Business process outsourcing Offshoring – foreign BPO contracts – is growing fast.
he South Africa business process outsourcing sector has consistently won international awards for the work it does for international companies and 2016 was no exception. The Global Sourcing Association (previously National Outsourcing Association) capped South Africa as the “Offshoring Destination of the Year” for 2016 in London in November. BPO involves any internal business function that a company chooses to outsource to a specialist in that field, for example accounting or call centres (also known as customer service centres). One interesting example relates to loading an aeroplane’s freight load – in Frankfurt! The loader does this in the Western Cape via remote cameras and weighing machines. After work the loader can visit the beach. Offshoring refers to BPO that is done across international borders. Cape Town is a leader in the field. A City of Cape Town report gave the BPO contribution to provincial GDP in 2014 as approximately R9-billion. The national Minister of Trade and Industry, Rob Davies, says that the local BPO sector has had compounded growth since 2012 of 25% year-on-year. There are approximately 30 000 jobs nationally with the top market being the UK. Within the Western Cape sector, 63% of companies are involved in inbound customer service work; back office accounts for 13.8% and debt collection at 9.1%. UK shop Asda and online retailer Amazon have large customer service centres in Cape Town. The fact that greater Cape Town is home to three well-regarded universities, a university of technology and two technical colleges is a major advantage in attracting companies with sophisticated operations, such as BPO. A director of a British business intelligence
ONLINE RESOURCES Business Process enabling South Africa (BPeSA): www.bpesa.co.za National Department of Trade and Industry: www.dti.gov.za Wesgro: www.wesgro.co.za
SECTOR INSIGHT Incentives are on offer to BPO investors. • South Africa’s BPO sector won a 2016 global award. company that has operations in Cape Town, S-RM, says the that Cape Town’s position as a “knowledge nexus” was a major factor in deciding to open an office in the city. Other factors in favour of Cape Town are the relatively neutral accents, good infrastructure (financial and telecommunications) and the time zone being the same or close to Europe’s. The Department of Trade and Industry (dti) offers some incentives to BPO investors. A base incentive is calculated on projected offshore jobs to be created and is awarded on actual offshore jobs created. The incentive has a two-tier structure for non-complex and complex jobs and is paid over a five-year period. A bonus incentive becomes payable at the end of the five-year period.
WESTERN CAPE BUSINESS 2017