Hot Line From
the Cape
24 November 2004
South African call centre numbers are expected to double in
the next four years - and Cape Town is hotter than India when
it comes to service, recent research says.
Independent analysts Datamonitor predicts that there will
be 939 call centers in South Africa by 2008, almost double the
current number of 494 - a compound annual growth rate of 14%
over the period - and that South Africa could soon occupy a
priority position in the portfolios of global operations.
Meanwhile, research conducted by Deloitte & Touche, and
commissioned by investment agency CallingtheCape, says Cape
Town offers a stable workforce, high quality service, a
"robust skills base", and is a "highly competitive"
alternative to India for foreign companies.
- South Africa: An Emerging Offshore Opportunity -
Datamonitor report.
Contact Centers and Business Process
Outsourcing in Cape Town -
2004 Key Indicator Report.
Dial SA for service
Datamonitor predicts that in four years' time, offshore agent
positions will quadruple on current levels.
Datamonitor predicts that in four
years' time, offshore agent positions will quadruple on
current levels.
It says South Africa offers outsource providers a higher
quality, more culturally aligned front-office and back-office
location. Labor costs run at two-thirds of their US or UK
equivalents.
For global firms, South Africa is expected to slot in
between near-shore locations such as Canada, Mexico or Eastern
Europe, which offer close proximity and also cultural affinity
to domestic markets, and more traditional offshore locations,
such as India and the Philippines, that offer cheap labor.
The total number of agent positions in the country is
predicted to rise to 69 600 by 2008, with 6 200 offshore
outsourced.
Currently, 70% of South Africa's offshore customer service
agents service clients in the UK market. Most of these are
located in Gauteng province - more specifically, in
Johannesburg.
However, Datamonitor expects the balance to shift in favor
of Cape Town.
Capetonians just better than most
According to Deloitte & Touche, while the number of agents in
the industry grew 25% over the last year - it now employs some
11 000 people - staff attrition is stable at 10.7% compared to
India's attrition rate of 24.3%. Absenteeism is low.
Capetonians, its report says, are also better at fielding
calls. First-time call resolution - which measures how
efficiently customer queries are resolved - is 89% in Cape
Town compared to only 65.9% in India.
Other key productivity measures, such as abandon rates,
hours worked per agent, and business uptime, are ahead of or
line with international comparators.
The research also found that:
-
The industry in the Western Cape, and
Cape Town in particular, is well-established, with a broad
base of management and service provider expertise.
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The industry is already one of the city's
top 10 employers. Growth expectations for the next two years
stand at an average 40%.
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Offshore outsourcing is a key driver of
growth, with 55% of outsourcers' revenue coming from
international clients. Outsourcers offer seven foreign
languages including German, Dutch, French and Italian.
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A key strength of the Western Cape market
is the depth of financial services expertise, particularly
in insurance, mortgage and loan processing, and collection.
Financial services accounts for over 50% of staff in the
industry.
-
Existing investors in the Western Cape
report high levels of satisfaction. From a list of 37
factors that might influence a choice of investment
location, 35% were judged to be growth enablers and 41%
growth neutral. The key enablers are an excellent skills
base, technology, infrastructure, industry sophistication,
and quality of life.
-
The local labor market has proved to be
both growth-enabling and stable.
-
It is estimated the local industry could
grow by 10 000 seats per year without straining available
skilled resources.
CallingtheCape says that the recent telecommunications
liberalization announced by the government should also be a
boon for the call centre industry.
The introduction of a second national
fixed-line operator will offer competitive price challenges to
Telkom. At the same time, regulatory changes, which take
effect in February 2005, will allow for the phasing in of
Voice over Internet Protocol (VoIP).
These are expected to significantly lower
the costs of investing in call centers in South Africa.
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