Following significant investments from key industry players and renewed focus on the sector from government, South Africa has emerged as a global destination of choice for Business Process Services (BPS).
“In an unprecedented and seminal moment for the market, a sitting president specifically mentioned the BPS sector in a State of the Nation Address,” comments Kabelo Makwane, MD for Operations at Accenture in Africa.
“President Ramaphosa’s commitment to ‘focus on the export of manufactured goods and trade in services such as business process outsourcing and the remote delivery of medical services’ should attract significant global business to the sector.”
Global companies traditionally favour locations in the east like India and the Philippines as BPS destinations, due largely to the large pools of skilled, English-proficient workers and the labour arbitrage opportunities offered by the regions’ cost competitiveness.
However, South Africa’s BPS industry stakeholders have made significant efforts to develop and promote hubs of competency within the major economic regions of Gauteng, the Western Cape and Kwazulu-Natal. These efforts have yielded compelling results, with the local BPS industry growing 22% annually over the past four years, according to research by Everest Group, which is twice the global industry growth rate.
“South Africa’s BPS value proposition is predicated on multiple factors, including our well-educated and English-proficient workforce. Labour is also highly cost-efficient compared to other markets due to the relative strength of the rand,” elaborates Makwane.
The country’s favourable time-zone location in relation to European markets, and the cultural affinity that South African’s share with other English-speaking nations has also helped to boost the sector’s attractiveness.
These capabilities are supported by Africa’s most advanced ICT infrastructure, as the country boasts pervasive wireless and terrestrial connectivity, with multiple international undersea fibre-optic cable system links and a burgeoning data centre network.
Significant investments into fit-for-purpose BPS parks and delivery centres by both the public and private sectors have also increased capacity and scalability. Market-specific hubs of competency have since emerged within the local BPS sector, particularly in finance and accounting, human resources, legal and IT.
However, the market has progressed beyond the conventional approach of simply outsourcing non-core back-office functions to streamline and consolidate services. When we set up efficient BPS operating environments now, it’s about more than just labour arbitrage. In today’s context, BPS has evolved significantly in terms of how providers drive efficiencies and optimise the operating environment, mainly by leveraging advanced technologies.”
Makwane also believes that if South Africa hopes to realise President Ramaphosa’s ambitions of becoming a global BPS leader and raising ‘the sophistication of our exports’, which includes the quality of our outsourced services, the sector must leverage solutions that are driving the fourth industrial revolution.
“By effectively applying technology and digitalisation in the outsourcing arrangement to automate processes, access analytics capabilities to drive decisioning through data insights, or leverage applied intelligence (AI) – the latest evolution in BPS – to effectively augment professional capabilities, the local sector will more effectively bridge the skills divide that exists between the local workforce and workers in incumbent global BPS destinations of choice.”
Teachable AI agents can be employed to complete rudimentary, repetitive or administratively-onerous tasks that don’t necessarily add value but are nevertheless necessary. Applying industry 4.0 technologies in this manner frees human resources to focus on tasks that add the greatest value to the organisation or to clients.
Makwane adds that South Africa also struggles to compete purely on labour arbitrage, due in part to the country’s labour and tax laws.”Solutions that execute repetitive functions more efficiently than humans and enable operators to scale effectively to meet global demand will create the operational and cost efficiencies that allow local providers to compete more competitively on price.”
Investing in industry 4.0 technologies will also position the sector favourably to attract new business. “Large global enterprises in the automotive, logistics, courier and ICT sectors, for example, all face similar challenges when entering new geographies. They, therefore, require BPS providers that can set up critical front- and back-office functions at pace and scale. Any BPS provider that offers these capabilities will hold a distinct competitive advantage” suggests Makwane.
To assist BPS providers in this regard, Accenture has launched SynOps, an innovative human-machine operating “engine” that helps organisations to reinvent business processes.
“SynOps is an assembly of Accenture’s talent, expertise, experience, capabilities and technologies, including AI and advanced analytics. The solution can be deployed rapidly to meet any business case with a fit-for-purpose and flexible roadmap for achieving higher levels of efficiencies across the enterprise. SynOps creates flexible, agile and responsive organisations and helps them generate additional value by driving growth and scaling operations,” explains Makwane.
SynOps harnesses data and insights from more than 1,000 Accenture client engagements and hundreds of years of cumulative expertise across business functions, industries and domains. The company then combines this with data from clients’ existing systems and draws on external data to provide benchmarks.
Beyond these components, Accenture has also created a centre of excellence, which provides an environment to harness and drive innovation in an agile way by brainstorming and co-creating solutions to unique challenges through an iterative process.
“The result, in addition to a higher return on investment from existing IT systems, is greater insights that enable better decisions and business outcomes. This optimal combination of talent and human-machine work orchestration with advanced analytics enables organisations to reinvent business processes and achieve intelligent operations across key functions such as finance and accounting, marketing and procurement.”
While Makwane admits that employing technology won’t solve every challenge the sector currently faces, it will remove the most significant obstacles that currently constrain South Africa’s global competitiveness.
“By offering a more compelling value proposition beyond just cost savings, South Africa’s BPS industry will create opportunities to compete for global work from enterprises that want to outsource and scale using our labour force and available capabilities. This will ultimately establish the country as the global BPS destination of choice,” he concludes.