South Africa - one of the fastest growing destination for BPO projects

Wiktor Doktór, Pro Progressio: Rod, it was a pleasure to have you in the group of speakers of The BSS Forum, which took place just before Summer of 2021 and where you were discussing nearshoring and offshoring business opportunities for US companies. Together with industry experts from Canada, US and Colombia you had a very interesting discussion. I must say I enjoyed a lot listening to you. That actually made me think more about South Africa, where you are based, as a destination for BPO projects. Before we go deeper into this subject tell us few words about yourselfand your business activities, please.

Rod Jones, Rod Jones Consulting: For the past ten years I have operated independently as a CX, Contact Centre and BPO consultant, broker, industry analyst, blogger and at times serving as brand ambassador for various organisations focussing on building reputation and sales in the South African BPO and contact centre sector. I actually started my business in 1972, the year that the first known ACD contact centre was deployed in the US by Rockwell Electronics for Continental Airlines. By the early 80s I had set up my own contact centre as a communications hub for my customer club and affinity marketing support company. I then migrated into operating what I believe was amongst South Africa’s first BPO contact centres; a 200-seat operation located in Johannesburg. At that time – the early 90s, a few colleagues and I started the first call centre and BPO association in South Africa. In 2004 a partner and I formed what became a fairly large contract centre consulting, research, training, events and media business. I exited that business in 2010 and have operated independently ever since. With over 45 years of experience, my motto is “I help decision-makers to make good decisions about call centres, contact centres and BPO.”

Thank you for that. So, now I know I talk to a right person to get more details about South Africa as the business destination for BPO projects. Let’s touch some geography and logistics here – what are the main business cities in South Africa, which time zone it is and where are the international airports located?

With a land mass of 1.2 million square kilometres, South Africa is roughly twice the size of France and has a population of almost 60 million. The major business hubs are Cape Town (Population ±5 million), on the southern tip of Africa, Durban (Population ±3.5 million, located on the East coast considerably further north, and Johannesburg (population ±6 million) 1,500 kilometres North of Cape Town and inland from Durban by 500 kilometres. South African Standard Time (SAST) is GMT+2. Major international airports are located in Johannesburg, Durban and Cape Town, all offering direct flights to multiple destinations in the US, Europe, Asia and Australia.

BPO and IT industries very much focus on availability of talent pool. What is the potential of talent pool in South Africa. How many universities and graduated you have there? Also, when Call Contact Centre or multilingual BPO/SSC is considered – what is the languages availability in your country?

Currently South Africa has 26 major universities and in addition, many specialised tertiary education and training institutions and facilities. An estimated one million youth (18–35 years old) enter the job market annually. These are generally fluent in conversational and written English and speak with neutral accent and have high EQ/empathy levels. We also have strong cultural affinity with the UK, Australia, and increasingly, North America. In terms of outsourced and BPO contact centre services, whilst South Africa has an extremely large English-speaking workforce, only relatively small pockets of European and other international language agents are available.

We already have some view on people, so let’s go deeper – what are the salary levels in South Africa on the most popular jobs run in outsourcing or shared services industry. Is there a cost benefit for US or European or Australian clients?

South Africa offers major cost savings to source destinations such as Australia, the UK, and the US of in the region of 40–45% on a steady-state operating basis (fully loaded or including all overheads). This is supplemented by a raft of highly attractive incentives that operators can access through the Department of Trade Industry and Competition (dtic) and its specialist division, InvestSA. These incentives can potentially pay investors in this sector up to R290,000 (±$20,000) per new job created over a 5-year period and subject to certain terms and conditions.

To put South African BPO/GBS costs into perspective:

• BPO (typical voice-based contact centre operating costs) ~45% lower than Tier 2 UK, North American and Australian Cities.
• BPS/GBS (non-voice business processing costs) ~40% lower than Tier 2 UK and North American and Australian cities.

Thank you for this. Let’s come back to major scale of the BPO. How many BPO/SSC investments are there already in South Africa? How many people are employed in the industry and can you share some international brands of companies who run their operations successfully in South Africa?

It is widely recognised that the overall South African contact centre industry comprises of approximately 2,500 contact centres employing in the region of 300,000 agents and middle management. Of these, roughly 70,000 South African agents are employed servicing ‘international’ or offshore BPO customers. Many of the ‘big brand’ international BPOs have South African operations. Just a few examples of these include the likes of WNS, Startek, Merchants, Webhelp, Capita, Exigent, EXL, Mindpearl and Teleperformance. These are supplemented by a rapidly growing group of mid to large scale South African owned BPO operations such as IntelliBPO, CapabilityBPO, CallForce, Digicall, RewardsCo, Outworkx, SACommercial and iContact.

Rod, thank you a lot. I know you have written an e-book describing BPO in South Africa – what is within this e-book and where can it be downloaded from?

In April 2021, the globally recognised annual Ryan Strategic Advisory Front Office Omnibus Survey awarded South Africa the highly coveted accolade of being ‘The Most Favoured Offshore CX Delivery Location’. At that time, many in the global BPO fraternity wanted to know a lot more about why the South African BPO value proposition and the practicalities of operating BPO centres in South Africa that had led to our country receiving this prestigious endorsement. As a consequence, during May of this year I carried out a series of interviews amongst local and international experts and compiled my findings into my eBook, ‘Why Offshore BPO to South Africa’. I have made this publication a freely available download from my website at https://rodjones.co.za/bpotosa.

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