Outsourcing has risks, offshore outsourcing even more, offshore destinations with political instability even more," Schonenbach explains. "Kenya's disputed presidential election, post-election violence and civil unrest raised a significant red flag for decision makers considering outsourcing to Kenya. Watching riots and chaos broadcast around the world makes a very tough sell inside the board room."

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