Project Proposal: Outsource-Africa A Zambian case study November 15, 2005 Irina Azu Raja H. R. Bobbili Jiho Lee Tiffany Yang 1Executive Summary “Outsource-Africa” is an MIT student-led, faculty-supervised initiative to test the feasibility and provide an implementation framework for a potential software outsourcing model from the U.S. to Africa, specifically Zambia. The project will be carried out in three phases, each of which are timed as follows: 1. Phase I: October 15 - December 31 2005 2. Phase II: January 6 - February 1 2005. 3. Phase III (depends on results of phase II): February 15th – June 15th 2006. Phase I of the project will be executed in the US and mainly entails gathering information on outsourcing. This information will be compiled to form a cohesive case study on the feasibility of outsourcing to the Zambian IT markets. The study will illustrate the factors that U.S. corporations take into consideration when deciding to outsource: cost, skill-level, communication and turn-over logistics. It will explore into these factors in light of the Zambian IT markets, and thereby, form a hypothesis on whether IT outsourcing to Zambia is feasible. Phase II of the project will involve testing this hypothesis. In order to do this, the team will travel to Zambia and conduct a hands-on analysis of seven pre-identified Software companies in Zambia. The team will assess whether these Zambian companies are a match to the American outsourcing market; they will do this by a well-established quantitative and qualitative criterion described later. Phase III will begin on February 15th 2005. Since the team would have traveled to Zambia and conducted a skill-level and cost assessment of the seven Zambian IT companies, it will be in a position to lobby American companies to outsource to Zambia. Phase III will mostly involve contacting large American companies and writing proposals in order to initiate software-development contracts with Zambian outsourcing companies. The project is budgeted to meet the travel and transportation costs for team members traveling to Zambia. It will also contain miscellaneous expenditures required for ground-level analysis within Zambia. The team members of the project have diverse backgrounds and bring unique skill sets. The team sees Outsource-Africa as the first step for further ICT-outsourcing work to Africa. 2Outcome and Project Plan In this section, we outline our expectations of each of the three phases of the project. We also point out the deliverables and the expected outcomes. PHASE I: US-Based Work 1. Case-study Development – This phase will involve extensive background research into the current trends of outsourcing to foreign countries. An enormous amount of information will be gathered on outsourcing in general, and will be compiled to form a cohesive study that will explore into the feasibility of outsourcing to Zambia. The focus of our information-gathering will be in three major areas: a. US Outsourcing Companies. In order to assess Zambia’s capability in the outsourcing market, we will need to be able to determine the driving factors behind US Outsourcing. This would mean quantitatively assessing the costs to US companies in practicing outsourcing, and analyzing their expectations of foreign partners firms. b. Zambian IT Market. This will also explore into the Zambian IT market and remotely analyzing the skill levels available and the costs at which these skills are acquired. c. Other offshore outsourcing markets. India, China and Bangladesh are partners in a very large outsourcing market. This phase of the project will explore into the special qualities that they bring into the market. Why is it that companies choose to outsource to these markets? Any special considerations with respect to their software skill levels will be looked at. The case study will also present quantitative and qualitative data of specific companies that have become successful outsourcing partners. Through this analysis, it will point out whether Zambian IT companies can also benefit from this growing global market. 2. Finding Zambian outsourcing partners –Small IT companies who that might be are interested in outsourcing will be located through the MIT-Alumni network, and approached with the OursourseAfrica idea. Seven of these companies have already been identified and contacted. They willbe interviewed about their requirements for outsourcing. Aspects to be addressed include the kind of skills companies look for in outsourcing, and the pay scales at which they like to outsource. The needs that are peculiar to each company would will be looked at, as well as the level of precision required, which will be compared to the level of quality control that is possible with work done in Zambia. Extensive research will go into the level of investment that the company is capable of making in Zambia and the kinds of projects the company will be able and willing to outsource, for example, web development, data base management, and research. In addition, the kinds of skill sets that match these kinds of outsourced projects will be looked at. Other needs of the company to be assessed include the hardware investments such 3as a centre, computers and the telecommunications and internet infrastructure that will be necessary for work. The results gathered from this research will be used as a guideline for phase two of the project. PHASE II: Zambia-Based Work Phase II of the project will be feasibility testing within Zambia. Using the case study from Phase I as background, project members will travel to Zambia to analyze the feasibility of outsourcing to five pre-selected IT companies. These companies’ IT skill levels will be thoroughly analyzed using the International Standards Organizations’ IT-assessment criterion1. They will also be able to put estimates on the prices at which outsourcing would be feasible within Zambia. Based on this work, the project members will be able to conclude on whether outsourcing is feasible or not.” A second objective of this phase is to construct detailed profiles of these IT companies. These profiles will illustrate the skill levels offered in each company and have detailed biographies of each of the IT workers. It will also contain a detailed price sheet and policies and conditions of each firm. Additionally, it will describe the Republic of Zambia’s policies on