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South Africa touts its offshore charms
Can it beat India on time zone and customer service?

By Steve Ranger

Published: Tuesday 12 December 2006

South Africa is touting itself as a destination for offshoring and business process outsourcing (BPO), offering incentives to companies that want to set up operations there.

It is one of many countries including Hungary, Egypt and Mexico that want to grab some of the offshore business of which India currently has the lion's share.

It hopes that government incentives for companies that move their BPO business to the country could help attract more firms. And while it can't beat India on costs, it reckons it's more UK-friendly time zone and a better customer experience can swing some business its way.

At a meeting at the South African High Commission in London, the country's trade and industry minister Mandisi Mpahlwa said there is a "substantial savings potential" for companies that make the move, claiming that a 1,000-seat BPO centre could cost 50 per cent less than a nearshore operation.

South Africa already has a vibrant BPO industry, he said, with 80,000 staff and 70 companies offering services, and wants to boost this by creating another 100,000 jobs in this sector over the next five years.

The country has just agreed a package of incentives for companies that set up BPO operations in South Africa. The five-year programme will include training funds and tax benefits for companies willing to locate in more rural areas. There are also plans to bring down the cost of telecoms in the country - which has been an obstacle to some - and increase broadband provision.

Some companies have already taken the plunge, including ISP Brightview which has had a helpdesk operation in South Africa. Its CEO David Laurie said the company had moved its helpdesk to South Africa 18 months ago following a "fairly difficult period" in India.

UK customers are more comfortable with the South African accent than with the Indian one, he said, and the time zone made it easier to manage its partner in South Africa than it was in India, he said. "Having struggled in India for the best part of two years South Africa has been a real success and a real achievement," he said.

Other companies investing in the country include IBM - with 1,540 special technical support staff working in its South African integrated delivery centre, servicing 280 European companies including Boots. Shell is also setting up a captive support centre in the country to support its Benelux customers.