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South Africa remains one of the leading destinations for business process outsourcing (BPO) in the world, with the contact center and outsourcing industry expected to reach over $3 billion in value by 2016, according to market research company Frost & Sullivan.

The call centre market in South Africa is well-established and highly sophisticated in terms of technology adoption and services offered, says Ishe Zingoni, an industry analyst at Frost & Sullivan.

The South African Business Process Outsourcing (BPO) and contact centre market was valued at $1.08 billion in 2010, and it is expected to reach $3.06 billion by 2016. This represents compound annual growth rate (CAGR) of 19.4% from 2010 to 2016.

“The outsourcing market is growing remarkably, driven by a number of factors which include, inter alia, the need to focus on core business, and demand from off-shore markets such as US and UK.”

“With the onset of the economic crisis, businesses are increasingly focusing on maximising efficiency in the business, and hence outsourcing non-core processes. Furthermore, this shift enables enterprises to manage costs better.”

South Africa is one of the leading BPO destinations in the world, F&S said, with the country competing with the likes of India and Phillipines. Analysis from Frost & Sullivan found that the Asian-Pacific market earned revenues of $17.18 billion in 2011, and estimates this to reach $29.72 billion in 2017.

So what makes South Africa an appealing destination in light of the competition?

“SA’s key selling points include an assortment of Government incentives in the form of grants and subsidies, good infrastructure, and cultural affinity with key western markets such as US and UK.”

Of course, despite the appeal of South Africa, high telecommunication costs and inadequate flexibility in the labour market are still major obstacles for the country, Zingoni said.

The Phillipines benefits from good skills and talent development, healthy government support and also has a cultural affinity with the united states, F&S said, while India has a mature BPO industry, expertise and low-cost.

 

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