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BPO growth could lead to better times for SA’s unemployed

July 20, 2012 • Features

Few industries within the current market demonstrate the level of growth that the Business Process Outsourcing (BPO) industry does – and this is significant in terms of domestic efforts to create jobs.

Kobus van der Westhuizen, Senior Vice President & Country Head of Aegis Outsourcing South Africa. (Image: Aegis Outsourcing)

This is according to Kobus van der Westhuizen, Senior Vice President & Country Head of Aegis Outsourcing South Africa, who says the local BPO market has experienced an estimated 10,5% growth year-on-year.

He says that the rapid maturity of the local BPO industry and influx of large international BPO companies (four global businesses have established local operations in the last six months) to South Africa means the country is well positioned to create more jobs in this sector.

“Harvard Business Review referred to outsourcing as one of the most imperatives for business innovation in the future organisation. Non-core business processes should be outsourced to expert process providers.  Globally, BPO has grown significantly over the past 10 years, creating a sustainable industry on its own in countries such as India and Philippines, creating more than 2 million jobs,” says van der Westhuizen.

“In South Africa, BPO industry is employing approximately 200,000 people directly and indirectly, and is growing annually in double digits – one of the only industries growing at such a rate. In the Western Cape alone, BPO contributes an estimated R7.9 billion to the GDP,” he continued.

Global interest in domestic BPO space

Van der Westhuizen says the local industry has experienced a major market shift, driven by growth, maturity and consolidation – and focused interest by substantial BPO companies and investment in South Africa over the past two years.

“This market shift to only provided growth and job creation, but also provided maturity thorough bets practices. The local companies are also maturing at a rapid rate, thus making us very competitive as an offshore BPO location. The augmentation of the DTI subsidy grants further enhances the cost value proposition of South Africa, while our English language capability provides a unique value proposition to international markets. Bottom line, we provide good English voice based services, at a good price,” he says

Whilst international investors view South Africa as being a favourable destination with a lot to offer and the ability to sustain growth, the continent as a whole is seen as an emerging market with strong growth potential.

Although recent industry activity and development has been restricted to certain countries such as Egypt, Kenya and Morocco, van der Westhuizen believes the opportunity is clear for local and international BPO companies to play their roles in helping to grow these markets.

Part of the role involves what Aegis Outsourcing describes as “becoming brand custodians and sources of key Business Intelligence.”

“This is an imperative for growth,” says van der Westhuizen. “The South African culture lends itself to a strong customer experience. Our ability to have off-script conversations with customers, and strong empathy to help clients, is one of our key strengths to international investors. This is certainly a key performance area that we need to capitalise on in order to grow. However, productivity is still an area to focus on. Business Intelligence is a very important aspect of BPO. Again, South Africa has a strong technical capability that can be leveraged to provide inquire BI offerings to the market. In the customer service environment, a lot of customer behaviours can be accumulated to assist companies with product development, marketing strategies and business process enhancements, by just listening to customer behaviours as an example.”

In addition to the fact that BPO and call centre operations are positioned at the front-line of customer service and retention across a variety of industries, the environment has been transformed with the integration of technology.

Infrastructure is ever-evolving within the BPO environment, with the major drive being towards innovation and automation of process, business intelligence and self-service applications.

Van der Westhuizen also identifies social media and social CRM as technology-enabled growth areas alongside the influence of converged communications (device-to-device communications and video-enabled customer service).

Looking ahead, the prognosis for growth within the BPO industry, incorporating the evolving call centre environment, is good – and something the country should build on.

Chris Tredger

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