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May 17, 2007

VoIP Does Good

ShoreCap Exchange, a non-profit whose board I’m on, provides and helps fund technical assistance to microcredit institutions in developing countries.  At a recent meeting we heard the story of a successful engagement which was Skype-enabled.

The bank receiving assistance is in a remote Asian country. The particular assignment was beefing up the HR function.  The consultant we engaged realized that she couldn’t be successful without the full backing of the CEO. CEOs often (I was one) tend to regard HR as a necessary evil: it certainly isn’t a profit center and it often seems a focus for disagreeable issues.

But, the consultant pointed out in her presentation to us and her presentations to the client, that many problems in line departments are at least partially HR problems. Fraud for example, always a worry for any bank and a particularly acute problem in developing countries, can’t be addressed by procedures alone. A culture which doesn’t tolerate fraud needs to be constructed; hiring needs to support the antifraud effort; so does firing.

She had the ear of the CEO; she is an experienced executive coach; but she also had a problem. The implementation plan for strengthened HR serving a strengthening bank would take place over a period of almost a year.  She couldn’t afford to stay there for the entire year and we couldn’t afford to keep her there that long nor fly her back and forth.  Yet the difficult implementation would take much monitoring, coaching, encouraging, and problem solving.

According to the consultant, Skype was the answer. Lengthy traditional calls to this country would have been almost as expensive as travel to and fro. But Skype to Skype is free and Skype to landlines – especially when they called her in the US – is very cheap. She made a number of physical trips, of course; but she was also a virtual presence in a way that wouldn’t have been possible without VoIP.

In fact Skype seems to have become the preferred means of communication between ShoreCap Exchange, its consultants, and its clients.  I smiled each time I heard the verb “Skype” replace the verb “phone”.

The high cost of communication to and from developing countries has been one of the barriers to these countries developing faster. Often misguided government policies have kept the price of traditional calls high to protect government and/or phone company revenues even at a price to the overall economy. VoIP has made clear what the true cost of connecting people is absent monopoly tolls. Whether you think of VoIP as arbitrage against artificially high international phone rates or a nifty technology for reducing the actual cost of calls (BTW, it’s both), VoIP is breaking down barriers to economic development. Makes me proud to have been part of the industry.

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