OUTSOURCING: Tshwane to Target Outsourcing Sector
Recent Gauteng Business News
Tshwane has all the ingredients to become a premier destination for local and international Business Process Outsourcing (BPO) operations, Darryl Marcus, International Consultant, Business Process enabling South Africa (BPeSA) Gauteng told delegates at the 3rd Annual Tshwane International Trade and Infrastructure Investment Conference (TITIIC) at the CSIR International Convention Centre yesterday.
Tshwane’s population of 2m people boasts the highest level of education in South Africa while the city is home to 7 of the 8 national science councils and hosts the 2nd highest number of embassies in the world.
Other international speakers confirmed global interest in Tshwane as BPO destination. American Charles Schmidt, CEO of non-profit JD Group, told delegates that they are busy with a 500-seat contact centre initiative in Tshwane.
Jim Smith, Managing Director of Digital Network Group from Maryland, United States, is in South Africa to evaluate potential partners. When asked about key criteria for evaluating BPO operators, he quickly explained that the workforce is their number one consideration. ‘The available skilled labour in an organisation and the ability to keep them on-board is the number one factor,’ he said. He named cultural alignment and infrastructure are the other key factors.
Marcus said that international outsourcers have long been operating in Gauteng. These include American-based firms IBM, Sykes, Accenture and Deloitte and Indian firm Aegis. Genpact recently opened up operations in Gauteng, further underlining the province’s attraction for global BPO.
IBM has recently launched their Managed Business Process Services offering in South Africa to supplement their 1000 employees offering technical support worldwide out of their Sandton head office. Kunal Seth, Head of Sub Saharan Africa IBM Managed Business Process Services, said, “by outsourcing process responsibility, clients can take advantage of IBM’s global best practices, process innovations and delivery capabilities, enabling them to shift their investments and resources to strategic business areas while reducing their operating costs.”
Seth explained that Annualised Run Rate Savings range between 30 and 60% from the baseline, with 20% of those savings coming from globalisation and another 35% from scale and expertise, according to IBM data.
BPO Parks – fully functional contact centre facilities that can be occupied by multiple tenants enabling a critical mass of BPO operations – are a key strategy for developing the sector, according to BPeSA’s Marcus. While City of Joburg is busy with plans to build a BPO Park to further grow BPO business in their CBD, Tshwane is focusing on industrial development in Hammanskraal, where plans are progressing for a skills development centre for local and international operators. Additionally, Centurion is highly attractive for its telecommunications infrastructure.
With its intellectual assets, diplomatic influence and advance infrastructure, Tshwane is poised to be a key destination for the BPO sector in South Africa.
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