One of the biggest focus areas for businesses is going to be on improving business processes and this is an area - in terms of outsourcing business processes - that SA can excel in. But companies are selling themselves short and do not realise that they have the skills, infrastructure, good geographical location, and a stabilised economy to compete against global outsourcing giants such as India, said Eric Wadsworth, CEO of specialised business process outsourcer, eQuals.
"Business process outsourcing is growing into a huge market. In the US, alone, just the contact centre industry is currently worth $100 million per annum. A significant percentage of this is outsourced." Wadsworth said that purely from a geographical point of view, SA is able to cover the world in terms of time zones.
In the early hours of the morning it can offer services to Asia, Europe during the day and the US at night time.
"Our primary business language is also English and this enables us to deal with the majority of countries and companies. We are, as a country, better positioned than most to handle multi-cultural societies - and I believe at a higher level than countries like India, where quality of services is beginning to come under the spotlight."
He said one of the areas of concern, however, is our high telecommunication costs. "Unfortunately our telecommunications costs, thanks mainly to the fact that this market is still a monopoly - and costs are set too high by international standards - make it very difficult for companies to compete globally. India, for instance, has no voice over Internet (VOIP) restrictions, while in SA Telkom is fighting to keep VOIP illegal."
He said cost is a big factor in business process outsourcing (BPO) and if South African companies are hamstrung by burdensome telecommunications costs "all its other advantages could be nullified".
Wadsworth said that a lot of poorer Asian companies are starting to jump on the "outsourcing bandwagon". "Countries such as Mongolia and Bangladesh are starting to recognise what a big revenue spinner BPO can be. They are entering this market and competing on price alone. Although South African companies can offer a higher level of skills and services - something some companies will want - their price performance levels are going to be affected by high telecommunications costs. Or it will shrink their ability to earn good profit margins."
Mongolia, meanwhile, has shown its commitment to BPO by building a software park in the country's capital, Ulan Bator. The software park, according to a report in ContractorUK, a UK-based online publication, will provide accommodation for companies wanting to move into the outsourcing arena.
"The Mongolian government, in other words, is lending assistance to private enterprise to empower them to break into this market. They are not merely talking about assisting, they are actually giving assistance. This gives many companies a possible easier entry into a market that is going to produce huge revenues in the next few years. BPO is part of the true digital economy, where physical barriers and proximity become increasingly irrelevant."
Share