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Industry Research : Call Centres Make Gains from India’s Weaknesses
South African entrepreneurs are taking advantage of the gulf left by weak and failing call centres in India, according to Cape Town-based Full Circle SA.
Full Circle claims its business process outsourcing model could create up to 30000 jobs over the next five years.
"It is fairly well documented that outsourced call centres to India are on the wane as cultural or language … barriers often translate into eroded brand equity as the customer service element falls down," spokeswoman Rachel Irvine said yesterday.
The Department of Trade and Industry has earmarked business process outsourcing as a source of entry-level work opportunities, with the potential to create 100000 jobs and contribute up to R1bn to SA’s gross domestic product.
In its industrial policy action plan document, the department said that in 2004 the global business process outsourcing industry was forecast to grow at 50% a year over five years, resulting in growth of between $50bn and $60bn. This presented a window of opportunity for SA to realise significant value by developing this sector of the economy.
The government’s new National Development Plan aims to create 11- million jobs by 2030, many of them expected from small businesses.
Alexander Overtoom, a founder of The Hub, which provides internet access and office space to entrepreneurs in the social housing field, told a meeting to mark global entrepreneur week in Johannesburg on Tuesday that they often found tenders went to big businesses.
"There is much red tape for entrepreneurs. It is not easy to get bank loans and support if your idea does not fall within industries that investors are comfortable with in SA. The Hub looks at unconventional ideas," he said.
Full Circle believed it had got around the red tape, Ms Irvine said. It had created a "model office" concept which let international companies test whether they liked the idea. She said Bloomberg and Amazon had implemented the model and had recognised that outsourcing call centres to India was not as effective as had been first believed.
In the current economic climate, large corporations in the UK, Europe and US wanted to outsource call centres to cheaper labour centres but were wary of repeating large capital expenditure "unless the fit is right", she said.
While conceding that the business process outsourcing industry had created about 10000 jobs in SA, South African Chamber of Commerce and Industry CEO Neren Rau said labour costs were too high for the country to be competitive.
"We missed the call centre boom and we are also left with labour laws which are very restrictive. New amendments want to limit temporary labour, but call centres often use temporary labour," he said.
Posted by Veronica Silva Cusi, news correspondent
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Published: Friday, November 11, 2011