Nasser Sunnaa knows better than most what it takes to succeed. As the former boss of the Jordan Investment Board, his job was to attract much needed foreign investment into the country. When the job ended last year, Sunnaa had already learned enough to take him into his next big venture.
“My job was doing a lot of competitive analyses, and BPO (Business Process Outsourcing) came to light. The potential to develop such an industry is just huge — so that’s what I’m trying to do,” he says.
Last September his own company Zadd, formed with two other partners, went live. It has quickly set about targeting local firms for acquisition, and attempt to take their services — from medical and legal services to accounting and publishing — onto a regional and global stage.
We may be coming out of the worst recession since records began, but Sunnaa is only too aware that BPO is one field that hasn’t been affected. The global industry is worth $170bn a year, and still growing at around twelve percent annually. India leads the way, with more than 60 percent of the market, while other locations such as the Philippines and South Africa are beginning to make an impact. Even China is fast getting in on the act.
But Jordan? So far, despite a strong skills base and low cost structure, the county has yet to make a name for itself on the global BPO stage. Sunnaa is fast changing that. “It is a perfect fit because Jordan has no oil and no water so it cannot be a manufacturing base. It is a small country and the local market is not attractive. So anything you do has to be export oriented… so you might as well start exporting services and I saw BPO as the number one priority , to attract companies to come and turn Jordan into a service delivery centre,” he says.
The business case makes a lot of sense. Jordan has skilled human capital, bilingual capabilities, the infrastructure is there with a strong telecommunications network, and best of all it has a very competitive cost structure.
He explains: “When I worked in government, many of the companies we spoke to told us at the time that the preferred entry model would be through a joint venture because BPO is labour intensive. It was difficult for them to come into a foreign country and have foreign managers trying to manage a local workforce. They wanted to partner with someone who understands the local culture. So the minute I was out of government I thought I should do this.”
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He is of course some way behind the pace, with India having long established itself as the world’s call centre base. But Sunnaa says there is still a decent gap in the market for him to make an impact.
“Initially the target market is the GCC, because that’s where we have a value proposition. It is difficult to compete with the Indians unless you focus on a niche where Arabic/English skills are required and certain technical skills. In the near future in terms of wages and costs, I think we will even be competitive with the Indians,” he says, adding: “The concept is simple — we go after big companies and say don’t waste your time doing non-core functions, just focus on your core function — the non-core, mainly back office work, can be outsourced to a third party. And if that can be outsourced to a country where the cost structure is much lower, then that makes business sense. We can do it legal, accounting, publishing — medical, engineering. We’re looking into all these areas.”
Zadd already has more than 25 staff on its books and is the final stage of taking over a local accounting company. It will then market those services across the region. It has already made inroads in the publishing and medical fields, and so far Sunnaa is convinced that the only way is up.
“Take the medical field — we can do it faster, cheaper and better… You can send an image over wires and get results and report. But there are also many back office functions like the processing of insurance claims. One third of the cost of medical care in the US is the processing of paperwork. That doesn’t need to be done in the US when we can do it for a tenth of the cost,” he says.
According to a survey by PWC, a large majority of customers (87 percent) say that today’s outsourcing delivers the benefits projected in the original business case, whether partly or completely. 31 percent say they got the benefits ‘completely’ — which is remarkable, considering the complexities and unknowns that are involved. In financial services, 46 percent completely met their goals.
Sunnaa explains: “I think in the region we have two challenges — first is to sell the concept and the model. In certain practice areas people are weary about letting go of their customer base to a third party. And secondly selling yourself and your services,” adding: “I see tremendous potential for growth in Jordan. From my perspective, I would say that 90 percent of BPO in Jordan is mainly voice-based as in call centres. What we are trying to do is focus on more knowledge-based activities, where the value added is much higher… we have good lawyers, doctors, engineers and accountants but the local market is just too small. Exporting the output of that labour is what we are doing as opposed to exporting labour. It should be one of the cornerstones of the country’s growth.”
There will be no shortage of people in Jordan hoping he can succeed. Last year saw unemployment rise to 13.1 percent, with 27.2 percent of youths between 20-24 years old out of work. GDP growth in 2011 was barely over two percent, with the construction and tourism sectors badly hit by the global economic slowdown. The country is facing more budgetary and debt burdens after receiving just $18m of the $870m in aid promised by world nations, with prime minister Fayez Tarawneh admitting last week: “With all frankness and clarity, we have a crisis represented by the budget deficit and financing gap and the ability to offset that gap in addition to a high debt both internally and externally.”
Jordan’s government will be hoping one of its former stars can help change things for the better. So far, the indications are that Sunnaa is more than succeeding.
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