Cape Town, 25 May 2016
The business process services (BPS) industry is one of the lesser known yet one of the fastest growing industries in the country, contributing approximately R50 billion to South Africa's gross domestic profit. Employing over 215 000 people across the country, the industry has the unique potential to significantly increase this figure and contribute to job creation in the short to medium term.
In the past, BPS, which involves contracting the operations and responsibilities of a particular business function to an external service provider, was largely associated to only the delivery of customer contact centre services in SA. However, the local industry has since evolved to offer a number of more sophisticated processes, including finance and accounting services, human resource services, analytics, and even legal process services, among others.
South Africa has established itself as a global destination for quality BPS, largely attributed to the high standards of customer interaction services delivered to international markets. The solid reputation built as one of the world's leading customer service locations is being expanded on through the addition of more complex back-office processes, which have already started to move South Africa much further up the value chain.
This ongoing development is positive news for potential foreign direct investment into the South African economy.
Johann Kunz, Managing Director of WNS South Africa, a leading global business process management company, says SA's first-world infrastructure, readily available skills and talent, government incentives and a favourable exchange rate is what appeals to international businesses and distinguishes it from other off-shoring locations. "Most importantly, South Africa has access to a large talent pool of skilled resources who can deliver a distinct quality of service," says Kunz.
Many international companies have started using SA as a base to fulfil more complex back-office processes. A mature domestic financial services market, where over 200 000 people are employed in back-office roles, has been a key driver to this shift. In addition, South Africa also has a high quality tertiary education system that has helped to create a sustainable talent pipeline in areas such as law, finance and IT.
Kunz explains that large international BPS players, like WNS, have identified these attractive factors unique to South Africa and are committed to selling the country as a destination for business services to organisations across the world.
"The core objective of business process services providers is to deliver process and cost efficiencies for a particular organisation. In order to achieve these efficiencies, it makes sense for companies to look at finding a suitable destination for a particular service or process outside of the country in which it operates - thus creating new jobs in South Africa for local South Africans," adds Kunz.
WNS was a pioneer in establishing the business process outsourcing industry in SA in the early 2000s. The industry was born from delivering customer contact services in a captive capacity for a number of insurance, telecommunications, utilities and retail companies based in the UK. The superior level of service delivered from SA quickly caught the attention of large-scale business process outsourcing providers. A gap in the market was identified and subsequently filled by establishing South Africa as an offshore business process location. Since then, the industry has thrived and experiences rapid growth year-on-year.
The South African BPS industry continues to thrive and develop based on the strong public-private partnership currently in place. "Through the prioritisation by the Department of Trade and Industry as a sector for development, together with the large-scale investments made by both operators and their clients, the business process services industry in South Africa is geared for long-term growth and most certainly has the potential to significantly boost the country's economy while continuing to create sustainable employment opportunities for many South Africans," concludes Kunz.
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