On the Cover
What cloud will mean for offshoring to Africa
Wednesday, 04 July 2012 00:00
Written by Jed Hewson
Jed Hewson is MD of 1Stream
“Offshoring” business processes to foreign countries does not carry the same negative connotations that it did before. The BPO boom in India can be attributed to cheap labour costs and the country’s pool of skilled, English-speaking professionals – both factors that can be found in abundance in South Africa. And considering, from an economic viewpoint, that the call centres outsourced to India alone has created 800 000 jobs, we should make a point of competing for a spot in that market.
The problem is the cost of telecoms in South Africa is still high, making up about 9% of the cost basket of call centres in the BPO space. But it is also broader issues, such as the strong rand, high labour costs, and ineffective government incentive programmes which are limiting foreign investment into South Africa. Things have hardly improved, with internet speeds still very slow and telecoms costs far too high. If we really aim to compete with other nations as a BPO destination, we need to turn the tables on the limitations we encounter.
It’s ironic that India is now in the process of outsourcing its call centres to the Philippines – because the price of real estate in their major cities is still too high. And why not? With cloud technology all an agent needs to access the system is a PC and a headset. There are no capital costs. No hardware or software costs. No upgrade costs. Flexibility and economies of scale may well be the key to drawing the offshore market to South Africa. It is a well-known fact that in-house IT, particularly in terms of call centres, is not able to maintain their technology and standard of service in the long run. Similarly, companies struggle to attract skilled individuals with the specialised knowledge required, and when they do, the more premise-based their IT is, the more difficult it becomes to adapt, expand and relocate.
The hosted platform has already drawn multinationals like Amazon and wonga.com to South Africa. 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.
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