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SA outsourcing to experience upswing

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SA's business process outsourcing (BPO) market is well positioned to take advantage of major shifts in the marketplace over the next five years.

This is according to Kobus van der Westhuizen, country head at Aegis Outsourcing SA, who says there is business worth more than £1 billion from the UK alone that SA can take advantage of during this period.

There has been a significant increase in investments in the outsourcing sector over the past few years, he notes, adding that five of the world's 10 largest outsourcing companies have operations in SA, and there are more in the pipeline.

According to an Everest Group survey done last year, SA was placed among the top three offshore locations where service providers intend expanding their global footprints. Van der Westhuizen says the reason for this was SA's strong macroeconomic fundamentals and its stable socio-political environment.

He also believes that SA's renewed attractiveness as an offshore destination is largely due to the combination of improved telecoms infrastructure and a government subsidy scheme. This makes the sector more competitive globally than it was before, he says. Additionally, the subsidy scheme decreases outsourcing costs by up to 50% in comparison to a UK outsourcing operation, he says.

The outsourcing market in SA has matured significantly over the past few years and has developed critical mass and experience in key industries, such as retail banking, healthcare and travel and leisure, according to Van der Westhuizen. He adds that the country's biggest selling point is its ability to add the next level of outsourcing services - i.e. higher-end judgement-based transactions, and the ability to actively enhance the customer experience - for some of the world's biggest brands. The ability of outsourcing service providers to act as virtual brand custodians is becoming a key differentiator in a highly competitive global market, he says.

Van der Westhuizen notes that he has seen the South African unit of his organisation double its business in the past two years, since being acquired by Aegis India.

However, besides major outsourcing markets such as India and the Philippines, SA also has to compete with emerging locations such as South America, the Middle East and Asia, he concludes.

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