http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.86Change: 0.18
R/$ = 10.95Change: 0.09
Au 1234.72 $/ozChange: -10.02
Pt 1263.00 $/ozChange: -7.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Mar 09, 2012

Bright future for Western Cape BPO sector

Back
Cape Town|Engineering|Africa|BPeSA Western Cape|Education|Ghana|Shell|System|Africa|Australia|Egypt|Ghana|India|South Africa|The Philippines|United Kingdom|United States|Insurance Brand|Oil And Gas|Service|Services|Utilities|Western Cape|Gareth Pritchard|Infrastructure|Operations
Engineering|Africa|Education|Ghana|Shell|System|Africa|Ghana||Oil And Gas|Service|Services|||Infrastructure|Operations
cape-town|engineering|africa-company|bpesa-western-cape|education-company|ghana-company|shell|system|africa|australia-country|egypt|ghana|india|south-africa|the-philippines|united-kingdom|united-states|insurance-brand|oil-and-gas|service|services|utilities|western-cape|gareth-pritchard|infrastructure|operations
© Reuse this



The future of the business process outsourcing (BPO) sector in the Western Cape is bright, with a number of significant foreign investors from the UK considering South Africa and the Western Cape as an investment destination in 2012, BPO industry association BPeSA Western Cape CEO Gareth Pritchard tells Engineering News.

“These investments form part of a broader provincial government strategy of creating 10 000 offshore-related jobs by 2015, which we are on track to achieve,” he says.

Further, Pritchard predicts that fears of another global recession could drive the growth of the BPO sector this year, as businesses look at innovative ways to cut costs without sacrificing quality.

As outsourcing is seen as a tried and tested model, companies will look to BPO as a way to reduce operational costs in difficult economic times, says Pritchard.

“With increasing pressure on senior management to improve productivity, while still cutting costs, BPO enables organisations to focus on improving core competencies, while secondary functions, such as customer service, are outsourced,” he notes.

In the past decade, the Western Cape has played host to a number of major international brands including oil and gas group Shell and German airliner Lufthansa.

In the past six months, a British utilities company and a well-known UK insurance brand have set up operations in Cape Town and are set to be joined by a globally recognised mobile brand during the first quarter of this year.

Challenges
One of the major challenges facing the BPO industry in the Western Cape, and worldwide, is the pressure on outsourcing destinations to keep jobs onshore, says Pritchard.

“Since the 2008/9 recession, worldwide unemployment levels have not shown any real sign of improvement, placing further pressure on companies that are offshoring their customer service,” he explains.

A further challenge is the growing number of competitors from first-tier destinations like India and the Philippines, as well as from second-tier competitors, such as Egypt and Ghana, which compete more directly with South Africa.

As this competitive landscape grows, it is critical for the South African BPO industry to continue looking at ways to improve its offering to foreign investors, Pritchard notes.

Meanwhile, South Africa has a large pool of highly skilled agents; however, there is a shortage of quality team leaders, he says.

“BPeSA is aware of this and we are rolling out a new skills strategy, which will include a purpose-built academy specifically for the sector,” he adds.

Industry Growth
The biggest opportunity for job creation growth in the BPO industry lies in the offshoring market, says Pritchard.

“The BPO and offshoring industry is a multibillion-dollar sector responsible for hundreds of thousands of jobs worldwide.”

There are local jobs, however, a lot of these are transferred from other provinces thus creating new jobs for the Western Cape specifically, but not necessarily new jobs for the country, Pritchard explains.

Therefore, BPeSA is focusing on attracting new jobs from the offshore market, with a particular focus on the UK, which makes up a majority of the Western Cape’s BPO sector. It is also looking into attracting business from other destinations, such as the US and Australia.

Pritchard believes industry growth can be secured through continued support from the private sector, government, trade bodies, such as the Department of Trade and Industry (DTI), and industry bodies like BPeSA.

SA BPO Proposition
In reaction to the significant growth in the global BPO and offshoring industry over the past decade, South Africa has formulated a competitive value proposition built around five core areas.

The country is typically able to offer source destinations a cost saving of about 50%; however, this figure improves further for investors making use of the DTI’s national incentive scheme, says Pritchard.

This incentive pays investors up to R112 000 per employee for each job created and maintained over a three-year period, lowering the cost of outsourcing from South Africa to about £10 000 a year for each full-time employee.

In the Western Cape, there is also an additional telecoms incentive available, which provides new investors with free telecoms services for their first six months of operation, he adds.

“As telecoms costs form an important part of an investor’s cost basket, this initiative removes a lot of risk for new investors who are deciding whether to set up in the province,” he explains.

Further, the local industry will focus on promoting its domain skills to other countries.

Pritchard says its large pool of personnel with world-class experience in the financial, telecoms and legal domains enhance Cape Town’s mature domestic BPO market.

“Our tertiary education system produces a large number of qualified actuaries, chartered accountants and other specialists each year, while sector-specific programmes in banking and insurance also provide intermediate levels of skill, making the province a competitive service destination for these markets,” he explains.

Meanwhile, South Africa’s large pool of skilled English-speaking individuals to choose from, and rapidly improving telecoms services, both in terms of performance and cost, have further added to South Africa’s standing as a world-class service destination, he says.

The country is also well located to service the European market, given its time zones and its ability to offer cultural affinity to Western markets.

“These factors, combined with our world-class infrastructure, make South Africa and the Western Cape a highly attractive BPO investment destination,” Pritchard states.
 

Edited by: Chanel de Bruyn
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Western Cape Profile News
Effective energy management is showing significant cost savings at South Africa’s largest steel producer, ArcelorMittal’s Western Cape plant in Saldahna, says the National Cleaner Production Centre of South Africa (NCPC-SA). Energy savings were achieved at the...
INNOVATIVE DESIGN Cape Town has been voted as the World Design Capital for 201
The biggest growth potential or geographical dispersion of economic activity in the Western Cape lies in the Cape metropolitan area, and the adjacent Cape Winelands district, where 85% of the real value is generated through production, states the Western Cape...
The Western Cape has consistently outperformed seven of the nine provinces in South Africa in terms of average yearly growth from 2001 to 2011, according to trade, investment and promotion agency Wesgro’s 2013 report. The province’s economy averaged 4.1% growth from...
More
 
 
Latest News
MTN Group CEO Sifiso Dabengwa
Updated 5 minutes ago Mobile operator MTN South Africa has gained some ground in winning back customers during the quarter to September 30 after a delayed reaction to the price war last year saw the JSE-listed group fall behind its rivals. The group’s South African operation added...
Updated 41 minutes ago Photovoltaic (PV) microgrids are increasingly emerging as favourable off-grid power options for the electrification of rural settlements and remote industrial operations in Africa, largely owing to a continued increasing of the diesel price coupled with the...
Finance Minister Nhlanhla Nene
Updated 2 hours 45 minutes ago Economists saluted Finance Minister Nhlanhla Nene for containing state spending and debt in his first medium-term budget on Wednesday, but opposition parties faulted him for not doing more to stem waste. Wits economist Dr Kenneth Creamer said that with growth lagging...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
The broad-based black economic-empowerment (BBBEE) alignment process in the con-struction sector has begun, dur-ing which the sector codes of the Construction Sector Charter Council (CSCC) will be aligned with the revised Codes of Good Practice (CoGP), which come...
It is second time lucky for Toby Venter. Ten years ago he negotiated to buy the Kyalami racetrack, but “the deal did not materialise”.
Environmental solutions company I-Cat started construction work on its R22-million, 1 949 m2 environmentally sustainable office and warehouse facility, commissioned by I-CAT Environmental Solutions, at a launch event in October. The new sustainable I-CAT campus,...
IAN EVANS AirWatch file synchronisation and sharing system was initially designed for a large airline company
Effective file synchronisation and sharing across an organisation’s structures can provide the basis for robust mobile-device and document management while maintaining proper backup, version control and content distribution. These are the lessons learned by complex...
Hotel group Carlson Rezidor currently holds the largest hotel pipeline in Africa with 30 hotels and 6 300 rooms under development. The hotel group develops and operates Radisson Blu in the upper upscale segment and Park Inn by Radisson in the mid-market segment. With...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks