Business Process Outsourcing and Offshoring (BPO&O) is a major global trend and the industry, worth an estimated US$130-billion a year, has an expected annual growth rate of about 50% for the next five years.
BPO involves relocating business processes that a company usually performs in-house to a third-party service provider, such as a customer care or call centre, to carry out on behalf of the company. Outsourcing becomes offshoring when the third-party service provider is located overseas.
The BPO industry’s focus sectors include financial services, insurance and telecommunications, with outsourced processes including after-sales services, data capture and conversion, accounting, benefits administration, human resource functions, and website design and development.
Several factors which played a key role in establishing India as an outsourcing destination are already present in Africa, especially South Africa. A population fluent in spoken English (close to 5 million), cultural affinity and a sizeable talent churn from quality universities (160,000 graduates per annum and close to 410,000 personnel capable of working in the BPO sector annually), aided by time zone similarities, are helping South Africa become the next outsourcing frontier.
Outsourcing/Offshoring to South Africa by many European countries provides them with substantial cost savings, to the tune of up to 40-50%. Outsourcing services delivered from South Africa are positioned as a desirable alternative to onshore delivery centres, while also offering revenue generating services to its clients.
Business Process South Africa (BPESA) recently wrote that South Africa’s global business services grown consistently over the last 25 years to a point where there are over 64 000 internationally-focused workers servicing consumers and businesses in major global markets. As at 2019 the export revenue of the global services market in South Africa was estimated at over $1.1 billion (R15.3 billion), a 0.32% contribution to the country’s GDP.
MULTINATIONALS WITH BPO&O PRESENCE IN SOUTH AFRICA
The last few years have seen several global companies place their trust in SA’s BPO&O industry. These include (among others):
IBM
Fujitsu Siemens
Lufthansa
Virgin
Sykes
Avis
Car Phone Warehouse
MTN and Vodacom.
BPO INCENTIVES
DTI has an incentive scheme specifically aimed for the benefit of international call centres establishing in South Africa. The incentives on offer include:
- A base incentive, which is a two-tier differential incentive for non-complex jobs and complex jobs. This is based on the Rand value per job determined by fully loaded costs. The base incentive is a 5-year operational expenditure grant that tapers down over time
- A graduated bonus incentive is also available for entities with higher job creation and sustainability figures
- There is also the Monyetla Work Readiness Programme which was designed to support the growth of the industry though work-readiness training and placement for entry level agents.
The incentive programme is one of the elements of a holistic value proposition to position. The BPO&O Investment Incentive comprises an Investment Grant ranging between R37, 000 and R60, 000 per seat and Training Support Grant towards costs of company-specific training up to a maximum of R12, 000 per agent. The incentive is offered to local and foreign investors establishing projects that aim primarily to serve offshore clients.
INVESTMENT OPPORTUNITIES
Call Centre
Back Office Processing
Share Corporate Services
Enterprise solutions in service lines such as fleet management, knowledge management and asset management
Science and Technology Park
ICT incubation centre.
OPPORTUNITIES IN THE ELIDZ
There are multi-national companies in telecommunication, healthcare, automotive, finance, services by these call centre and they are in close proximity to ELIDZ
ELIDZ is located in a city with a large pool of skilled trainable labour force with good quality English
There are also native German and other foreign language speaker around East London who could be recruited for centres
First class infrastructure
Similar time zone to most of Europe
Excellent lifestyle
ELIDZ is located in an area with low rate of crime compared to other major urban centre.
- There are multi-national companies in telecommunication, healthcare, automotive, finance, services by these call centre and they are in close proximity to ELIDZ
- ELIDZ is located in a city with a large pool of skilled trainable labour force with good quality English
- There are also native German and other foreign language speaker around East London who could be recruited for centres
- First class infrastructure
- Similar time zone to most of Europe
- Excellent lifestyle
- ELIDZ is located in an area with low rate of crime compared to other major urban centre.