S.A Courts BPO Market
Outsourcing hoping to cash in on business process outsourcing (BPO), SA is increasingly courting US and European multinational businesses. Analysts in Africa say that though the BPO market on the continent is still in its infancy, it is poised to take off, especially in South Africa.
"I don't believe that the industry has got off first base. However, I do believe that 2007 will see SA firmly established," says Albert Rossouw, who runs the BPO consultancy Strategy Threesixty in Cape Town. Positive signs, says Rossouw, include the establishment of government grants and deregulation of the telecommunications industry.
Other factors include SA's accredited training efforts, large unemployed talent pool and time zone position. This makes it a near-shore destination for the UK and other European countries since business hours overlap, and an overnight services provider for the US.
"Lufthansa services all of its US clients from Cape Town, "says Luke Mills, executive director of CallingtheCape, a regional trade association. BPO is usually call centre and data processing work, but South Africans expand the definition to IT services like programming. S.A's BPO industry employs 80 000 people, the vast majority in "captive" centres for national businesses.
Probably fewer than 5 000 serve foreign businesses, says Craig Reines, GM of TeleTech Holdings, a US outsourcing services provider that is setting up facilities in South Africa. Until now, most outsourcing work has been done by local firms, Rossouw says, but look for more examples like TeleTech and US based Sykes Enterprises, with a 250 to 300 seat call centre in Johannesburg that services UK and German clients.
Among the hurdles the country faces are high (though decreasing) telecom rates, government red tape for investors, and a lack of office parks and business continuity facilities, Rossouw says.
Issue date: 01/07/2007 | CIO Africa
