South Africa to become leading offshoring destination, says Gartner

International research house Gartner has revealed that South Africa is on track to become one of the world’s top offshoring destinations.

September 27, 2012

International research house Gartner has revealed that South Africa is on track to become one of the world’s top offshoring destinations.

Speaking at the recent Gartner Symposium in Cape Town, analyst Partha Iyengar says that offshoring is likely to create 40 000 jobs in South Africa by 2014, with 120 000 staff in the domestic insourced sector. He added that offshore contact centre jobs are expected to grow from 8 000 in 2010 to 30 000 in 2015.

Iyengar pointed out that SA needs to work out how to leverage its relationship with BRICS countries by selling technology to these markets as well as recruiting their expertise.

Bruce von Maltitz, director of 1Stream, a provider of hosted call centre technology, agrees with the findings. “Offshoring does not have the same negative connotations as it did a decade ago and it is becoming common practice for large multi-national organisations. Several countries are keen to take advantage of South Africa’s cheap labour costs and the large number of skilled, English-speaking professionals. There is no reason why we can’t become known as a prime offshoring destination.”

Von Maltitz says that South Africa has a quality telecommunications infrastructure, particularly with the increase in international bandwidth, and highly-skilled, experienced suppliers. “Although India has long been synonymous with offshore call centres, they are receiving stiff competition. Cost has become somewhat of a deterrent – renting Mumbai commercial space is nearly double that of downtown New York – which has caused several companies to relocate to countries such as the Philippines, China and of course, South Africa.”

Although Iyengar warned that there is still of a dearth of IT skills in the country, Von Maltitz believes that this is easily overcome by using hosted technology. “All an agent needs to access the system is a PC and a headset,” von Maltitz says. “By moving the call centre into the cloud, there is no need for an in-house IT department or even IT assets – in short, creating a solution that enables companies to deploy what they need when they need it. After all, the more premise-based a company’s IT is, the more difficult it becomes to adapt, manage, expand and relocate.”

The hosted platform has already drawn multinationals like Amazon and wonga.com to the country. “We have skilled hosted providers that can provide the consultative backup needed and we are making strides in terms of connectivity,” von Maltitz concludes. “We are more than capable of accommodating businesses wishing to set up their contact centres in South Africa.”