Dishing up the goods

South Africa has established itself as a quality, low-cost call centre destination. Despite ongoing challenges related to scarce management skills, high telecoms costs, a lack of overarching strategy and marketing plans, the country`s call centres are keeping a number of big international organisations very happy.

Although the location of AOL`s call centre in SA is one of the industry`s worst-kept secrets, the fact that the country hosts centres for UK retailer Asda, Virgin Mobile UK, Samsung`s European digital camera division and others, is a pretty well-kept secret.

IBM hosts a global delivery centre in Johannesburg, which employs 1 600 people. Opened in early 2006, the centre delivers technical IT support to more than 300 global and local customers; among others, Dutch banking group ABN-Amro, South African Breweries, Gold Fields and the City of Johannesburg. Budget Insurance has a centre in Cape Town, run by subsidiary Fusion Outsourcing Services, which initially employed 40 people and will employ 780 by the end of next year.

The Dialogue Group opened its first centre in Cape Town in 2003. It now has centres in Johannesburg and Durban and, says Dialogue Group CEO Jason Drew, employs 1 800 people. Dialogue provides call centre services to local and international companies, including the second largest motor insurer in the UK, a large local bank, a global tobacco company and a global satellite company. Dialogue has outsourced to India and the Philippines in the past, but opted for SA partly to reduce the risk of having all of its centres in one basket, says Drew.

Retailer Asda outsourced its call centres to Merchants in Cape Town when it ran out of space at its in-house centres. The centre in Cape Town was established in April 2005, with 45 colleague seats (Asda does not call its operators `agents`) and will have approximately 170 seats by December.

The Merchants operation currently supports Asda Home Shopping and Asda Flowers customers, taking and resolving queries and complaints relating to pre-and-post delivery of Internet-based orders. It is understood that the outsourced service currently being delivered by Merchants will be expanded to include additional Asda customer offerings.

At present, the centre handles approximately 1 100 inbound calls per month for Asda Flowers and in the region of 40 300 inbound Home Shopping calls per month.

South Africa is not the cheapest destination, but... we estimated that it offered better value

Matt Baron, head of external and internal contact centres, Asda

Says Matt Baron, head of all external and internal contact centres at Asda: "We chose SA because of the people. SA is not the cheapest destination, but from an overall quality of service perspective, we estimated that it offered better value. For a reasonable price, we`d get what we thought was a very good service equal to or better than the UK."

Baron says the company chose Cape Town over any other location in SA primarily because of its understanding of the retail culture.

"The jobs we were outsourcing were new positions," adds Baron. "We didn`t replace any UK positions with positions at Merchants in the UK or South Africa. It was an opportunity for us to reduce our costs when growing, rather than to do what a lot of companies do: replace UK costs and overheads with costs and overheads overseas."

South Africa may not be India or the Philippines when it comes to outsourced call centres or business process outsourcing (BPO), but the questions that have to be asked are: do we want to be? Does SA want to play with the big boys, enter into price wars and constant skills races? Alternatively, should we not rather be focusing on getting better at what we already do well?