Tag: South Africa

South African Business Process Services in Demand Due to Cost-Efficiency | In the News

A global recognition has just been handed to the South African business process services (BPS) sector. Industry analysts suggested that global demand for the country’s provisions is largely due to affordable prices.

Industry stakeholders have been promoting South Africa’s BPS sector as part of the scheme to lead investors into the fold and the plan includes providing cost-efficient offers, IT News Africa reported. Research from Everest Group revealed that the country’s BPS sector saw an annual growth of 22 percent for four consecutive years.

Read more in Business Times

South Africa Recognised as Global Destination for Business Process Service | In the News

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.

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.

Read more in IT News Africa

South Africa’s Booming BPO Industry | Sherpas in Blue Shirts

Countries across the world are currently grappling with and adjusting to macroeconomic and regulatory changes, the slowdown in ITO-BPO industry growth, and increasing concerns about the availability of relevant talent.

Business Process Enabling South Africa (BPESA) – which operates both as a specialist investment promotion agency for BPO, and as a national trade association and networking body for the industry, with a mandate to create jobs in South Africa – recently took a proactive approach to addressing these issues by collaborating with Everest Group to develop South Africa’s value proposition.

The Present

South Africa’s IT/BPS sector has grown exponentially over the past five years at a rate of ~22 percent – much higher than the global growth rate. Its value proposition for the industry has been closely linked with traditional English contact center delivery, mainly due to availability of talent with high levels of empathy with the end-customer. This remains its key strength and has evolved to provide a more multi-/omni-channel experience for customers. Concurrently, the rest of the IT-BP industry in the country has also evolved to provide a wide array of services that have spawned from its traditional strengths.

Global Services in South Africa

Take the banking sector, for instance. This has been one of the major areas of domestic growth in South Africa. And international companies are increasingly following suit by creating global delivery teams in the fields of asset management, life insurance, and fund accounting processes to service Australia, the U.K., and the U.S. from South Africa. Similarly, in the legal sector, South Africa has carved a niche for itself for contract drafting and management and document review work.

South Africa’s IT sector is providing some interesting solutions which are akin to digital services being delivered from more mature geographies. More than 60,000 students graduate with IT, engineering, and related degrees every year. This talent pool has proved valuable for major industry players. For example, Amazon developed its AWS cloud platform in Cape Town in 2005, and Accenture recently built its Liquidity Studio – which caters to providing client experience on disruptive technologies such as artificial intelligence, blockchain and cloud – in Johannesburg. Analytics is another function which draws stimulus from the contact center industry. Technology start-ups in this space are developing prediction models/algorithms to determine customer behavior; such sentiment analysis is proving to be valuable for upselling and renewing contracts with clients.

The Near Future

While South Africa will continue to be one of the primary locations of choice for English contact center delivery, it will also build capabilities in IT and more unique areas. It has already started to do so in the field of Edtech (such as offering gamified training) and providing English-language training to countries across multiple time zones. It is an exciting time for the IT-BP industry, and South Africa is well-positioned to cater to worldwide markets and create a unique proposition in companies’ global services portfolio.

Click here to get our detailed report on the evolution and growth of the BPO sector in South Africa, and an investor’s guide to South Africa’s competitiveness with other offshore/nearshore service delivery locations.

Accessing Relevant Talent is New Value Proposition for Impact Sourcing in South Africa | Sherpas in Blue Shirts

Earlier this year, Everest Group and The Rockefeller Foundation partnered on research in support of the Foundation’s Digital Jobs in Africa (DJA) initiative, the goal for which is to demonstrate the value of impact sourcing and promote its adoption in South Africa and beyond.

Impact sourcing is a business process service delivery model that provides employment opportunities to previously unemployed individuals who have not been meaningfully engaged in the formal economy. Generally, the individuals who are employed via impact sourcing belong to economically and/or socially disadvantaged backgrounds, or are differently-abled.

An overview of the impact sourcing market in South Africa in 2016
50 to 55 percent of the ~ 235,000 FTEs in the South Africa BPO market qualify as impact workers. This high share is because there is no, or limited, difference in the profile of impact and traditional workers hired in normal course of operations, meaning that although companies hire impact workers, they do not claim it to be impact sourcing.

Value proposition of impact sourcing in South Africa
As part of the 2016 engagement with The Rockefeller Foundation, our detailed business case included identification of six key elements to the impact sourcing value proposition in South Africa:

Impct Srcng SA 6 key elements

 

During our research, companies indicated that impact workers, especially those who have gone through training programs, exhibit better behavioral characteristics. These include higher adherence to timetable, lower absenteeism, higher motivation level, and lower attrition. In fact, as it relates to workforce stability, which is a critical component of the value proposition, the companies indicated almost 50 percent lower attrition among impact workers as compared to traditional workers.

Impact sourcing ecosystem in South Africa
A unique feature about impact sourcing in South Africa is the presence of a robust ecosystem comprised of BPO service providers, buyers, training academies, and government/industry associations. The presence of impact sourcing-focused training academies is a key element of this ecosystem.

These academies, such as Careerbox, Harambee, and Maharishi Institute, help buyers and service providers identify, screen, and train entry-level candidates through job readiness training or learnership programs. The thrust of these programs is on intentional talent development to ensure impact workers are employment ready. These programs include training on technical skills (e.g., computer literacy and language) and soft skills (e.g., adapting to a corporate environment, dealing with stress, and the benefits of stable employment).

In fact, providers including Aegis, CCI, and WNS have established their own in-house learnership programs as part of their intentional focus on impact sourcing.

What has changed since 2014?
Since our last study in 2014, there have been some significant positive developments in the impact sourcing market landscape in South Africa.

Perhaps the most important is the higher level of maturity exhibited by companies in understanding the benefits and challenges associated with impact sourcing, thereby, enhancing intentional adoption. Moreover, there has been a shift in the value proposition toward “accessing relevant talent” rather than just “cost savings.” In the past, companies had expressed concerns related to higher upfront training and the administration cost of impact sourcing programs. But our research established that the total cost of ownership (TCO) for impact sourcing is 3-10 percent lower than that of traditional sourcing. Finally, companies are increasingly adopting impact sourcing for the many different types of value it provides. For example, significantly lower attrition among impact workers not only contributes to improvement of the work culture of the organization, but also translates into better service delivery.

Outlook
As there is an intrinsic link between adoption of impact sourcing in South Africa and the expansion of the BPO market in the country, there are understandably concerns around security risks, the impact of automation technologies, etc. Nevertheless, our study shows that the desire to intentionally adopt impact sourcing in the country has increased, and that the model is expected to grow, albeit gradually.

For more details on impact sourcing see our additional insight infographic.

 

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