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Datamonitor predicts that South Africa will see tremendous growth as a customer service hot spot.
Posted Nov 15, 2004
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London-based Datamonitor reports that the number of call center agents in South Africa will quadruple over the next four years. Though the growth in South Africa will be strong in percentage terms, the country will still trail more popular offshore publications, like India and the Philippines, according to Datamonitor analyst Ryan Powell. India and the Philippines continue to lead the call center market in labor and training, but South Africa offers both a closer cultural bond with the United States and the United Kingdom. Also, labor costs are two thirds of those in the U.S. or the U.K. Datamonitor expects there will be 939 call centers in South Africa by 2008, almost double the current number of 494--a compound annual growth rate of 14 percent over the period. "India will continue to have the lion's share of the call center market for the foreseeable future," Powell says. "What South Africa offers is a multilingual staff and greater cultural affinity." Although many call centers based in India and other countries have staffs well-trained in English, those agents have a very different cultural background, whereas the South African agents enjoy a much more Westernized culture, Powell says: "That means they have better ability to empathize with the customer on the phone." As a result, South African call centers will be able to provide higher quality customer service and sales services, with a particular focus on the financial services industry, according to Powell. Powell also says that "credit cards are abundant" and that the "established call center industry means middle managers already exist. Top-up training will bring those people up to suitable levels whereby they can best meet their offshore clients' requirements. State-funded learnerships are helping to fill the staffing pipeline to the industry for the longer-term needs. The learning curve of U.S. clients [that would use the call centers] is very high." The total number of agent positions in South Africa is predicted to rise to 69,600 by 2008. Some 6,200 will be offshore outsourced agent positions, meaning that a company specializing in outsourced call centers will hire the agents and operate the call centers, rather than a company like General Electric or General Motors owning and operating the offshore call center, according to Powell. The Dutch market is expected to be the biggest non-English language market that is served from South Africa. The Dutch language is the root of Afrikaans, which means that cross-training call center agents to speak Dutch should not be problematic. Second, the domestic Dutch call center market is itself mature, and delivers little margin for outsource providers there. South Africa is really the only offshore market that can support the Dutch market on a big enough scale, according to Datamonitor.
However, Powell cautions that there are potential challenges in the market. Though the political climate in South Africa has been relatively stable for the past 10 years, there are underlying problems. The country's constitution, adopted after 1994, fosters the notion of a state devoid of bias on the basis of race, sex, religion, physical disability, language, or sexual preference. However, in practice the state continues to categorize people on the base of race and sex to favor the "previously disadvantaged" as part of leveling the playing field. Companies want to make sure they fill these quotas in an economically and politically stable environment, according to Powell. Related articles: Quality Care May Not Be Enough for Offshore Contact Centers As the Call Center Outsourcing Debate Turns Making the Right Call As outsourcing options expand, companies are challenged to find the best mix of call center services.
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