IT company Computer Sciences Corp (CSC) plans to mount its expansion plans from Gauteng.
The Gauteng Economic Development Agency (GEDA) says it's “thrilled” by the news, since the move would result in the creation of more than 1 500 jobs for the local IT industry with special focus on unemployed graduates.
CSC, with annual global revenue of $16 billion, plans to quadruple its staff complement in SA in the next 18 months and generate between 10% and 15% of its revenue in Europe, the Middle East and Africa (EMEA) from the local office within the next three to five years, according to GEDA.
Vivek Chopra, president for global applications at CSC, says the company is on a hiring spree, and intends taking on a large number of university and technikon graduates to support a rapid expansion of its presence in the country.
Strategic acquisitions of local IT outsourcing companies may also be on the cards at some point in the future.
“We are very open to anything that makes strategic sense, but we won't acquire just to get revenue,” explains Chopra.
Banking growth
The decision to focus on SA - and, in turn, sub-Saharan Africa - is part of a global CSC growth plan to expand its presence on the continent.
The company first invested in SA in the late 90s, after a contract win from Old Mutual.
It now says it is targeting the financial services, mining, telecommunications and transportation sectors, and is close to signing a number of significant new deals.
Peter Drube, MD of CSC SA, says the company regards the financial services sector, especially banking, as perhaps its key growth area in SA.
He explains that in this sector companies have large investments in legacy systems, some of which are 30 or 40 years old and maintained by an ageing workforce.
CSC believes there is a big opportunity to help banks move to more modern systems, allowing them to develop unique products that can be rolled out more quickly to the market.
Market gain
The investment comes on the back of the conclusion of an empowerment deal that has seen Amabubesi Capital - part of the Amabubesi group co-founded by Vodacom chairman Peter Moyo - take a 30% equity stake in CSC's SA subsidiary, says GEDA.
Drube says the Amabubesi deal has changed the company's empowerment credentials and this bodes well for future business, noting the recent loss in its bid for the Old Mutual outsourcing contract, of which CSC was previously the incumbent IT service provider.
“The [Amabubesi] deal has clearly opened the market significantly for us.”
He adds that CSC will raise its profile in the local IT outsourcing market substantially in the months ahead, as it seeks to win market share from both local and multinational IT outsourcers operating in SA.
In 2007, CSC was conducting a BEE transaction with a consortium led by Lechabile and Digital IQ. However, this deal was not successful, according to Drube.
New gold
CSC has about 350 employees in SA and wants to expand this number to between 1 200 and 1 500 to support its growth plans.
It has already begun hiring, and is working with GEDA to help it identify and recruit IT graduates.
“We are very much excited to be working with CSC as their work fits into the provincial plans of making Gauteng a smart province and a hub of the country's Information and technology industry growth prospects,” says GEDA project manager responsible for business process outsourcing (BPO) and ICT Linda Ranieri.
She adds that GEDA has over the years facilitated over R15 billion worth of foreign direct investments into the Gauteng economy with more than 40% of this coming from the BPO and ICT sectors.
“This is our next gold and we are doing everything in our power working with industry bodies to harness and nurture this potential.”
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