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Business Process Outsourcing and Offshoring (BPO&O)
Introduction
- Commonly known as the gateway to Africa, South Africa is
currently one the most sophisticated and promising players
in the emerging markets stable. Home to 6% of the continent's
population, South Africa produces approximately 18% of Africa's
GDP and boasts 45% of its mineral production and 50% of its
purchasing power. All of this has led to the domestic economy
recording strong and consistent performances in the post-apartheid
era.
- The BPO&O phenomenon has developed into a cutting edge,
knowledge driven economic sector, in which South Africa is
perfectly poised to play a leading role as more and more
multinationals look to enhance their strategic offerings in
a lower cost environment.
- In light of growing international evidence of the role of
BPO&O in stimulating economic growth, the government's Accelerated
and Shared Growth Initiative for South Africa (AsgiSA) has
identified it as an immediate high-priority sector. Both
government and the private sector look to the BPO&O industry
as a source of economic and employment growth.
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The South African Environment
- The Business Process Outsourcing and Offshoring industry
(BPO&O) is one of South Africa's fastest growing economic
sectors. Illustrating this is the call centre sub-sector,
which has been growing at about 8% per annum over the past
4 years and currently employs about 54 000 call centre agents.
- Most activity occurs within the call centre and back office
processing spheres, with more than 70 service providers serving
both local and offshore customers.
- South Africa is seen to offer a balance of high quality and
low costs as a destination for off-shoring business processes.
As an example one could typically expect annual cost savings of
approximately 50% in US$ terms in running a 1000-seat call centre
when compared to a near shore location such as Ireland, while
increases in resolution on first call rates are almost 30%
higher than a major industry player such as India.
- The country offers a large and well-educated labour pool with
over 300 000 new school leavers and 100 000 graduates entering
the workforce annually. Tertiary institutes are world class and
government support for continuous worker training and development
is substantial.
- South Africa is also a country with an emerging market-driven
economy that operates predominantly within certain developed
economy paradigms. The political and economic environment is
accepted as relatively stable in a country that holds its
democracy proudly after a dark past, while its constitution
and commitment to justice are highly respected on the global
front.
- World-class infrastructure supports all BPO&O investment in
South Africa. Excellent connectivity and a sound telecommunications
environment are coupled with property and electricity prices
that offer true value in an age of escalating infrastructure
costs. All of this in a country that provides a lifestyle that
is highly attractive to both locals and expatriates.
- A structural strongpoint of South Africa's BPO&O industry
is the quality differential of service levels within the industry.
Independent research has shown how South African centres are
able to match or even exceed quality levels achieved in competitor
countries within a short timeframe after establishment.
- Exceptional stakeholder ties within the industry has also
seen the adoption of a set of three new standards that address
operations within Inbound and Outbound Contact Centres and Back
Office Processing in the following categories:
- Leadership and Customer Service Management
- Human Resource Management
- Operations Management
- Technical Resource Management
- A major drawcard to South Africa as a destination of choice
is its distinct strength across several industries and service
lines. Target industries such as insurance, banking and
telecommunications are well developed in South Africa and have
long been sources of innovation and intellectual capital.
- Cultural and linguistic similarities, especially to key Western
markets such as the US and UK make the transition to South African
operation easy for both the
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Multinationals with BPO&O presence in South Africa
- The last few years have seen several global companies place their trust in SA's BPO&O
industry. These include (among others):
- IBM
- Fujitsu Siemens
- Lufthansa
- Virgin
- Sykes
- Lufthansa
- Avis
- Car Phone Warehouse
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South African BPO&O Investment Opportunities
- Call Centres
- Back Office Processing
- Shared Corporate Services
- Enterprise solutions in service lines such as fleet
management, knowledge management and asset management
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South African Film Investment Opportunities
- Film studio production
- Co-production ventures
- Distribution infrastructure
- Servicing of foreign productions
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Role of TISA Investment Promotion
- The Investment Promotion & Facilitation Unit of the dti -
This unit forms part of Trade and Investment South Africa (TISA),
a division of the dti primarily responsible for the attraction of
inward investment into South Africa.
- This is achieved by offering potential investors a point of call
where they can access a complete range of services: These include
the provision of information regarding the macro-economic position
of South Africa, the overall business environment, and the process
of investing in the country, as well as detailed sector-specific
information.
- Investment is further facilitated by the unit through the
provision of assistance in organising visits or participating
in events such as exhibitions in South Africa and in expediting
incentive applications, work permits and other documentation
required by investors. In addition to such services offered to
investors on an individual or collective basis, the unit is
also responsible for the packaging, promotion and implementation
of projects aimed at addressing identified investment opportunities
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Contact
| Contact Person |
Ms Pumela Salela
Deputy Director: Investment Promotion |
| Tel |
+27 (12) 394 1033 |
| Fax |
+27 (12) 394 2033 |
| Email |
psalela@thedti.gov.za |
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| Contact Person |
Ms Elizabeth Mtshali
Assistant Director: Investment Information |
| Tel |
+27 (12) 394 1333 |
| Fax |
+27 (12) 394 2333 |
| Email |
Lizziem@thedti.gov.za |
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References
- BPOeSA, (2006), BPO2SA South Africa's Value Proposition for BPO&O
- the dti, (2005), Sector Development Strategy: Business Process
Outsourcing and Offshoring
- the dti, (2006), Geared for Growth
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