Computer Sciences Corporation (CSC) SA has secured a business processing outsourcing (BPO) deal with a US insurance company that will be worth R500 million over three years and eventually employ about 1 000 people.
The deal is believed to be one of the first of its kind in the Western Cape and possibly the country, which has been angling to promote itself as an ICT services hub.
Martin Vergunst, MD of CSC SA, says the deal will be implemented in several phases over nine to 12 months, with the last phase being the establishment of a call centre.
"It is also, what we hope, will be the first of a number of such deals and we expect to announce the securing of another later this year," he says.
The deal came into effect on 1 April and will be run out of CSC`s expanded premises at Canal Walk, Cape Town, where a back-office and call centre operation is being established.
First offshore contract
This is CSC`s first offshore South African BPO contract since the company announced a strategy to leverage its global financial services expertise and labour force to set a new standard for high quality, low cost BPO services.
Vergunst is responsible for CSC`s global financial BPO strategy in addition to his leadership role in the local operation.
"We need to make sure that this deal will work and so we are first implementing a high volume, low complexity type of operation and then increasing the complexity in stages," he says.
According to a statement issued today by CSC, its SA operations staff, along with existing CSC sites in India and other worldwide locations, will enable "follow the sun" processing and business continuity support for new and existing BPO clients.
SA gets the deal
CSC SA secured the deal ahead of other traditional BPO locations such as Ireland and India.
"SA proved to be better in terms of combining labour costs with culture similarities to the US. However, the high cost of bandwidth did reduce our edge somewhat," Vergunst says.
He says SA also has a strong financial services background, which is important for a deal such as this. Key to the deal was this country`s pool of English-speaking IT and business people skilled in insurance back-office processing and management.
"Ireland has been strong on the generic call centre, while this deal required a more specialised financial approach. Furthermore, because of Ireland`s integration into the European Union, it has lost some of its cost-effectiveness as its prices are almost as high as the UK`s," Vergunst says.
He anticipates that offshore BPO for global financial services companies could bring CSC SA R1 billion in revenues within five years and create 1 000 new jobs.
CSC is a California-based firm that provides IT services-company systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. CSC is currently the Americas` largest insurance business process outsourcer, responsible for over 4.5 million insurance policies and annuity/pension contracts.
The local company began operations in 1999 and is headquartered in Cape Town, with offices in Johannesburg and Durban.
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