Though SA has high-quality telecommunications infrastructure, particularly with the new bandwidth lines, the country's business process outsourcing (BPO) industry is not yet fully matured to enable it to catch up with traditional outsourcing destinations such as India.
So says Jed Hewson, director of 1Stream, a local hosted contact centre solutions provider.
“But although there is no reason why SA can't become equally well known as a key BPO destination, we are not there yet,” he says.
A white paper, commissioned by British-based Teleperformance, found that 10% of all contact centre agents serving the UK will be based in SA by 2014.
However, Hewson believes the figure should be a lot higher, arguing that 'offshoring' does not carry the same negative connotations as it did 10 years ago.
“In fact, whereas UK customers were complaining about being put through to Indian call centres in the 90s, the industry since has upped its game to such an extent that they are now insisting on it - translating into an annual growth rate of 50% for the BPO industry,” he says.
“And considering, from an economic viewpoint, that the call centres outsourced to India alone has created 800 000 jobs, we should make a point of competing for a spot in that market.”
According to research firm SourcingLine's rating of countries based on their attractiveness as outsourcing destinations, using factors such as cost competitiveness, resources, skills and operating environments, India scored 7.1, Indonesia 6.9, China 6.4 and the Philippines 6.3. This compared to SA's 4.6.
Hewson points out that this is despite the fact that SA, in some respects, is more technologically advanced and better-equipped than many of the countries that garnered higher ratings - including Vietnam, Ghana, Lithuania and Jamaica.
“If we really aim to compete with other nations as a BPO destination, we need to turn the tables on the limitations we encounter. For example, when drilling down into the individual index scores for the top-rated countries, the Philippines has the highest cost competitiveness score by far - almost double that of India.
“In fact, price should be a significant deterrent to businesses wishing to outsource to India - renting Mumbai commercial space is nearly double that of downtown New York.”
He also points out that Indian companies have become more mobile - making increasing use of hosted platforms and cloud technology. This strategy, he argues, has ironically led to Indian call centres maintaining a competitive edge, without actually remaining in India - 13 of the largest Indian call centre companies have relocated at least part of their operations to the Philippines to take advantage of the cheaper real estate.
Hewson believes flexibility and economies of scale may be the key to drawing the offshore market to SA.
On the other hand, Karl Reed, chief marketing and solutions officer at Elingo, notes that SA has the potential to overtake the Indian outsourcing industry if proper incentives are provided to the industry.
In comparison with India, Reed believes SA sells itself far too short. “South Africa is a beautiful country with a lot of educated people on top of excellent infrastructure.”
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