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Industry Research : Why Big Businesses Want their Call Centres in South Africa
CAPE TOWN, Dec 19, 2012 -- South Africa, and the Western Cape in particular, has distinguished itself as a destination of choice for global contact centre industry. The country is now recognised as a viable alternative to world leader, India, according to a study released last month by the London School of Economics.
Government and the local business processing industry have been selling SA as a destination for over a decade, however high telecoms costs meant the country was slow to realise its potential.
With telecoms costs having fallen by 90% since 2003, driven by a significant investment in infrastructure, SA can now provide a competitive offering - though it will never be a "cheap" destination.
What is really setting SA apart is the quality of its call centre agents; their cultural affinity with markets such as the UK; a good pool of European language speakers and strong, proactive government support. "Quality and value for money are becoming the x-factor for companies looking for an offshore destination," says Gareth Pritchard, CEO of Business Process enabling South Africa. "SA is 15% more expensive than India, but companies are recognising that cheap is not the be all and end all. Customer satisfaction with the call centre experience is a big factor."
The industry has created 14 000 jobs, and has shown 18% growth year-on-year between 2010 and 2012. The vision is to create an additional 30 000 additional jobs by 2015.
Roughly half of these jobs are in the Western Cape, followed by Gauteng and KwaZulu-Natal.
The presence of big brand names in SA has made other big organisations sit up and take note. Global call centre providers are also entering the market so that they can provide their clients with an alternative to the incumbents.
"Our industry may not be as big as those in India or the Philippines," says Pritchard, "but people are talking about SA in the same light. We are now top of mind as an offshoring destination."
Government incentives have made a big difference. For every job a foreign call centre creates above 50 people, government will pay them over three years. "This is giving the industry the momentum it needs," he says. "Government has recognised that is the way to attract investors."
Much of this momentum has occurred in the past 18 months, according to academics from the London School of Economics which compiled a report on "SA’s BPO (business process outsourcing) Service Advantage".
It notes that SA has become the latest "go-to" destination. While India remains the undisputed industry leader, SA, the Philippines and Poland are a tie for second place. Three years ago SA did not feature. Part of this success stems from highly effective government, industry and investor collaboration.
At the moment 99% of the call centre work is bog-standard customer care of the "my PC doesn’t work", variety. However according to the report the industry is well placed to move up the value chain towards the provision of financial services or legal processing.
To do so the industry must manage supply to meet the demand. Skills programmes, initiated by industry and supported by government, are already in place. So far 4 500 learners have been trained. The third phase of the programme, which runs between April 2012 and April 2013, targets 3 000 learners.
Perhaps there are opportunities for some of those school leavers about to hit the streets.
Posted by Veronica Silva Cusi, news correspondent
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More Editorial From London School of Economics
Published: Monday, December 17, 2012