SA must develop a unique business process outsourcing model (BPO) if it is to compete with other countries that already have established track records, says a report released in Cape Town.
While this country does not have the BPO track record of established players such as India, it does have several key advantages, including cultural similarities, common time zones and political stability that may help it become more attractive.
This is according to a study released today by the Cape IT Initiative (CITI). The report, called "The Market for Business Process Outsourcing in the Western Cape", was compiled by Infonomics SA and Shoretgec International, and the Western Cape Development Agency, Wesgro, funded it.
The CITI report says cost is not the only driver for a company to take its BPO services offshore. Other drivers include access to more effective business premises, access to world-class technology, the ability to refocus management skills on the core business, access to scarce resources utilising the supplier`s resource base, and the opportunity for a long-term reduction in costs.
The Western Cape is second only to Gauteng in attracting international BPO corporations, which are seen as the vanguards of the industry. The study interviews 11 such corporations, including Computer Sciences Corporation, Tasc Administration and 3iSolutions.
These respondents cited that a primary strength of the Western Cape was a well-educated and stable labour force, many of whom have been trained in the insurance industry already. All the respondents said they were planning to establish their Western Cape operations through aggressive marketing overseas.
Call centres were another area where the Western Cape could compete competitively. CITI`s study quotes another report, the "Mital Call Centre Country Report on SA", which states that the South African call centre market was "fully comparable in sophistication and size with EU-member markets".
The Mital report says the SA call centre industry had suffered from under-exposure in the international marketplace. It also favours Cape Town over other centres as the best location to set up call centre operations.
The CITI report says weighing against the establishment of a strong BPO industry are high telecommunications costs and the fluctuating rand exchange rate.
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