SA – preferred destination of contact centre providers
The South African contact centre market remains highly competitive globally, employing 278 000 staff in 2019. Most of the contact centres in SA operate within the financial services sector, primarily located in Gauteng, followed by the Western Cape and KwaZulu-Natal.
In-house (captive) contact centres account for more employees than outsourced contact centres, although the latter is expected to experience increasing employment in the medium to long term. Most in-house contact centres are small, with approximately a third having fewer than 10 agents. In many instances, contact centre agents in small companies fulfil their functions only on a part-time basis.
South Africa remains a preferred destination for many contact centre operators, including offshore service providers, mostly because of the availability of highly skilled English-speaking talent. In addition, SA provides for significant costs savings, with cost operations being at least 50% to 60% lower than those in England and Australia.
The South African contact centre industry is currently experiencing significant transformation as more organisations adopt cloud-based contact solutions as part of their business operations. These include hosted, virtual and contact centre as a service (CCaaS) solutions. Some of the cloud-based technologies that have been in high demand are CRM systems, voice recording and cloud/VOIP phone systems. Despite this, a significant number of organisations continue to operate on-premises solutions due to concerns around security, risk associated with business continuity and industry requirements.
South Africa remains a preferred destination for many contact centre operators, including offshore service providers, mostly because of the availability of highly skilled English-speaking talent.
Restrictions associated with the COVID-19 lockdown have expedited the expansion of communication channels by contact centres. The work-from-home policy – also implemented by many contact centre service providers – is one of the key contributors to this development. Whereas historically communication channels have often been limited to mainly voice (including interactive voice response/IVR), e-mail and text messaging (SMS), more recently, a broader range of channels is seeing adoption. This includes various social media (Facebook, WhatsApp and Twitter as the main platforms), mobile applications and Web chat. Going forward, more organisations intend to adopt chat bots (intelligent automated agents) as well as one-way and two-way video. However, adoption of video technology is not expected to see significant uptake in the short to medium term.
Although the concept of hosted (cloud-based) contact centres is not new in South Africa, until recently, there’s been relatively little interest. This is starting to change, with around a third of organisations with on-premises contact centres interested in moving to a hosted contact centre solution in the next year or two.
A number of challenges are hindering faster adoption of cloud-based solutions by contact centres in South Africa. These include:
- Legacy systems that are not compatible with emerging technologies. Most contact centres have legacy infrastructure, including software, that has not been updated in a long while. This is also related to 'sweating of the assets’ – once an on-premises contact centre has been implemented and it continues to serve the purpose, replacement cycles are often very long.
- Applications lacking open application programming interface (API), making the existing infrastructure difficult to integrate with the new cloud-based systems and third-party applications.
- Limited budgets to implement cloud-based solutions, resulting in continued reliance on legacy, on-premises systems.
- Lack of adequate skills due to high staff turnover in the contact centre industry. This makes it more difficult for organisations to implement advanced technologies.
- Compliance with regulations related to data sensitivity and protection. Some companies feel that moving to a cloud-based system could present a risk.
Nonetheless, as user interaction with contact centres changes, most contact centre service providers will need to go through a technology transformation. This is becoming more evident with the younger generation of users, which prefers non-traditional channels such as social media and even video to an extent. Introduction of new technologies is also driven by the need to reduce operational costs.
The combination of changing user behaviour and the 'new normal’ is prompting contact centre service providers to consider changes to their operations going forward. The realisation that things will not remain as they were in the past has set in.