Roundtable: Business Process Outsourcing

The BPO market has been identified as one that could have enormous potential to support economic growth and employment in South Africa. As a result, it has recently been the subject of much attention, research and debate, by various levels of government. However, to date the focus has increasingly narrowed to contact centres, and, for various reasons, BPO is increasingly seen as a market where South Africa does not enjoy a significant comparative advantage.

This assessment does not reflect actual market developments in asset management and related financial services, and there are good reasons to believe that there is, in fact, significant potential benefit in supporting this part of the market. However, in order to convince policy-makers of the merits of this avenue it is necessary to undertake an assessment of this part of the market that is more strategic, more detailed and more focused on actual potential interventions than the work that has been done to date.

This project therefore conducted an investigation to analyse the key drivers of this part of the outsourcing market to draft a strategic framework, assessed local and foreign companies currently engaged in setting up or running BPO operations in the South African markets, interviewed companies to determine key business factors that influence the decision to be based in South Africa, and assessed the potential of this segment of the market. This information was used as a basis to determine whether South Africa has a comparative advantage in these sub-sectors, and if so, what would be the most effective way for government to provide support.

The findings of the study were presented at a roundtable in Johannesburg in February 2006, which was opened by Dr. Raymond Ngcobo, chief director: Strategic Competitiveness Unit, the dti, while the project leader, Tracy van der Heijden, presented the research conducted. Judy Malan of McKinsey & Company presented information on government proposals, while Dr. Miriam Altman, executive director: EGDI, HSRC, provided background to the project and led discussions about the way forward.