SYDNEY: In a new recently published report
titled "South Africa: An emerging offshore location",
independent market analyst, Datamonitor predicts that in four
years time, call center numbers in the Republic of South
Africa (RSA) will be double those of today.
Offshore agent positions (APs) are expected
to quadruple on current levels. According to Datamonitor, RSA
offers outsource providers a higher quality more
culturally-aligned front-office and back-office location where
labor costs run at two-thirds of their US or UK equivalent.
RSA will occupy an important position in firms' global
operations portfolios. It will slot in between nearshore
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.
Datamonitor expects there will be 939 call
centers in RSA by 2008, almost double the current number of
494 - a compound annual growth rate (CAGR) of 14 percent, over
the period. The total number of APs in RSA meanwhile is
predicted to rise to 69,600 by 2008. 6,200 will be offshore
outsourced APs.
Currently, 70 percent of RSA's offshore
customer service agents service clients in the UK market. Most
of these APs are located in the Gauteng province - more
specifically, in Johannesburg. However, Datamonitor expects
the balance will shift in favor of Cape Town in the Western
Cape Province.
"Whilst the RSA is not as much of a labor
arbitrage cost play when compared to India and the
Philippines, it offers multilingual and non-English language
agents that are better able to deliver more differentiated
customer service based on greater empathy and closer cultural
affinity to customers in key target markets such as the US and
western European countries like the UK, Holland, Germany and
France," says Ryan Powell, Datamonitor call center analyst and
author of the study.
The Dutch market is expected to be the
biggest non-English language market that is served from South
Africa. Firstly, says Datamonitor, the Dutch language is the
root of Afrikaans which means that cross-training call center
agents to speak Dutch should not be problematic. Secondly, the
domestic Dutch call center market is itself mature, reaching
saturation point and delivers little margin for outsource
providers there. South Africa is really the only offshore
market that can support the Dutch market on a big enough
scale.
South African call centers will be able to
provide higher quality customer service and sales services,
with a particular focus on the financial services industry,
according to the report. "The established call center industry
means middle managers already exist. Top-up training will
bring those people up to suitable levels whereby they can best
meet their offshore clients' requirements. State-funded 'learnerships'
are helping to fill the staffing pipeline to the industry for
the longer-term needs," says Powell.
The promised deregulation of the telecoms
market will bring about greater price competition and herald
the long-awaited arrival of cheap Voice over Internet-protocol
(IP) traffic, stimulating further demand for offshore
operations in South Africa.
CIOL Bureau
