The country is threatening other outsourcing spots; fluency in English and education are advantages.
Posted Jul 28, 2005
The Republic of South Africa's (RSA) offshore contact center industry is continuing to grow due to cultural multilingual affinity among call center agents, a well-established call center industry, multiurban centers, and a first-world infrastructure that can support IT outsourcing technology, according to a new Datamonitor report. "South Africa in Relation to Global Offshore Destinations" predicts that offshore call center agent positions in the area will total 6,200 in three years, a 34 percent year-on-year increase from 2003 levels.
Peter Ryan, call center and CRM analyst with Datamonitor, maintains there are a number of reasons for South Africa's recent success. Continued emphasis on language development in schools, an excellent telephony infrastructure in continually developing urban centers like Cape Town, Durban, Johannesburg, and Pretoria, and the well-ingrained presence of Western business practices are all keys. Another factor is "the strengthening [South African] dollar and increased U.S. interest in South Africa as an offshore location. This will continue to lead to faster market growth," Ryan says.
The RSA needs to continue to keep an eye on developments in Africa, as competition could be contained within the continent itself, according to Ryan. Rivals won't just be from Egypt, Morocco, or Tunisia, either, as sub-Saharan countries are showing potential to become offshore players in the future. The North African markets continue to gain momentum, but the sub-Saharan market, which includes Botswana, Kenya, and Senegal, continues to develop as an offshoring market. Besides the obvious cost benefits, Botswana is developing an educated, English-fluent, labor force. Kenya has solid English-language capabilities as well as a scalable workforce size. Senegal has the advantages of current French offshore facilities currently in existence and an IT and telecommunications emphasis by the national government. All three have relatively stable investment environments, according to the report.
Ryan says the North African market, comprising Egypt, Morocco, and Tunisia, will have continued success, with the number of call center positions in that area predicted to grow from 3,100 in 2004 to nearly 12,800 in 2009. Egyptian customer care is growing rapidly due to scalable and multilingual agents, Morocco's contact center market will continue to penetrate U.K. and Spanish markets, and Tunisian customer care will remain primarily French-based.
India is the industry benchmark for success, and will remain the largest offshore contact center destination for the immediate future, but Ryan says the country will see a declining growth rate thanks to escalating labor costs, a tightening agent market, and continued global competition from such areas regions as Africa. "South Africa is only one of many competing propositions in this market," Ryan says. "Companies must consider the connection between technology and offshore locations."
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