5 Years Later, Nonprofit No Longer an Experiment

Jeremy Hockenstein never meant to start a business in Cambodia.

“I came on vacation to see Angkor Wat and one thing led to another,” he said Thursday.

Now, five years later, Digital Divide Data—the nonprofit information technology outsourcing company he helped found—has gone from an experiment in helping the disadvantaged to a thriving business.

“What started as a little project has become a model for international outsourcing,” the 35-year-old US national said.

DDD celebrated its fifth anniversary on Saturday. The firm started up in Phnom Penh in 2001 as a social enterprise that sought to improve the lives of individuals from difficult backgrounds: landmine victims, orphans, the physically disabled, rural migrants and abused women.

To this end, they were trained to use computers for outsourced data entry projects, primarily from businesses or institutions abroad. Workers spend six hours per day putting information into databases or typing up searchable, digital copies of archival material.

Workers are paid above the national average and are given scholarship money to attend school. Many go on to “graduate” from DDD after a few years. According to the company, the average monthly salary for those graduates, who find work after leaving DDD, is $153, several times the national average.

DDD began with only 20 people but has ballooned to around 200, with additional offices opened in Battambang town and Vientiane, Laos.

Revenue has climbed from $110,000 for the fiscal year ending in July 2002 to $399,000 for the fiscal year ending this July.

Last year marked the first time that DDD’s revenues covered operating costs without needing donations to make up the difference.

In the last three months alone, DDD has already brought in as much money as it did in the previous fiscal year.

The clattering of keyboards was almost deafening last week as nearly 30 operators vigorously typed away in one of the data entry rooms at their Phnom Penh office in Chamkar Mon district’s Street 360.

Along one wall, a team was creating a searchable, digital archive for the Jewish Telegraphic Agen­cy, a news organization.

Hockenstein eagerly pointed out one operator entering the text in English of a 1963 article about the Holocaust.

“We never dreamt it would get this big,” Hockenstein said as he looked out over the room.

Hou Pheakdey is in his third year at DDD and effusive in his praise for the company. His right leg encased in a brace that enables him to walk, he explained that growing up he had to rely on organizations for the handicapped, but now he can fend for himself.

“I began studying at Pannasastra [University of Cambodia],” Hou Pheakdey said, adding that he found it surprisingly easy to pick up computing skills—and his English is slowly getting better as well.

Now, far from being dependent on charity, Hou Pheakdey said he is actively working to improve the lives of others. As a staff representative, Hou Pheakdey helps coordinate fundraising with customers to assist the disadvantaged in Phnom Penh.

“I like my job,” he said. “I like to help other people around Phnom Penh that can’t get help.”

Hockenstein admits that DDD’s success was far from guaranteed when it first opened, and at the time, most people thought he was crazy.

“The social enterprise space is really new here,” said Luisa Perticucci, DDD vice president for business development. “Many [social enterprises] struggle with being completely financially stable.”

Tim Smyth, managing director for Indochina Research, agreed that historically these sorts of businesses have had difficulties, but said companies like DDD show that there is a viable model for business success.

“It depends in part on how dedicated management is to the business agenda or the social agenda,” he said. A lot of similar companies pay too much attention to their social mission and not enough to the business side of things, he said.

Hockenstein noted the controversy over outsourcing in the West, with some feeling that it amounts to stealing jobs from people back home. And others feel that it exploits underpaid workers in the developing world.

But by attaching the data entry outsourcing work of DDD to the goal of improving the lives of the disadvantaged in Cambodia, this alleviates some of the reluctance firms might be feeling, he said.

“People are attracted to us because of our social mission,” Hockenstein said.

DDD is currently looking to increase the amount of local and regional work it does, he added.

Smyth believes that the business environment in Cambodia has developed to the point where databasing and data entry services are sought after.

“There is a slowly emerging demand for that sort of thing,” he said.

Kunthy Kann, DDD country manager, said that the company has already been hired by several NGOs to make digital records of survey results and by telecommunications firm MobiTel to create and update a massive database of customer information.

“We have already entered three million records [for MobiTel] and we receive 2,000 more every day,” he said.

MobiTel spokesman David Spriggs said Sunday that MobiTel chose DDD because it is uniquely capable for a local firm—the social mission was merely an incentive.

“I’m not sure of anyone else who does that sort of work,” he said. “We are happy with them.”

Kunthy Kann said that DDD hopes to soon be taking on its highest profile commission to date.

The Extraordinary Chambers in the Courts of Cambodia has contacted DDD about creating a searchable digital archive of the thousands of Khmer Rouge-era documents on microfilm collected by the tribunal, he said.

ECCC spokesman Peter Foster said that any such decisions were in the hands of the tribunal’s procurement department and that no details on the matter could be made public at this time.

“We’d like to digitize as much of it as possible…but we are still searching for the most efficient method available,” he added.

Kunthy Kann said the tribunal has stated that it needs three estimates before making any decision. But he said he was optimistic that the job would come to DDD in the end.

“I cannot find anything else like DDD here,” he added.



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