With software development and support being so cost-effective in SA, more and more UK and US companies are outsourcing larger software projects to local computer companies - and now even the government is aiming to milk the situation in a move to create jobs, a move that is "incredibly good news for the local economy and the creation of jobs".
This is according to Org Geldenhuys, a director of Pretoria-based IT recruitment company, Abacus Recruitment.
Geldenhuys said trade and industry minister Alec Erwin is to visit the US to promote SA`s ability to provide back- and front-office functions to large companies in the US in an attempt to attract direct foreign investment.
"Erwin apparently aims to raise SA`s standing as a global manufacturer and office support centre. With business process outsourcing a pivotal part of the department`s electronic manufacturing services strategy, Erwin is determined to promote back-office functions like data capture and front-office functions like call centres. Indeed, the Department of Trade and Industry hopes to create an additional 100 000 jobs, just through call centre outsourcing, by the year 2005."
Geldenhuys said SA is able to run call centres as much as 30% to 35% cheaper than in the US because of the lower labour costs. "The comparative weakness of the rand against major currencies is also a factor," he said.
"While it may seem a bit far-fetched to create an additional 100 000 jobs within two years just by managing outsourced call centres, if the whole process is tackled diligently - and the right overseas companies are targeted - this could be a major shot in the arm for the local IT industry. Even 50 000 new jobs would be a significant boon. It is also all about a mindset change. South Africans are often negative about the skills level in this country and our ability to compete globally. But, in reality, although we are categorised as an emerging economy, we do have a certain amount of skills in IT that can place us on the global map and create wealth and opportunities. Part of this success will lie in actually realising this."
Geldenhuys said there is also a growing trend for US and UK companies to outsource software development and support work to local companies because of the relativity of the weak exchange rate against the pound and dollar. "Even though the rand has strengthened, we are seeing a growing number of overseas companies doing software development via local companies because the costs are reduced by at least 30%. This is also an opportunity that could be pursued more vigorously by local companies that have the necessary skills."
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