SA: Future leader in technology offshoring

Technology offshoring to a destination like South Africa offers international players both cost-effectiveness and access to high-level skills, along with time zone and cultural similarities.

Johannesburg, 31 Jul 2023
Matthew Butler, CTO, Entelect.
Matthew Butler, CTO, Entelect.

The outsourcing of technology services such as software development, data management and general information systems maintenance has become increasingly popular in recent years. It does, after all, enable global enterprises to enjoy various IT services at a reduced cost, while nonetheless accessing the kind of specialised skills that allow them to focus on their core business.

The key benefit of such an approach, states Matthew Butler, Chief Technology Officer at Entelect, is that it offers these businesses a much more flexible capacity for projects. It also provides access to talent that can be difficult for the business itself to source, as well as potential cost advantages for technology providers, as in certain markets, local talent or vendors can be expensive.

“There are numerous factors impacting your choice of offshore destination, but cost is inevitably one of the major ones. The challenge often lies in striking a balance between the skills that can be accessed and the price paid for these. The right partner will ideally offer further benefits, such as alignment with your ways of work. Business culture and ethics are also key,” he says.

“At the same time, you want your offshore partner to offer critical thinking and challenge the status quo. It is important, especially regarding engineering teams, for them to have the ability and access to contribute suggestions for better products.”

Butler adds that when sourcing an offshore technology partner, there are certain specific qualities that tend to appeal to the customer. These include the outsource destination having a similar language and culture, and its retention or attrition numbers.

“From a South African perspective, although we are not the cheapest destination, we make up for it via our work culture, which is familiar to most of the Western world, along with operating in a relatively convenient time zone.”

He notes that with a strong affinity to Western culture and markets, the South African software engineering workforce focuses on being intuitive, critical and collaborative. Moreover, South Africa’s software development costs are lower than most developed markets, but this cost saving – crucially – does not result in a poorer quality of service or output quality.

“We are of the opinion that South Africa has a unique offshoring value proposition, in that it can deliver high-quality software development at a competitive price point. The country also has a growing talent pool with an increasing number of people going through software development training at grassroots and tertiary levels, at globally accredited institutions,” he adds.

“Once you have found the ideal partner and begun an offshoring contract, there are numerous longer-term benefits that will become obvious over time. These include better long-term stability in software implementation and happier permanent staff members who enjoy working with a highly capable team offshore.”

Butler suggests it is possible to find partners who can ‘plug in’ to an existing technology delivery capability, contributing in exactly the same way – but which also bring fresh ideas to improve your own capability.

“Don’t forget your offshore partner can offer perspective and experience from other projects they have delivered elsewhere and can be very useful as a way to learn about other practices, processes or technologies that may apply in your own circumstances.”

“Good partners will find the balance between displacing an existing culture and fully adopting it. Ideally, you want a partner that will accept things that are there for a reason, or are very hard to change, but will also offer ideas and energy for all of the gaps and opportunities that can improve quality, delivery, culture or processes,” he continues.

Ultimately, offshoring is critical because it is about helping a client to solve complex business problems through technology, by delivering in remote and distributed environments, with zero compromise on collaboration and engineering quality.

“SA is already well-known as an excellent place for business process outsourcing. There are highly accomplished call centre operators here, with a good reputation – and for similar language, personality, culture and time zone reasons.”

“Entelect believes we can easily extend this argument into the highly-skilled technology arena. Software engineering education and capabilities in South Africa are increasing rapidly, and – added to the existing cultural and time zone benefits – enables us to position our country as the technology offshoring destination of the future,” concludes Butler.