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ICT Sector Assessment, Free Trade Agreement Signature, IESC, USAID

The document outlines an assessment of Morocco's ICT sector with a focus on strategies for improvement and alignment with the U.S. market for outsourcing. It identifies the constraints faced by Moroccan ICT companies, including limited proximity to the U.S., lack of market visibility, and a need for better operational practices. Recommended strategies include enhancing technical training, understanding U.S. market dynamics, and building partnerships to optimize competitiveness in global sourcing.

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ICT Sector Assessment Proposed Strategies For Moroccan ICT Companies v3.5 Tuesday, January 13, 2004 Mehdi Sif, ICT Expert smehdi@iesc.org msif@monsoonconsultinggroup.com
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Mission statement • High-level assessment of the Moroccan ICT sector – Interviews with key influencers and decision makers • Interviews with candidate companies – Empirical approach – learn from real-life experience – Provide an early evaluation of export potential • Unique know-how, core competencies, differentiation – Provide early recommendations on go to market strategies • Provide customized recommendations on type of assistance IESC could provide to company • Provide recommendation on assistance IESC could provide across companies
Non-goals • Limited focus on “Macro” factors – Geopolitical risk – Government policies – Infrastructure & ICT penetration • Tele-density, penetration of PCs • Backbone infrastructure, international uplinks etc. – Deregulation, liberalization • e.g., 24/96, 55/01, role of ANRT etc. – Legislation • E-commerce: Encryption, privacy, content, technology crimes, and monopolistic practices in order to participate in e-commerce successfully • Intellectual Property rights – IT Labor Market • Labor cost comparison, productivity etc.
Goal: Optimize Value Proposition at Time and Place of Outsourcing Transaction Methodology – our approach Macro • Government policies • Infrastructure • Legislation • Comparative advantage Enterprise Competitive advantage Individual •Education, culture Individual Enterprise Global Environment Vietnam Malaysia Tunisia Morocco In the eyes of U.S.-based: • Decision makers • Influencers, recommenders • Outsourcers • Decision making process • Selection criteria • Success factors • Cognitive assumptions • Perceptual Map • Personal experience • “Networks/proximity” China India Characteristics
The assessment – our approach • Four week-effort • Interviewed 21 companies, associations, governmental agencies related to ICT 13% 16% 9% 9% 9% 9% 13% 9%9% 4% Electronic Payment Systems GIS Content Education Gov. Agencies Sys. Integrators HW/SW Vendors Associations Consulting Decision Support Systems
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
The U.S. market: an economy in transition The U.S. Labor Market: • Unemployed U.S. software engineers has more than doubled, to 4.6%, in three years. • The rate is 6.7% for electrical engineers and 7.7% for network administrators. • There are 234,000 unemployed IT professionals (Source: U.S. Bureau of Labor Statistics, 2003) • H-1Bs issued to workers in the high-tech industry dropped 74.3% percent, from 105,692 in 2001 to 27,199 in 2002 (Source: department of Homeland Security’s Office of Immigration Statistics)
U.S. Market: Outsourcing Trends • More then one-third of new IT development work for big U.S. companies is done overseas, with India the biggest site. •Offshore outsourcing will grow more than 20% annually to become a $10 billion market by 2005 Source: Meta Group, 2003
Outsourcing: A heated debate in the U.S. • Election - November 2004 approaching • Outsourcing and impact on U.S. economy – Protecting American Jobs – Low dollar value and impact on foreign import/labor market • Real costs & risks vs. benefits of outsourcing – Large PC manufacturer example in India – Report by People 3, only 21.1 percent of companies surveyed reported a cost savings of greater than 20 percent due to IT outsourcing, while 18.4 percent did not achieve any cost reductions – “Near–shoring” trend (Canada, Mexico)
Market Penetration by Geography 24%65% 11% North America Europe Asia/Pacific Offshore Outsourcing Market, Penetration by Geography Source: The Aberdeen Group: Best Practices in Offshore Software outsourcing
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Why U.S. companies outsource (cont.) 1. Cost reduction (53%) 2. Resource constraint (22%) 3. Faster time-to-development (16%) – 24x7 operations & added resources 4. Flexible access to critical technology skills (6%) 5. Other (3%) Source: The Aberdeen Group, Best Practices in Offshore Software Outsourcing 53% 3% 22% 6% 16% Cost reduction Ressource Constraint TTM Access to skills Other
Why U.S. companies outsource 1. Reduce & control operating costs 2. Improve company focus 3. Access world-class capabilities 4. Free up internal resource for higher priority projects 5. Resources/talent not available internally 6. Accelerate re- engineering benefits 7. Function difficult to manage or out of control 8. Make capital funds available 9. Share risks 10. Cash infusion Source: The Outsourcing Institute, 2003
Outsourcing: types of services Source: The Aberdeen Group, Best Practices in Offshore Software outsourcing Legacy ADM Custom Apps. Product Support Design/Planning Package Int. QA & Testing
What: Project type and propensity to outsource Required Level of Human Interaction (Importance of cultural fit) Know-how Added Value Requires high “proximity” Importance of: • Physical interaction/presence • Cultural alignment • Business practices alignment •finance, accounting • Language proficiency Example: Audit, Consulting ERP Management SW Low-context projects Importance of: • Ease of integration into existing operations • Clearly defined projects, self contained (MBO) • Requires minimum cultural fit • Interaction can be through well defined processes / NPI documents: •Functional, design spec etc. Example: Development of legacy protocols (X.25, FR, ATM, SDLC/SNA) Custom-development of feature Special projects (customer-specific) Good Alignment w/ Success Factors
How: the selection criteria for outsourcing IT Expertise Culture Fit Relationship Viability References Standards Labor cost, productivity gains & low risk assumed equal Source: The Aberdeen Group, Best Practices in Offshore Software outsourcing
Key success factor for outsourcing • Start with self-contained “test” project using measurable goals and objectives – SLA: Delay, cost, quality, process to follow, “owners” • Ensure awareness and internal buy-in across functions • Heavily use program management and NPI processes – Review document all internal; process, information flow etc. • Assign dedicated hand- picked program manager – Dual hat/ cross cultural understanding – Favor program manager with personal ties to suppliers • Ensure corporate culture fit • Ensure cultural understanding & training both way • Document everything – MRD, functional, design specs – Meeting minutes, action register, milestones etc. • Hold regular status meetings – Identify issues early & assess impact – Emphasize open and Immediate resolution of issues
Key success factor for outsourcing • Establish a highly- available and secure infrastructure – Firewall, IDS, anti-virus – Highly available infrastructure, backup and restoration procedures (RAID) • Heavily Leverage ICT tools to enable logical “proximity” – QA automation – Release management tools (CVS, clarify) – Audio, Video conferencing • Allow for a 3-6 month ramp up period – On-site training of “core team” • Tools, processes, code review, building personal ties – “Core team” propagates know- how in home country • Heavily emphasize quality – Importance of SLA – US companies are accustomed to leading quality services – Importance of standards: • Software Engineering Institute (SEI) Software Capability Maturity Model (CMM) • ISO 9000 certification • TL9000 (ISO 9001 derived)
Who makes the outsourcing decisions • Trigger – CFO/COO: cost control, margin contribution – Special or customized projects • Decision makers & recommenders – CTO/VP of Engineering/Director of Software development/QA directors • Influencers: – Press and analysts, consultants • Final endorsers – The “Nixers”: CEO/CFO/COO
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Morocco in a global context Political/Regulatory environment Country Score Rank (/102) Finland 5.74 1/102 United States 5.20 8 Jordan 4.56 26 India 4.47 29 Malaysia 4.46 31 Tunisia 4.42 34 Mexico 3.84 59 Egypt 3.72 66 Morocco 3.68 69 Turkey 3.58 73 Vietnam 3.43 78 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Measures impact of country's policies, laws & regulations and their implementation on use of ICT
Morocco in a global context Infrastructure Country Score Rank (/102) United States 5.55 2 France 4.63 14 Jordan 3.35 48 Tunisia 3.31 52 Mexico 2.66 55 Turkey 2.64 57 Morocco 2.93 61 Egypt 2.76 65 India 2.65 67 Haiti 2.14 87 • Source: INSEAD (based on data from the World Bank) 2003/2004 • Level of availability, price and quality of key access infrastructure for ICT. • A quality ICT infrastructure facilitates the adoption, usage and impact of these technologies
Morocco in a global context Market Environment Country Score Rank (/102) United States 4.76 2/102 France 3.76 17 India 3.22 27 Tunisia 3.15 29 Vietnam 2.91 38 Egypt 2.77 49 Turkey 2.64 57 Mexico 2.66 55 Morocco 2.60 60 Haiti 1.61 102 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Propensity for the market to support a knowledge-based society •GDP, import/export metrics/availability of funding/skilled labor/development of corporate environment
Morocco in a global context Business readiness index Country Score Rank (/102) Finland 6.49 1 United States 6.34 3 Tunisia 4.72 35 Jordan 4.62 42 Morocco 4.43 46 Mexico 4.38 50 Egypt 4.10 60 Turkey 4.25 56 Vietnam 3.85 74 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Readiness of business to participate and benefit from ICT • Focus on large corporation but also SME/SMB & measure willingness to use ICT
Morocco in a global context Individual Readiness Country Score Rank (/102) Finland 5.98 4 United States 5.89 5 Jordan 4.21 54 Mexico 4.22 53 Tunisia 4.18 56 Egypt 3.91 72 Vietnam 3.90 73 Morocco 3.68 78 India 3.65 80 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Readiness of Nation’s citizen to use and leverage ICT •Literacy rate, mode and locus of access to internet, and degree of connectivity of individuals
Assessing potential of individuals for ICT Source: National Center for Education Statistics
Overall Relative Ranking vs. average 0 25 50 75 100 Market Environment Political& Regulatory Infrastructure Individual Readiness Business Readiness Overall Morocco Ranking, Network Readiness Index
Conclusions on Morocco’s positioning • Purely from a “paper evaluation” perspective Morocco is not well positioned comparatively in the area of ICT – This is from the perspective of U.S.-based decision makers, even when compared to regional players • Moroccan companies need to learn from the French- Morocco example and Indian Model in the U.S.: – Understand and replicate conditions/success model – Optimize value proposition with key audiences • Companies need to proactively position themselves at the place and time when decisions are made: – Leverage “networks” and levers – Reach Influencers and opinion leaders (awareness) – Strike win-win partnership with established companies – Leverage the FTA as “critical event” • Need to identify & leverage competitive advantage at the enterprise level – Build and advertise positive experience – Put Morocco on the outsourcing Map through success stories
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Enterprise level, our observation • Limited “proximity” with the U.S. (e.g. vs. France ) – Limited historical ties – Lack of geographic proximity – Cost of transportation to U.S. – Cost of Telecommunications – Lack of developed networks • Alumni, associations, business communities etc. – Different ways of doing business • Accounting, finance, language, approach – Morocco unknown in the U.S.: awareness issue – Very different cultures • Individual, corporate • Very limited visibility into the U.S. market
Enterprise level – our observations (cont.) • Most companies in “survival mode” – Financial viability in question in the long run – Minimize risk by spreading resources across applications – Scope versus depth – companies do not develop in-depth know-how • Small local market doesn't allow for companies to reach “critical mass” – Only larger companies who diversify can feed off cash cows – Companies cannot invest at loss in value creation/innovation – Companies may not be able to handle required scale of projects (minimum 100-250 engineers) • Resources, financial staying power • Lack of easy access to capital – Limited skills to assess intangible technological risk/potential – …AND lack of company maturity doesn’t allow for funding – Entrepreneurs forced to develop companies through private funds – risk averseness – Major issue in helping develop companies
Enterprise level – our observations (cont.) • Limited experience in managing large scale projects – Except in larger companies that have reached “ critical mass” in Electronic Payment Systems for example • Very limited functional specialization – Characteristic of maturing companies – Multi-hat employees – Limited processes and organizational routines – Some companies give very little weight to product management/marketing: “One P” problem • Limited use of automation tools – Quality control – Release management tools – even larger companies require additional training – This would pose problems in the long run for scaling the organization • Exponential cost structure • Impact on quality
The Enterprise – our finding (cont.) • We expect to see some consolidation in the long run – We expect many smaller companies will not survive in the long run – Companies will merge and align around vertical specialization to achieve economies of scope, scale and skill, and ensure stronger financial staying power – We expect the larger groups with strong cash cows diversify into ICT and become local leaders in the long run
Enterprise level – our findings (cont.) • Some areas where Morocco has developed core competencies (product, operational, technical, managerial etc.) • Electronic Payment Systems • Geographical Information Systems • Decision support systems • Content development (Morocco-specific) • Localization of content / SW translation in Arabic • Real estate asset management • Others… • Need to ascertain competitiveness on U.S. market – In a global sourcing context • Need to develop U.S.-specific go to market strategies – Move beyond prototype – Customize pricing, distribution channels, joint ventures, partnerships etc.
Feedback from the companies Interviewed 1. Access to capital – Technological risk management 2. Misunderstanding of U.S. market – Intimidated by size of country – where to start from ? – Size of target market – Competitive landscape – Distribution channels – Decision making process? 3. Go to market strategy – “1P” problem – Productization – Marketing strategy – Strategic planning 4. Operational know-how – NPI – TQM – Release management – Technical support – Automation tools 5. Language/cultural barriers
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Identified opportunities for IESC assistance • Technical training: – Training in high-availability: backup, storage, restoration – Training in security best practices: firewall, IDS, etc. – Training in automation tools • Release management, testing, quality control, etc. • Operations – Expert training in “NPI” methodology/process – Advanced program management training – Operation and SW release management “best practices” – Training in quality control for SW development - ISO, CMM, TL9000 methodology • Business, marketing, product management – Expert assistance to determine key go-to-market strategies for specific verticals – Business linkage • Customers, partners, distribution channels, potential investors, venture capitalists – Marketing activities (trade shows, etc.) • Other – Intellectual Property Rights Expert, Lawyer (specialized in IT) – Cross—cultural training for Moroccan executives – Language training (business English)
Agenda • Methodology, goals, non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
Our recommendations - summary 1. Build basic enabling environment for nascent ICT sector 2. Articulate main lines of overall Moroccan policy to build a comparative advantage (with appropriate investments) 1. Move away from “textile” model – a “cost only” strategy is short-lived 2. Invest in value creation/innovation through R&D, education in key areas 3. Facilitate technology transfer to Morocco in key areas 4. Proactively monitor & intersect innovation curves for the next 5-10 years 5. Proactively engage in technology and market monitoring & shape standards 3. Learn from the Indian Model & French “proximity” model – Identify, build and reinforce networks of insiders at critical decision points • Leverage influencers as levers and/multipliers – Leverage and build direct AND indirect networks – Leverage all institutions, including universities, schools and U.S. companies/entities locally in Morocco 4. Put Morocco on the “outsourcing map” – Heavily leverage the FTA announcement as critical event – Focus and sell “key success” stories (initial failures are not an option) – Develop and advertise (with main consultancies) case studies based on key success stories – Build and develop Morocco’s brand equity
Minimum conditions for ICT sector development must be gathered, fast • Access to capital/financing must be facilitated – Including for key Moroccan expatriates & foreign investors • Future-proof Telecommunication Infrastructure must be built (Example: IP/MPLS OC-192 backbone) • Basic market conditions must be gathered – Deregulation, liberalization, increased competition – Transparency, real competition – Electronic Commerce legislation – Intellectual Property rights • Accelerate Internet diffusion/PC Phone line penetration – Pricing, ubiquity • Generation of content relevant to country/region must be accelerated – E-government, increase “usefulness” of internet access
Fundamental questions • What is Morocco’s comparative advantage – Language and proximity with France & “Francophone Africa” • Morocco competes with Canada, France, Vietnam*, Tunisia, Madagascar? – Language and proximity with Arab World • Morocco competes with UAE, Jordan, Egypt – Labor cost advantage – short-lived strategy? • Morocco competes against Vietnam, Tunisia, India, Madagascar, Philippines, Malaysia etc. – Unique know-how and core competencies? • There needs to be clear, well funded development policies for key sectors and technologies • Companies will align with framework & policies
Moving beyond a “cost-only” framework Country 2 Country 1 Time Technology Transfer •Obsolete Model: Textile • Second but cheaper • Follows Technology life cycle • Follows Market Life Cycle •Geography sensitive •Delayed diffusion of know-how LaborCost/GDPperCapita •Go to the source of innovation •Create value through R&D •Shape standards – at the source •“Change the rules” • Schumpeterian market •Technology leader, first-mover adv. •knowledge-based competition Country x Trickle-down model Shower Model Country y Country z Country n Country x Country y Country z Country n
Move into the value creation business • The key to breaking life-long dependencies – Breaking the trickle-down model • Move away from “labor-cost only” models • Fund innovation / value creation – Leverage/fund education sector on key projects – Facilitate private sector/university symbiosis – Shape standards before they become ones • Focus on applied research – Technology must solve business problems – “Learning by doing” to develop key know-how • Move up the value creation chain – Leapfrogging – current technologies – Intersect innovation curve • Engage in knowledge-based competition
Examples of “hot” technologies • Open source protocols – Linux, OpenSSL, OpenSSH • Optical/Electrical integration: – CDWDM, DWDM, GMPLS, OXC etc. • Convergence: – MPLS, traffic engineering, Diffserv-TE – Multiservice transit • High-availability for IP – 99.999%%% uptime – MPLS fast reroute – Non-stop operation for routers • VoIP – See Vonage, Skype etc. • Security • VPN (SSL, IPSEC, AES, MPLS-VPNs (L2, L3) • Storage Networks • Grid Computing • Content delivery – VOD, gaming online • Wireless (2.5G, 3G, OFDM, Wifi/802.11x) • Metro Ethernet (802.11x, 10GE, etc.) • FTTP (Fiber to the premise) • Peer to Peer (P2P) applications: – Skype, etc.
Other possible strategic applications • Search engines in Arabic – Integration in key portals (importance of content) – Key in “transaction” between subscribers and content – Strategic importance of footprint, brand awareness for revenue from sponsored links/ads/referrals • Context-specific security applications – Passive, active monitoring – Snooping, TCP splicing – Pattern recognition
Identify & manage differences in technology adoption rates Importance of “technology monitoring” • Identify areas where Europe has technological advances vis-à-vis the U.S. – Electronic Payment Systems • EMV and evolution to “intelligent card” payment in U.S. • Gained know-how and critical mass through key projects (Interbank) – Use of GSM in America – Leverage know-how AND cost advantage • Intersect innovation curves Importance of monitoring business environments • Importance of detecting “latent market” that align well with key strengths – E.g. computer science + mathematics + linguistics – Security products (Arabic) for market in U.S. – Portals & research tools
Monitoring and Shaping standards Standard bodies and forums: • Broadband Content Delivery Forum - www.bcdforum.org • MPLS Forum - www.mplsforum.org • MPLS Resource Center www.mplsrc.org • IETF Working Groups at: www.ieft.org • Mip6 Mobility for IPv6 • L2vpn Layer 2 Virtual Private Networks • L3vpn Layer 3 Virtual Private Networks • Ipv6 IP Version 6 Working Group • Ccamp Common Control and Measurement Plane (GMPLS) • Xmldsig XML Digital Signatures • Idwg Intrusion Detection Exchange Format • Ips IP Storage • Iptel IP Telephony • avt Audio/Video Transport • Mpls Multiprotocol Label Switching (IETF) • IEEE www.ieee.org (Ethernet, 802.11x (WiFi) – RPR, DPT etc.) • OIF www.oif.org Optical Internet Forum • ITU
Putting Morocco on the global sourcing Map • Morocco has very limited brand equity – Great opportunity/challenge – Risk of initial experiences->taint perception • Importance of maximizing chances of success • Importance of articulating Morocco’s comparative advantage • Case studies/success stories & white papers • Develop “sponsored” country-specific reports • Go-to market strategy: – Risk , business cases, case studies, on-line resource center – Speaking engagements at key speaking events on outsourcing (subject matter expert) • Importance of intersecting decision “transaction” • Leverage levers & multipliers • Influencers, opinion and thought leaders
Putting Morocco on the Map • Use FTA agreement as critical event – Leverage press, media and analyst coverage for outreach campaign within months of announcement – Piggyback on existing initiatives (AmCham, USAID etc.) – Partner with key stakeholders and lobby groups to create events around the FTA – Hire AR/PR agency & launch FTA Morocco event – Organize road shows to reach relevant “networks” • Target key opinion leaders, influencers, and decision makers – Develop direct and indirect networks of decision makers – Target key analysts and press – Develop success stories around successful cases: e.g. Dell case study in Morocco
Target opinion leaders, influencers • Target key recommenders in the Press and Analyst communities • Involve recommenders in developing the Morocco “brand” – Message testing – Develop case studies, business cases jointly – Involve key analysts in key Morocco-sponsored events (e.g. Marrakech Outsourcing World Congress) • Example: – Michael Doane, Vice President & Service Leader, META Group – Julie Giera, VP and Research Fellow, Forrester Research – Michel Jon Janssen, President of the Supplier Solutions division, Everest Group – Martin J. McCaffrey, Executive Director software Outsourcing Research – Mark Kobayashi-Hillary, Consultant, Author, Outsourcing to India – Paul Gillin, Vice President of Editorial and Editor in Chief, TechTarget – Stuart Robbins Founder and Executive Director, The CIO Collective – Scott J. Nathan, Independent Outsourcing Expert/Attorney – Jeffrey M. Kaplan, Managing Director, THINKstrategies – Laurie McCabe, VP and Practice Director, Summit Strategies – Other analysts: IDC, Gartner Group, Telechoice, Yankee Group etc. – Other Press: www.lightreading.com, RedHErring, Fortune, Businessweek, the Economist etc.
Leverage direct AND indirect networks • Direct – U.S. company->Moroccan Company – U.S. company->Moroccan Company-> Arab World – U.S. company->Moroccan Company-> Europe • Indirect Model – U.S. company->Indian company->Moroccan company for “Francophone” Market – Other indirect would leverage countries with strong ”networks” in the U.S.: • Chinese, Canadian, Vietnamese , Israeli companies – EMEA/MENA branch of U.S. companies in Europe
Building “proximity” through “networks” • Moroccan consulates abroad – Identify key executives in ICT abroad (technical directors, venture capitalists, finance executives in American and U.S.-based companies (vs. American companies) – Leverage indirect networks as well: • Moroccan in Indian, Chinese, Canadian companies • Moroccans in companies in Europe where EMEA/MENA decisions are decentralized in Europe • Moroccan school Alumni in the U.S. – AUI, Mohammedia School of Engineering, INPT etc. • Moroccan Alumni and professors from top U.S. schools – Important for technology transfer • Last but not least, U.S. residents in Morocco
Consolidating “networks” • Create permanent offices in key ICT locations – Possibly resort to bi-cultural commission-based “global sourcing” brokers/entities in: • Silicon Valley: San Jose, Santa Clara Sunnyvale, Palo Alto • Boston area: route 128 • Research Triangle Park (RTP) North Carolina • Richardson, Dallas, Fort Worth Texas • Create association peering across geographies – APEBI, ASMEX, CGEM and counterparts in U.S. • Events/Incentives: – Road shows – Outreach via discuss lists/newsletters – Specialized loans for investment back in Morocco/tax breaks for expatriates
Create virtual & physical presence in key forums • Create Presence at key outsourcing venues – Examples: • Outsource World , UK • Outsourcing Strategies 2004 www.outsourcingstrategies.biz • Outsourcing in Telecoms www.iir-conferences.com/telecomsoutsourcing • IDC Outsourcing Forum: Improving Corporate Effectiveness Through Results-Driven BPO • Participate & contribute in key Forums – Advertise on key outsourcing portals: http://www.outsourcingcentral.com
Thanks & acknowledgements • Key decision makers in the audience – Insight provided during one-one interview • The whole IESC team in Casablanca – Special thanks to • Mr. Elbouchikhi, ICT Program Director • Mr. Bensouda, Executive Director THANK YOU
Backup Slides Backup Slides
Time, Technology Life Cycle (substitution etc.) Technology Adoption Rates per Geography Innovation (value creation) Technology Advancement Value …and to whom? What is “Value added” ?
Example: Cultural Proximity Dimension U.S.A (ICT) Morocco Culture - individual Low context - wysiwyg High context – gesture, body language important Culture Legalistic, SLA, contract Based on trust, reputation Culture Individualistic Importance of group, family ,enterprise Decision making process Rational, based on key metrics, decentralized Risk taking encouraged Centralized (rank) Risk averse/high cost of failure Time Time horizon Monochronic Weeks/quarter Polychronic Days/weeks Approach vis-à-vis problem resolution Tackle first – very pragmatic Emphasize analysis upfront Approach vis-à-vis strangers Friend until proven otherwise Enemy until proven otherwise Business approach Spontaneous, direct Referral/go-between important – reputation etc. Communication style Straightforward, centered around issues – “straight to the point” Context sensitive, centered around people, harmony Structure of organizations Flat, Matrixed Hierarchical, Pyramid
U.S. Market: Drop in Investments • Venture Capital Investments dropped more then 50% since Q2 2000 Source: Red Herring, Ernst&Young , VentureOne
Math & Science average literacy scores
Average size of companies visited 7% 33% 47% 13% 0-5 employees 5 to 15 16 to 25 25 +

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ICT Sector Assessment, Free Trade Agreement Signature, IESC, USAID

  • 1.
    ICT Sector Assessment ProposedStrategies For Moroccan ICT Companies v3.5 Tuesday, January 13, 2004 Mehdi Sif, ICT Expert smehdi@iesc.org msif@monsoonconsultinggroup.com
  • 2.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 3.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 4.
    Mission statement • High-levelassessment of the Moroccan ICT sector – Interviews with key influencers and decision makers • Interviews with candidate companies – Empirical approach – learn from real-life experience – Provide an early evaluation of export potential • Unique know-how, core competencies, differentiation – Provide early recommendations on go to market strategies • Provide customized recommendations on type of assistance IESC could provide to company • Provide recommendation on assistance IESC could provide across companies
  • 5.
    Non-goals • Limited focuson “Macro” factors – Geopolitical risk – Government policies – Infrastructure & ICT penetration • Tele-density, penetration of PCs • Backbone infrastructure, international uplinks etc. – Deregulation, liberalization • e.g., 24/96, 55/01, role of ANRT etc. – Legislation • E-commerce: Encryption, privacy, content, technology crimes, and monopolistic practices in order to participate in e-commerce successfully • Intellectual Property rights – IT Labor Market • Labor cost comparison, productivity etc.
  • 6.
    Goal: Optimize ValueProposition at Time and Place of Outsourcing Transaction Methodology – our approach Macro • Government policies • Infrastructure • Legislation • Comparative advantage Enterprise Competitive advantage Individual •Education, culture Individual Enterprise Global Environment Vietnam Malaysia Tunisia Morocco In the eyes of U.S.-based: • Decision makers • Influencers, recommenders • Outsourcers • Decision making process • Selection criteria • Success factors • Cognitive assumptions • Perceptual Map • Personal experience • “Networks/proximity” China India Characteristics
  • 7.
    The assessment –our approach • Four week-effort • Interviewed 21 companies, associations, governmental agencies related to ICT 13% 16% 9% 9% 9% 9% 13% 9%9% 4% Electronic Payment Systems GIS Content Education Gov. Agencies Sys. Integrators HW/SW Vendors Associations Consulting Decision Support Systems
  • 8.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 9.
    The U.S. market:an economy in transition The U.S. Labor Market: • Unemployed U.S. software engineers has more than doubled, to 4.6%, in three years. • The rate is 6.7% for electrical engineers and 7.7% for network administrators. • There are 234,000 unemployed IT professionals (Source: U.S. Bureau of Labor Statistics, 2003) • H-1Bs issued to workers in the high-tech industry dropped 74.3% percent, from 105,692 in 2001 to 27,199 in 2002 (Source: department of Homeland Security’s Office of Immigration Statistics)
  • 10.
    U.S. Market: OutsourcingTrends • More then one-third of new IT development work for big U.S. companies is done overseas, with India the biggest site. •Offshore outsourcing will grow more than 20% annually to become a $10 billion market by 2005 Source: Meta Group, 2003
  • 11.
    Outsourcing: A heateddebate in the U.S. • Election - November 2004 approaching • Outsourcing and impact on U.S. economy – Protecting American Jobs – Low dollar value and impact on foreign import/labor market • Real costs & risks vs. benefits of outsourcing – Large PC manufacturer example in India – Report by People 3, only 21.1 percent of companies surveyed reported a cost savings of greater than 20 percent due to IT outsourcing, while 18.4 percent did not achieve any cost reductions – “Near–shoring” trend (Canada, Mexico)
  • 12.
    Market Penetration byGeography 24%65% 11% North America Europe Asia/Pacific Offshore Outsourcing Market, Penetration by Geography Source: The Aberdeen Group: Best Practices in Offshore Software outsourcing
  • 13.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 14.
    Why U.S. companiesoutsource (cont.) 1. Cost reduction (53%) 2. Resource constraint (22%) 3. Faster time-to-development (16%) – 24x7 operations & added resources 4. Flexible access to critical technology skills (6%) 5. Other (3%) Source: The Aberdeen Group, Best Practices in Offshore Software Outsourcing 53% 3% 22% 6% 16% Cost reduction Ressource Constraint TTM Access to skills Other
  • 15.
    Why U.S. companiesoutsource 1. Reduce & control operating costs 2. Improve company focus 3. Access world-class capabilities 4. Free up internal resource for higher priority projects 5. Resources/talent not available internally 6. Accelerate re- engineering benefits 7. Function difficult to manage or out of control 8. Make capital funds available 9. Share risks 10. Cash infusion Source: The Outsourcing Institute, 2003
  • 16.
    Outsourcing: types ofservices Source: The Aberdeen Group, Best Practices in Offshore Software outsourcing Legacy ADM Custom Apps. Product Support Design/Planning Package Int. QA & Testing
  • 17.
    What: Project typeand propensity to outsource Required Level of Human Interaction (Importance of cultural fit) Know-how Added Value Requires high “proximity” Importance of: • Physical interaction/presence • Cultural alignment • Business practices alignment •finance, accounting • Language proficiency Example: Audit, Consulting ERP Management SW Low-context projects Importance of: • Ease of integration into existing operations • Clearly defined projects, self contained (MBO) • Requires minimum cultural fit • Interaction can be through well defined processes / NPI documents: •Functional, design spec etc. Example: Development of legacy protocols (X.25, FR, ATM, SDLC/SNA) Custom-development of feature Special projects (customer-specific) Good Alignment w/ Success Factors
  • 18.
    How: the selectioncriteria for outsourcing IT Expertise Culture Fit Relationship Viability References Standards Labor cost, productivity gains & low risk assumed equal Source: The Aberdeen Group, Best Practices in Offshore Software outsourcing
  • 19.
    Key success factorfor outsourcing • Start with self-contained “test” project using measurable goals and objectives – SLA: Delay, cost, quality, process to follow, “owners” • Ensure awareness and internal buy-in across functions • Heavily use program management and NPI processes – Review document all internal; process, information flow etc. • Assign dedicated hand- picked program manager – Dual hat/ cross cultural understanding – Favor program manager with personal ties to suppliers • Ensure corporate culture fit • Ensure cultural understanding & training both way • Document everything – MRD, functional, design specs – Meeting minutes, action register, milestones etc. • Hold regular status meetings – Identify issues early & assess impact – Emphasize open and Immediate resolution of issues
  • 20.
    Key success factorfor outsourcing • Establish a highly- available and secure infrastructure – Firewall, IDS, anti-virus – Highly available infrastructure, backup and restoration procedures (RAID) • Heavily Leverage ICT tools to enable logical “proximity” – QA automation – Release management tools (CVS, clarify) – Audio, Video conferencing • Allow for a 3-6 month ramp up period – On-site training of “core team” • Tools, processes, code review, building personal ties – “Core team” propagates know- how in home country • Heavily emphasize quality – Importance of SLA – US companies are accustomed to leading quality services – Importance of standards: • Software Engineering Institute (SEI) Software Capability Maturity Model (CMM) • ISO 9000 certification • TL9000 (ISO 9001 derived)
  • 21.
    Who makes theoutsourcing decisions • Trigger – CFO/COO: cost control, margin contribution – Special or customized projects • Decision makers & recommenders – CTO/VP of Engineering/Director of Software development/QA directors • Influencers: – Press and analysts, consultants • Final endorsers – The “Nixers”: CEO/CFO/COO
  • 22.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 23.
    Morocco in aglobal context Political/Regulatory environment Country Score Rank (/102) Finland 5.74 1/102 United States 5.20 8 Jordan 4.56 26 India 4.47 29 Malaysia 4.46 31 Tunisia 4.42 34 Mexico 3.84 59 Egypt 3.72 66 Morocco 3.68 69 Turkey 3.58 73 Vietnam 3.43 78 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Measures impact of country's policies, laws & regulations and their implementation on use of ICT
  • 24.
    Morocco in aglobal context Infrastructure Country Score Rank (/102) United States 5.55 2 France 4.63 14 Jordan 3.35 48 Tunisia 3.31 52 Mexico 2.66 55 Turkey 2.64 57 Morocco 2.93 61 Egypt 2.76 65 India 2.65 67 Haiti 2.14 87 • Source: INSEAD (based on data from the World Bank) 2003/2004 • Level of availability, price and quality of key access infrastructure for ICT. • A quality ICT infrastructure facilitates the adoption, usage and impact of these technologies
  • 25.
    Morocco in aglobal context Market Environment Country Score Rank (/102) United States 4.76 2/102 France 3.76 17 India 3.22 27 Tunisia 3.15 29 Vietnam 2.91 38 Egypt 2.77 49 Turkey 2.64 57 Mexico 2.66 55 Morocco 2.60 60 Haiti 1.61 102 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Propensity for the market to support a knowledge-based society •GDP, import/export metrics/availability of funding/skilled labor/development of corporate environment
  • 26.
    Morocco in aglobal context Business readiness index Country Score Rank (/102) Finland 6.49 1 United States 6.34 3 Tunisia 4.72 35 Jordan 4.62 42 Morocco 4.43 46 Mexico 4.38 50 Egypt 4.10 60 Turkey 4.25 56 Vietnam 3.85 74 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Readiness of business to participate and benefit from ICT • Focus on large corporation but also SME/SMB & measure willingness to use ICT
  • 27.
    Morocco in aglobal context Individual Readiness Country Score Rank (/102) Finland 5.98 4 United States 5.89 5 Jordan 4.21 54 Mexico 4.22 53 Tunisia 4.18 56 Egypt 3.91 72 Vietnam 3.90 73 Morocco 3.68 78 India 3.65 80 •Source: INSEAD (based on data from the World Bank) 2003/2004 •Readiness of Nation’s citizen to use and leverage ICT •Literacy rate, mode and locus of access to internet, and degree of connectivity of individuals
  • 28.
    Assessing potential ofindividuals for ICT Source: National Center for Education Statistics
  • 29.
    Overall Relative Rankingvs. average 0 25 50 75 100 Market Environment Political& Regulatory Infrastructure Individual Readiness Business Readiness Overall Morocco Ranking, Network Readiness Index
  • 30.
    Conclusions on Morocco’spositioning • Purely from a “paper evaluation” perspective Morocco is not well positioned comparatively in the area of ICT – This is from the perspective of U.S.-based decision makers, even when compared to regional players • Moroccan companies need to learn from the French- Morocco example and Indian Model in the U.S.: – Understand and replicate conditions/success model – Optimize value proposition with key audiences • Companies need to proactively position themselves at the place and time when decisions are made: – Leverage “networks” and levers – Reach Influencers and opinion leaders (awareness) – Strike win-win partnership with established companies – Leverage the FTA as “critical event” • Need to identify & leverage competitive advantage at the enterprise level – Build and advertise positive experience – Put Morocco on the outsourcing Map through success stories
  • 31.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 32.
    Enterprise level, ourobservation • Limited “proximity” with the U.S. (e.g. vs. France ) – Limited historical ties – Lack of geographic proximity – Cost of transportation to U.S. – Cost of Telecommunications – Lack of developed networks • Alumni, associations, business communities etc. – Different ways of doing business • Accounting, finance, language, approach – Morocco unknown in the U.S.: awareness issue – Very different cultures • Individual, corporate • Very limited visibility into the U.S. market
  • 33.
    Enterprise level –our observations (cont.) • Most companies in “survival mode” – Financial viability in question in the long run – Minimize risk by spreading resources across applications – Scope versus depth – companies do not develop in-depth know-how • Small local market doesn't allow for companies to reach “critical mass” – Only larger companies who diversify can feed off cash cows – Companies cannot invest at loss in value creation/innovation – Companies may not be able to handle required scale of projects (minimum 100-250 engineers) • Resources, financial staying power • Lack of easy access to capital – Limited skills to assess intangible technological risk/potential – …AND lack of company maturity doesn’t allow for funding – Entrepreneurs forced to develop companies through private funds – risk averseness – Major issue in helping develop companies
  • 34.
    Enterprise level –our observations (cont.) • Limited experience in managing large scale projects – Except in larger companies that have reached “ critical mass” in Electronic Payment Systems for example • Very limited functional specialization – Characteristic of maturing companies – Multi-hat employees – Limited processes and organizational routines – Some companies give very little weight to product management/marketing: “One P” problem • Limited use of automation tools – Quality control – Release management tools – even larger companies require additional training – This would pose problems in the long run for scaling the organization • Exponential cost structure • Impact on quality
  • 35.
    The Enterprise –our finding (cont.) • We expect to see some consolidation in the long run – We expect many smaller companies will not survive in the long run – Companies will merge and align around vertical specialization to achieve economies of scope, scale and skill, and ensure stronger financial staying power – We expect the larger groups with strong cash cows diversify into ICT and become local leaders in the long run
  • 36.
    Enterprise level –our findings (cont.) • Some areas where Morocco has developed core competencies (product, operational, technical, managerial etc.) • Electronic Payment Systems • Geographical Information Systems • Decision support systems • Content development (Morocco-specific) • Localization of content / SW translation in Arabic • Real estate asset management • Others… • Need to ascertain competitiveness on U.S. market – In a global sourcing context • Need to develop U.S.-specific go to market strategies – Move beyond prototype – Customize pricing, distribution channels, joint ventures, partnerships etc.
  • 37.
    Feedback from thecompanies Interviewed 1. Access to capital – Technological risk management 2. Misunderstanding of U.S. market – Intimidated by size of country – where to start from ? – Size of target market – Competitive landscape – Distribution channels – Decision making process? 3. Go to market strategy – “1P” problem – Productization – Marketing strategy – Strategic planning 4. Operational know-how – NPI – TQM – Release management – Technical support – Automation tools 5. Language/cultural barriers
  • 38.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 39.
    Identified opportunities forIESC assistance • Technical training: – Training in high-availability: backup, storage, restoration – Training in security best practices: firewall, IDS, etc. – Training in automation tools • Release management, testing, quality control, etc. • Operations – Expert training in “NPI” methodology/process – Advanced program management training – Operation and SW release management “best practices” – Training in quality control for SW development - ISO, CMM, TL9000 methodology • Business, marketing, product management – Expert assistance to determine key go-to-market strategies for specific verticals – Business linkage • Customers, partners, distribution channels, potential investors, venture capitalists – Marketing activities (trade shows, etc.) • Other – Intellectual Property Rights Expert, Lawyer (specialized in IT) – Cross—cultural training for Moroccan executives – Language training (business English)
  • 40.
    Agenda • Methodology, goals,non-goals • A demand-side perspective: the U.S. market • Understanding the Business of Outsourcing • Morocco: Relative position in a global sourcing context • The Moroccan enterprise: empirical findings • Identified opportunities for direct IESC assistance • Recommended strategies
  • 41.
    Our recommendations -summary 1. Build basic enabling environment for nascent ICT sector 2. Articulate main lines of overall Moroccan policy to build a comparative advantage (with appropriate investments) 1. Move away from “textile” model – a “cost only” strategy is short-lived 2. Invest in value creation/innovation through R&D, education in key areas 3. Facilitate technology transfer to Morocco in key areas 4. Proactively monitor & intersect innovation curves for the next 5-10 years 5. Proactively engage in technology and market monitoring & shape standards 3. Learn from the Indian Model & French “proximity” model – Identify, build and reinforce networks of insiders at critical decision points • Leverage influencers as levers and/multipliers – Leverage and build direct AND indirect networks – Leverage all institutions, including universities, schools and U.S. companies/entities locally in Morocco 4. Put Morocco on the “outsourcing map” – Heavily leverage the FTA announcement as critical event – Focus and sell “key success” stories (initial failures are not an option) – Develop and advertise (with main consultancies) case studies based on key success stories – Build and develop Morocco’s brand equity
  • 42.
    Minimum conditions forICT sector development must be gathered, fast • Access to capital/financing must be facilitated – Including for key Moroccan expatriates & foreign investors • Future-proof Telecommunication Infrastructure must be built (Example: IP/MPLS OC-192 backbone) • Basic market conditions must be gathered – Deregulation, liberalization, increased competition – Transparency, real competition – Electronic Commerce legislation – Intellectual Property rights • Accelerate Internet diffusion/PC Phone line penetration – Pricing, ubiquity • Generation of content relevant to country/region must be accelerated – E-government, increase “usefulness” of internet access
  • 43.
    Fundamental questions • Whatis Morocco’s comparative advantage – Language and proximity with France & “Francophone Africa” • Morocco competes with Canada, France, Vietnam*, Tunisia, Madagascar? – Language and proximity with Arab World • Morocco competes with UAE, Jordan, Egypt – Labor cost advantage – short-lived strategy? • Morocco competes against Vietnam, Tunisia, India, Madagascar, Philippines, Malaysia etc. – Unique know-how and core competencies? • There needs to be clear, well funded development policies for key sectors and technologies • Companies will align with framework & policies
  • 44.
    Moving beyond a“cost-only” framework Country 2 Country 1 Time Technology Transfer •Obsolete Model: Textile • Second but cheaper • Follows Technology life cycle • Follows Market Life Cycle •Geography sensitive •Delayed diffusion of know-how LaborCost/GDPperCapita •Go to the source of innovation •Create value through R&D •Shape standards – at the source •“Change the rules” • Schumpeterian market •Technology leader, first-mover adv. •knowledge-based competition Country x Trickle-down model Shower Model Country y Country z Country n Country x Country y Country z Country n
  • 45.
    Move into thevalue creation business • The key to breaking life-long dependencies – Breaking the trickle-down model • Move away from “labor-cost only” models • Fund innovation / value creation – Leverage/fund education sector on key projects – Facilitate private sector/university symbiosis – Shape standards before they become ones • Focus on applied research – Technology must solve business problems – “Learning by doing” to develop key know-how • Move up the value creation chain – Leapfrogging – current technologies – Intersect innovation curve • Engage in knowledge-based competition
  • 46.
    Examples of “hot”technologies • Open source protocols – Linux, OpenSSL, OpenSSH • Optical/Electrical integration: – CDWDM, DWDM, GMPLS, OXC etc. • Convergence: – MPLS, traffic engineering, Diffserv-TE – Multiservice transit • High-availability for IP – 99.999%%% uptime – MPLS fast reroute – Non-stop operation for routers • VoIP – See Vonage, Skype etc. • Security • VPN (SSL, IPSEC, AES, MPLS-VPNs (L2, L3) • Storage Networks • Grid Computing • Content delivery – VOD, gaming online • Wireless (2.5G, 3G, OFDM, Wifi/802.11x) • Metro Ethernet (802.11x, 10GE, etc.) • FTTP (Fiber to the premise) • Peer to Peer (P2P) applications: – Skype, etc.
  • 47.
    Other possible strategicapplications • Search engines in Arabic – Integration in key portals (importance of content) – Key in “transaction” between subscribers and content – Strategic importance of footprint, brand awareness for revenue from sponsored links/ads/referrals • Context-specific security applications – Passive, active monitoring – Snooping, TCP splicing – Pattern recognition
  • 48.
    Identify & managedifferences in technology adoption rates Importance of “technology monitoring” • Identify areas where Europe has technological advances vis-à-vis the U.S. – Electronic Payment Systems • EMV and evolution to “intelligent card” payment in U.S. • Gained know-how and critical mass through key projects (Interbank) – Use of GSM in America – Leverage know-how AND cost advantage • Intersect innovation curves Importance of monitoring business environments • Importance of detecting “latent market” that align well with key strengths – E.g. computer science + mathematics + linguistics – Security products (Arabic) for market in U.S. – Portals & research tools
  • 49.
    Monitoring and Shapingstandards Standard bodies and forums: • Broadband Content Delivery Forum - www.bcdforum.org • MPLS Forum - www.mplsforum.org • MPLS Resource Center www.mplsrc.org • IETF Working Groups at: www.ieft.org • Mip6 Mobility for IPv6 • L2vpn Layer 2 Virtual Private Networks • L3vpn Layer 3 Virtual Private Networks • Ipv6 IP Version 6 Working Group • Ccamp Common Control and Measurement Plane (GMPLS) • Xmldsig XML Digital Signatures • Idwg Intrusion Detection Exchange Format • Ips IP Storage • Iptel IP Telephony • avt Audio/Video Transport • Mpls Multiprotocol Label Switching (IETF) • IEEE www.ieee.org (Ethernet, 802.11x (WiFi) – RPR, DPT etc.) • OIF www.oif.org Optical Internet Forum • ITU
  • 50.
    Putting Morocco onthe global sourcing Map • Morocco has very limited brand equity – Great opportunity/challenge – Risk of initial experiences->taint perception • Importance of maximizing chances of success • Importance of articulating Morocco’s comparative advantage • Case studies/success stories & white papers • Develop “sponsored” country-specific reports • Go-to market strategy: – Risk , business cases, case studies, on-line resource center – Speaking engagements at key speaking events on outsourcing (subject matter expert) • Importance of intersecting decision “transaction” • Leverage levers & multipliers • Influencers, opinion and thought leaders
  • 51.
    Putting Morocco onthe Map • Use FTA agreement as critical event – Leverage press, media and analyst coverage for outreach campaign within months of announcement – Piggyback on existing initiatives (AmCham, USAID etc.) – Partner with key stakeholders and lobby groups to create events around the FTA – Hire AR/PR agency & launch FTA Morocco event – Organize road shows to reach relevant “networks” • Target key opinion leaders, influencers, and decision makers – Develop direct and indirect networks of decision makers – Target key analysts and press – Develop success stories around successful cases: e.g. Dell case study in Morocco
  • 52.
    Target opinion leaders,influencers • Target key recommenders in the Press and Analyst communities • Involve recommenders in developing the Morocco “brand” – Message testing – Develop case studies, business cases jointly – Involve key analysts in key Morocco-sponsored events (e.g. Marrakech Outsourcing World Congress) • Example: – Michael Doane, Vice President & Service Leader, META Group – Julie Giera, VP and Research Fellow, Forrester Research – Michel Jon Janssen, President of the Supplier Solutions division, Everest Group – Martin J. McCaffrey, Executive Director software Outsourcing Research – Mark Kobayashi-Hillary, Consultant, Author, Outsourcing to India – Paul Gillin, Vice President of Editorial and Editor in Chief, TechTarget – Stuart Robbins Founder and Executive Director, The CIO Collective – Scott J. Nathan, Independent Outsourcing Expert/Attorney – Jeffrey M. Kaplan, Managing Director, THINKstrategies – Laurie McCabe, VP and Practice Director, Summit Strategies – Other analysts: IDC, Gartner Group, Telechoice, Yankee Group etc. – Other Press: www.lightreading.com, RedHErring, Fortune, Businessweek, the Economist etc.
  • 53.
    Leverage direct ANDindirect networks • Direct – U.S. company->Moroccan Company – U.S. company->Moroccan Company-> Arab World – U.S. company->Moroccan Company-> Europe • Indirect Model – U.S. company->Indian company->Moroccan company for “Francophone” Market – Other indirect would leverage countries with strong ”networks” in the U.S.: • Chinese, Canadian, Vietnamese , Israeli companies – EMEA/MENA branch of U.S. companies in Europe
  • 54.
    Building “proximity” through“networks” • Moroccan consulates abroad – Identify key executives in ICT abroad (technical directors, venture capitalists, finance executives in American and U.S.-based companies (vs. American companies) – Leverage indirect networks as well: • Moroccan in Indian, Chinese, Canadian companies • Moroccans in companies in Europe where EMEA/MENA decisions are decentralized in Europe • Moroccan school Alumni in the U.S. – AUI, Mohammedia School of Engineering, INPT etc. • Moroccan Alumni and professors from top U.S. schools – Important for technology transfer • Last but not least, U.S. residents in Morocco
  • 55.
    Consolidating “networks” • Createpermanent offices in key ICT locations – Possibly resort to bi-cultural commission-based “global sourcing” brokers/entities in: • Silicon Valley: San Jose, Santa Clara Sunnyvale, Palo Alto • Boston area: route 128 • Research Triangle Park (RTP) North Carolina • Richardson, Dallas, Fort Worth Texas • Create association peering across geographies – APEBI, ASMEX, CGEM and counterparts in U.S. • Events/Incentives: – Road shows – Outreach via discuss lists/newsletters – Specialized loans for investment back in Morocco/tax breaks for expatriates
  • 56.
    Create virtual &physical presence in key forums • Create Presence at key outsourcing venues – Examples: • Outsource World , UK • Outsourcing Strategies 2004 www.outsourcingstrategies.biz • Outsourcing in Telecoms www.iir-conferences.com/telecomsoutsourcing • IDC Outsourcing Forum: Improving Corporate Effectiveness Through Results-Driven BPO • Participate & contribute in key Forums – Advertise on key outsourcing portals: http://www.outsourcingcentral.com
  • 57.
    Thanks & acknowledgements •Key decision makers in the audience – Insight provided during one-one interview • The whole IESC team in Casablanca – Special thanks to • Mr. Elbouchikhi, ICT Program Director • Mr. Bensouda, Executive Director THANK YOU
  • 58.
  • 59.
    Time, Technology Life Cycle (substitutionetc.) Technology Adoption Rates per Geography Innovation (value creation) Technology Advancement Value …and to whom? What is “Value added” ?
  • 60.
    Example: Cultural Proximity DimensionU.S.A (ICT) Morocco Culture - individual Low context - wysiwyg High context – gesture, body language important Culture Legalistic, SLA, contract Based on trust, reputation Culture Individualistic Importance of group, family ,enterprise Decision making process Rational, based on key metrics, decentralized Risk taking encouraged Centralized (rank) Risk averse/high cost of failure Time Time horizon Monochronic Weeks/quarter Polychronic Days/weeks Approach vis-à-vis problem resolution Tackle first – very pragmatic Emphasize analysis upfront Approach vis-à-vis strangers Friend until proven otherwise Enemy until proven otherwise Business approach Spontaneous, direct Referral/go-between important – reputation etc. Communication style Straightforward, centered around issues – “straight to the point” Context sensitive, centered around people, harmony Structure of organizations Flat, Matrixed Hierarchical, Pyramid
  • 61.
    U.S. Market: Dropin Investments • Venture Capital Investments dropped more then 50% since Q2 2000 Source: Red Herring, Ernst&Young , VentureOne
  • 62.
    Math & Scienceaverage literacy scores
  • 63.
    Average size ofcompanies visited 7% 33% 47% 13% 0-5 employees 5 to 15 16 to 25 25 +