South Africa has a window of opportunity for capitalising on its premium branding in business process outsourcing (BPO) but input costs have to be reduced, according to Peter Drube, Computer Sciences Corporation SA`s (CSCSA) BPO director.
The concept of overseas corporations setting up various BPO operations - mainly call centres in the Western Cape - is becoming increasingly popular.
Almost a month ago, former president Nelson Mandela presided at the announcement that UK insurance group Budget would make a R100 million investment in setting up a Cape call centre to support its sales and client support operations in the UK.
CSCSA, which started its operations about two years ago, decided to first attract the back-office business and then slowly move into providing other services such as call centres. The company employs about 200 staff in the Western Cape and Gauteng, and plans to employ up to about 1 000 people as it expands services to US and European countries.
Factors influencing a company`s decision to locate its call centre operations in the Western Cape include cultural and time zone compatibility with a number of European countries, a foreign exchange differential, and an educated workforce.
Unit costs per country
"There is no doubt that this country is highly competitive in terms of the outsourcing of call centres and BPO services," Drube says.
According to CSCSA`s calculations, for every $1 of resource (such as personnel and equipment costs) in the US, the equivalent expenditure in SA is about $0.48 and in India it is $0.36. However, SA`s advantage is that it has a highly productive and adaptable workforce.
The price of bandwidth continues to be the biggest single cost factor for CSCSA, Drube says.
"Being part of the CSC worldwide operation, we can see unit costs per country quite clearly and SA is a premium site. This means government has to do something or we will lose our window of opportunity," Drube says.
CSCSA supplies back-office support for life and annuity companies in the US and is starting to do some work for UK healthcare companies. Drube expects to see an expansion into the banking services and short-term insurance industries over the next few years.
"Our US principals gave us six months to achieve 40% equivalent of US productivity and one year to achieve 100%. We met all goals within two weeks," Drube says.
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