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How it Works: Offshore Outsourcing to South Africa

Tue, June 13, 2023

How it Works: Offshore Outsourcing to South Africa

There’s no getting around the fact that delivering great customer service is going to be more expensive than doing it badly. There are two caveats, however. Firstly, just because you spend a lot of money on customer service doesn’t guarantee that it will be good, or better than your competitors. And secondly, beating the service of your competition shouldn’t cost you so much that it becomes unprofitable. That way lies madness.

So, what we’re looking for is a way to balance the cost and the quality of service provided, to ensure we deliver our business objectives and generate a return on investment. The reality is that both cost and quality of service are primarily influenced by one factor: the people you hire. Wages are going to make up the bulk of the cost of your customer service, far more so than technology investments. And the quality of those hires is going to determine the level of service given to your customers. Armed with that knowledge, it’s not surprising that many UK and US companies are turning to offshore outsourcing in an effort to reduce their customer service and back-office admin costs. But are they doing so at the expense of quality?

The Offshore Solution

While offshore outsourcing isn’t for everyone, it is certainly a proven method of reducing costs. Over the last 20 years, more and more customer service and helpdesk activity has been outsourced to places like India and the Philippines. Companies take advantage of the lower labour costs in these countries to recruit highly qualified people whose counterparts ‘back home’ would simply be out of reach of any sensible budget.

The issues that this move to offshore outsourcing has caused are well-known, including a decline in the quality and speed of response, as well as bad publicity for companies that send good jobs out of the country. Customers vote with their feet of course, and if they desert your company due to poor service then saving money through offshore outsourcing is self-defeating.

For offshore outsourcing to truly work, issues such as a cultural disconnect between the outsourcing destination and the home market, and the strong accents of agents who clearly aren’t native English speakers need to be addressed to ensure consumers are on-side.

There is one country that UK companies are increasingly turning to, which can solve those issues. It’s a country that has flown somewhat under the radar but is now growing rapidly as a BPO power due to its more neutral accent, strong cultural connections to the UK, highly educated workforce, second-to-none infrastructure, and governmental support for the industry. That country is South Africa.

South Africa: the no-compromise option

South Africa has risen to prominence as a preferred choice for offshore contact centres due to its cost-effectiveness, adaptability, and access to a diverse pool of talent. Interestingly, the global contact centre standard, ISO 18295, originated in South Africa, underlining the country’s expertise in the BPO sector. Today, it stands as a key offshore destination, particularly for English-speaking countries, employing about 270,000 individuals. According to the industry association, BPESA, 65,000 of these employees cater to international clients, serving markets overseas. In terms of global BPO revenue, South Africa’s share was 1% in 2014, and this figure is projected to rise to 4% by 2030. Major cities such as Johannesburg, Cape Town, and Durban are among the top 100 global outsourcing destinations, ranking 20th, 56th, and 100th respectively. This attractiveness isn’t limited to businesses specialising in BPO; large corporations like Amazon are also employing South African personnel for customer support services in North America and Europe.

Key Success Factors in South African BP

South Africa’s success in the Business Process Outsourcing (BPO) sector is a result of several key factors. One of the core strengths lies in the country’s deep domain knowledge, particularly in financial services. This is coupled with a broader global expansion from contact centres to non-traditional sectors such as legal services, healthcare services, game development, broadcasting, and learning management systems. This diversification and specialisation in niche areas form the solid foundation upon which the BPO sector thrives.

A significant aspect is also the presence of a large pool of young, trainable, and technologically adept talent with excellent English proficiency. This skilled workforce not only possesses a cultural affinity with countries like the UK and Australia but also boasts neutral accents, making them ideal for BPO roles. The combination of these attributes makes the workforce an asset to the sector and drives the country’s success in the global BPO market.

South Africa’s position as the gateway to the African continent and its large domestic market present sizable regional and domestic market opportunities. These opportunities are particularly notable in the telecom, BFSI (Banking, Financial Services and Insurance), and retail industries. Additionally, there is a growing demand for digital solutions in these sectors, further bolstering the potential for BPO growth.

Finally, and perhaps most importantly, South Africa offers significant cost savings. Operational costs can be 60-70% lower than those in the UK and Australia, and 25-35% lower than other leading offshore locations. Furthermore, the country has a robust and sophisticated infrastructure, enjoys governmental support at various levels, and adheres to global contact centre standards such as ISO 18295.

Exploring the Infrastructure: An Enabling Environment for BPO Operations

South Africa’s Business Process Outsourcing (BPO) sector flourishes not just due to talent availability, but also due to the enabling environment and robust infrastructure. The country is well-equipped with impressive Information and Communication Technology (ICT) infrastructure, including five submarine cables providing a steady bandwidth supply. Compared to competitors such as the Philippines, South Africa offers lower fixed broadband tariffs, making it a cost-effective choice for companies looking to establish offshore operations. The country’s advanced infrastructure also supports a high quality of life, which attracts and retains top industry talent.

The workforce in South Africa remains a key asset for the BPO sector. The country boasts 16.5 million native English speakers, with an estimated 410,000 more entering the workforce annually. These individuals are not just fluent in English but also possess a neutral accent, ideal for customer interactions. Additionally, South Africa has native speakers of Dutch, German, French, and Italian, serving diverse market needs.

The South African government plays a crucial role in nurturing this talent pool. Recognising the BPO sector’s contribution to GDP, the government has implemented several skill development programmes. For instance, the Monyetla Work Readiness Programme, backed by a consortium of BPOs and subsidised by the government, has helped thousands secure full-time jobs. The Business Process Services (BPS) scheme and other programmes offering tax and cash incentives, along with substantial investments in infrastructure and communications projects, further solidify South Africa as an attractive BPO destination.

Cultural Compatibility is Key to Outstanding Customer Service

The culture of a country plays an essential role in providing top-notch customer service. South Africa’s cultural compatibility with English-speaking countries, especially the UK and Australia (cricket, rugby, surfing, barbecues, etc.) helps South African agents communicate and empathise with UK-based customers.

Further enhancing its appeal as an offshoring hub, South Africa adheres to European and Australian standards of data privacy and security. The domestic BPO industry is also familiar with rigorous compliance standards like GDPR, PCI, and ISO, making it a fitting choice for offshore clients requiring such adherence. This blend of cultural compatibility and global standards compliance positions South Africa as a preferred location for outsourcing customer service tasks.

It is also in the same time zone as the UK and most of Europe, making communication between outsourced centres and clients much simpler. For clients that wish to visit, it’s also a relatively short flight compared to other destinations.

Leveraging Cost Efficiency

Cost-effectiveness is a significant factor driving outsourcing decisions. South Africa’s BPO sector offers substantial cost benefits compared to other popular offshoring destinations. The combination of an advantageous exchange rate and government-backed incentives enhances the cost efficiency of the country’s BPO sector. For businesses emphasising impact sourcing, South Africa’s BPO industry provides a platform to demonstrate corporate responsibility while also reaping significant cost benefits.

Harness the Potential of South Africa’s BPO Industry

Ventrica, a premier offshore contact centre partner in South Africa, capitalises on the country’s advantageous BPO landscape to offer top-tier customer service solutions. As we do for all our clients, we prioritise your brand’s reputation above all else.

Our flexible offshore solutions are designed to help your brand scale and enhance customer experience levels. Our expertise spans multiple industries such as e-commerce, retail, travel, insurance, and technology, and we understand the specific intricacies of each.

Our South Africa-based contact centres are equipped with state-of-the-art technologies in AI, automation, and cloud-based solutions. This unique combination allows us to provide the best of both worlds: the human touch from our skilled agents and the efficiency of cutting-edge technology. Our teams are trained to high standards, offering a blend of professionalism, empathy, and technical knowledge that aligns with your brand ethos.

At Ventrica, we perceive outsourcing as more than just a business transaction; we view it as a partnership. We are committed to building relationships with our clients, understanding their unique needs, and providing custom solutions that fulfil those requirements. We consistently monitor performance, derive insights, and refine our strategies to ensure the delivery of a consistently superior customer experience.

Partnership with Ventrica for Growth

Partnering with Ventrica, you can harness the potential of South Africa’s BPO industry to your advantage. With our commitment to service excellence, you can confidently expand your global reach, ensure customer satisfaction, and create new growth opportunities while managing your growth. We offer scalable solutions, allowing you to grow at your own pace, while our competitive pricing makes offshoring to South Africa an economical choice.

Our multi-lingual capabilities ensure that you can cater to a broad customer base, breaking down language barriers, and facilitating seamless communication. Our adherence to strict data security standards, coupled with our commitment to maintaining the privacy of customer data, reassures clients that their information is safe with us.

South Africa: A Hidden Gem

South Africa is a hidden gem in the global BPO landscape. With its unique blend of a talented and diverse workforce, robust infrastructure, cultural alignment, government support, and cost competitiveness, the country is positioned to be the go-to destination for companies seeking outsourcing solutions.

By partnering with Ventrica, you gain access to an industry-leading outsourcing destination and a partner committed to your success. Get in touch with us today to discuss how we can help you grow your business.

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