Archives for August 2011

6 Secrets to Nairobi Outsourcing

August 30, 2011 by 6 Comments

In Kenya today, many organisations seem to have taken to Outsourcing. There are many different tasks, roles and responsibilities that you as the business owner can outsource. The greatest thing is that outsourcing in the long term actually makes savings for your business.

Some noticeable outsourcing services that have really been pushed into the Kenyan market to date are courier services, security services, office cleaning, IT support and other concierge services. I don’t think there are any cleaning ladies any more, even in government buildings you will notice that they have a company doing all the cleaning work. Perhaps smaller businesses are still hiring a cleaning lady for obvious reasons non the less.
I personally use courier services a lot. How simplified life has become especially in this age where fuel prices are on the rise every month. It saves you having to do the other mundane tasks such as queuing in the bank and in other offices, making deliveries, renewing driving licenses, making payments, collecting purchases, it’s phenomenal and its going to newer heights. The costs tied to the courier services are pretty low compared to the cost of you being stuck in traffic and you wasting time in a queue.

A cleaning service or IT support service will help you reduce costs such as wages and related human resource costs, supervision costs, costs of materials such as detergents and tools of the trade, office space etc .

Though there is so much good from outsourcing, what’s the flip side you need to pay attention to?

  1. Once again it comes down to the quality of the service being provided by the outsource. Whenever your business is not receiving the quality that you expect for a certain rate then something doesn’t add up.
  2. Just because you outsource a service for your organisation should not mean that you leave the outsource to run its own show, they should be able to blend into your business easily.
  3. You should be engaged in what they are doing and demand improvements when they are necessary. You as the client should be sure that the outsource is meeting all the needs that you have, if not perhaps reassess the situation.
  4. Outsource should be used where you see it will bring your business most benefit. It is important to do the mathematics of how much you will save by using an outsource vis a vis how much you are spending without the outsource. Get it down to the numbers.
  5. Don’t outsource just because everyone else is outsourcing because it could do you more harm than good do what fits for your company. Businesses are different.
  6. Be careful that your outsource is there to enhance the experience that your customers are receiving otherwise what’s the point?

Naomi Kinyanjui is an aspiring enterpreneur, a Procurement Specialist by profession with a passion for life, writing and making a difference. Follow her on Procurement Mentality 101 blog where the talk is all about supply chain and procurement and maintaining professionalism in such a controversial field.

Filed Under: Small Business

Come Meet A Kenyan Business Warrior – Kamal Budhabatti

August 22, 2011 by 3 Comments

Kamal Budhabatti is a name you should probably register in your mind for posterity reasons. This is a man who is set to conquer the world. The unassuming Indian-Kenyan entrepreneur is working relentlessly towards putting African software on the global map, and he is succeeding. Kamal is the founder and Chief Executive Officer of Craft Silicon, a Kenya-based global software development and services company worth around Ksh 1.7 billion and with an annual income of over Ksh 500 million, sources more than 85% of its business from without Kenya offering software solutions in different languages including French, English, Arabic and Spanish across Africa, Asia, Europe and America.

The League of Young Professionals warmly invites you for an Entrepreneurship Forum:
Date – Thursday 25th of August, 2011.
Time – 6:00pm to 8:00pm.
Venue – Marble Arch Hotel (Behind Fire Station, Next to Akamba)
Charge – Kshs 500/-

Our Guest Speaker will be Kamal Budhabatti – Founder and CEO Craft Silicon. He will share with us his Entrepreneurial Journey and the Secrets of the Success of Craft Silicon.

Filed Under: Small Business

Cyber Crime in Kenya

August 16, 2011 by Leave a Comment

www.bettersms.net hacked!

www.bettersms.net hacked!


A couple of days ago I was at my local – by local I mean not one of those fancy places in Westlands – barber shop when suddenly two policeman came in and arrested one of the barbers. The crime? Cyber crime (their words). The barber shop offers phone charging services and , apparently, this one barber had figured out how to get into people’s phones when they were charging. He then accessed their Safaricom Bonga points and sent them to himself.

Now, I know the guy pretty well. He hasn’t been to any college or university …. if a guy such as him is into cyber crime, then what of those educated to the highest levels of computer science?

Just recently, I cam across this. Yes. Someone somehow accessed Classic FM’s text messages system and leaked some (very sensitive) text messages to the public. If you have ever sent a text message to Classic FM then you better check if your message has been ‘leaked’. Otherwise you may be surprised to find that your husband figured out what you have been telling Classic about him.

The state of cyber security in Kenya is simply woeful. It seems everyone wants to get online, build fancy websites and all sorts of ‘apps’ but no one wants to invest in basic security. Take the case of the screenshot above which is from www.bettersms.net – they got violated publicly and embarrassed. Just recently, Idd Salim talked about the shockingly lacking security in our local online banking sites.

What’s all this leading to? If it hasn’t happened yet, someone will end up losing a lot of money that will affect a lot of people. Don’t let that be you, sawa?


Filed Under: Internet Culture

Bad Customer Service

August 2, 2011 by 6 Comments

It seems like rocket science to many small businesses in Nairobi. Customer service is not always easy to get, though at the rate some businesses give it you would think it is in short supply.

Visiting a local franchise restaurant in town the other day, I sat for about 20minutes before my waitress even realised I was there. I knew right off the bat that there was going to be no tip and that keeping my cool would be an uphill task from there on out.

What’s challenging in getting staff to offer your customers good service? I mean I love the restaurant but now I know that I will most likely never return to that branch.

Bad customer service impacts negatively on your business, so it is time for you to make sure that you have staff who care about the level of service that they are offering your customers. It’s easy to do, it is not rocket science, and they just need to understand that customer is king, as the adage goes. The interaction your staff have on a daily basis with your customers means it is one of those things that should be non negotiable. Obviously you cannot be there to interact personally with every customer you have so the option is to simply train your employees on how to handle customers.

When you give customers good service, they will sing about it all they can, non stop, to everyone and above all they won’t shy away at recommending you to others. Word of mouth spreads like wild fire, negative word of mouth spreads even faster and kills your brand. Rather, kills the brand that you are trying to build.
Why should it take more than one day to respond to a customer query online? By the time some companies out there have responded to a customer email complaint or query, you as the customer have even forgotten what it is you were complaining about or why for that matter. Same case goes to returning a phone call, you will even be lucky to get called back so never hold your breath on that one.

It’s up to you to know where you want your organisation to go to, up and away or down to the dogs. Really, it is not rocket science, pay attention to your customer service.

Naomi Kinyanjui is an aspiring enterpreneur, a Procurement Specialist by profession with a passion for life, writing and making a difference. Follow her on Procurement Mentality 101 blog where the talk is all about supply chain and procurement and maintaining professionalism in such a controversial field.

Filed Under: Small Business

The Money System and Eternal Debt

August 1, 2011 by Leave a Comment

How does money work? Many people know that money is “printed” at the Central Bank so that we can use it in our economy. But how, exactly, does this process work? How did we go from using gold and silver to paper as our money?

“Paper” money was invented due to necessity. At the start of the industrial revolution, businesses were expanding at rates never seen before and they needed money to finance their expansion. At that time, people used gold and silver coins for money. So if it cost one million gold coins to build a new factory, then you had to actually find one million gold coins. But gold and silver are rare so there was not enough gold to satisfy the demand for money.

A man named John Law solved this problem by inventing what would later be known as the fractional reserve system. He invented a new type of money to replace the use of gold coins. It is important to note that his invention created the mechanism to finance the industrial revolution and, indeed, our modern technological world.

Law’s solution was to create “paper” money, a.k.a banknotes, and use it instead of gold coins. The banknotes would then be officially recognised as “real money”. The advantage was that paper money could be expanded infinitely (unlike gold) and was much cheaper to make. To get and keep initial public confidence (people questioned why they should stop using gold and start using paper), Law suggested that a fraction of gold always be kept on hand for the few people who wanted to redeem their notes for real actual gold. Through trial and error, it was found that gold reserves could safely “back up” up to ten times their value of paper money. That is, if a bank had Kshs 100 worth of gold, they could safely print up to Kshs 1,000 bank notes.

As stated above, at the start, banks had to have real gold reserves roughly equal to 10% of all the paper money that they printed. However, in the 1930s, the ability for people to convert their paper money into gold was dropped. This removed the need for central banks to have gold reserves in their possession and, indeed, virtually no central bank in the world today has gold reserves that can fully back up all their paper money. John Law’s method of money creation is still the dynamo that powers our present world.

However, there exists a grave problem. Let’s imagine that the Central Bank of Kenya wanted to print Kshs 100 today. They would print it and then would lend it to the government of Kenya or any one of the local banks. Naturally, the Central Bank incurred some costs while printing the money so it has to charge interest to whoever takes the newly printed Kshs 100. That is, if the interest rate is 10%, the Central Bank will expect to be paid back Kshs 110 for every Kshs 100 that it prints. Think about this. Who prints the Kshs 10 to pay back the initial amount? The answer is no one. This money is created out of thin air.

When presented with this scenario, there is often a tendency to think:”Ah, but the borrower can always make the extra Ksh 10 somewhere else, through hard work or a deal overseas.” However, although we frequently interchange the two sayings, earning money is not the same as making it. Earnings are simply a transfer of money from one ownership to another and neither increase nor decrease the total money in existence. Making money actually does increase the nation’s money supply but no-one can do that but the central bank itself.

The result of creating Kshs 100 but demanding Kshs 110 in return is that the collective borrowers of a nation are forever trying to repay an amount that they will never be able to repay: the mythical Kshs 10 that was never actually printed. This debt is, in fact, unrepayable and every time more money is printed, the nation’s overall indebtedness increases by the amount of interest due to the Central Bank.

Many economists know about this problem but pass it off as irrelevant. The idea is that if the economy keeps expanding, it fuels an increase in the total money supply in which case there is no problem with meeting interest payments on an increasing debt load. It is important to note that when John Law lived, the need to continuously expand to meet growing debt repayments was seen as a minor problem. Today, however, we are faced with the reality that our world cannot support infinite growth. In spite of this, we have to grow consistently forever or face total economic collapse due to the eternal debt inherent in our monetary system.

This “eternal debt” creates some interesting problems which I will cover in a later article.

Filed Under: Make Money