In March this year I had the great privilege of being invited by the Department of Trade and Industry (DTI) South Africa to attend the 2015 Trade Mission as one of the Australian delegates. It was an experience I’ll never forget and one that started back some 6 months earlier.

First meetings with the DTI in Australia

In October 2014 the DTI had arranged to visit with our business as part of their annual program to meet with an explore potential opportunities to interest Australian companies like ours to consider South Africa as the outsourcing destination of choice. This offered us a great opportunity also to consider our global expansion plans as we look to create a secondary presence outside of our offshore base in the Philippines. This also enabled our Finance and HR Director Miss Mia Alarin the chance to achieve one of her life long goals of visiting Australia, while attending her first international event hosted by the DTI here in Sydney.

Mia with the H.E. MS KOLEKA MQULWANA of South Africa during the breakfast summit at Shangri-La Hotel Sydney, October 2014.

Being selected to attend the 2015 Trade Mission

In most startup businesses you have to take the opportunities that come your way, and you work out how to make the most of them. Its better to have tried and failed, then to not have tried at all. This clearly was the beginning of something special for our business and we look forward to our continued planning to expand across this region.

The DTI made the entire application process simple, easy to understand and within just a few short exciting weeks of waiting in anticipation for the results, the application was approved and the journey to South Africa was booked into the schedule for March 2015.

As far as business trips go who doesn't enjoy an international business trip away? Of course a trip to South Africa, well that doesn't happen every week and wasn't something we had ever discussed in our initial early start up development plans (and yes I packed my surfboards - which created quite the stir and thanks so much to my co-travellers who carted my boards from one hop to the next, made for a few laughs!).

Flying in style with Qantas

First thoughts, personal expectations for South Africa as a BPO Destination

Having already travelled this year to the Philippines to work with our staff directly on our new services programs and personal branding photoshoots, I’d already taken in the state of the market place in Cebu and had a feel for what's it like working in a third world country. South Africa, on the other hand, being only known to me via the travel channel, I guess I had set expectations that I’d be visiting another third world style country.

South Africa is ranked according to the IMF and World Bank as 33rd with $350BN in annual GDP, where the Philippines is ranked 39th with $284BN in annual GDP. I think the expectations initially were fairly low in terms of what infrastructure and the state of the country overall. Interestingly I was pleasantly surprised upon arrival in Johannesburg to see first hand that while South Africa may be ranked low as far as international GDP is concerned, but their infrastructure is in quite contrast to what you would expect. It’s actually very very good.

With a simple yet sophisticated road system I was well impressed by their 8-10 lane mega highways and the ease it offered when moving around from one city to the next. On electricity, while I had heard about the load shedding and issues with power, we never really experienced any issues over the 7 days on the Trade Mission. You’ll also be pleasantly surprised to learn the the hotels, the restaurants and of course the wonderful feel of the country itself is something well worth experiencing. The people are amazing, and it's as if you lived their for 20 years or more, they just really like people, they like foreigners and they really are passionate about their country. It was far from the congested hussle and bussle of Sydney, which was quite refreshing.

The Michelangelo Hotel, Johannesburg

The state of the market

As a BPO destination South Africa is relatively new to the global market and currently services the UK as the primary base along with Australia, the US and other Euro zones. Being culturally aligned to both the UK and Australia is clearly an advantage for South Africa, though they have yet to fully harness their overall position in the industry with a modest 20,000 seats servicing overseas markets. The market operators though are clearly first class and from the top down there are some highly experienced and very knowledgeable business executives, which adds to possibly the greatest point of difference from a business executive's decision making process when considering an offshore destination.

Without exceptional leadership businesses fail, and if you’re considering offshoring a services or sales division, which while in the long run will be a considerable cost savings benefit, initial setup, implementations along with training will be both time consuming and relatively expensive for any business. Fortunately, strong leadership, strategy development and experience you’ll find with the operators in this market.

Facilities

We had the great privilege to visit with a wide variety of contact centres and executives during the Trade Mission. From Johannesburg, to Durban and finishing up in the picturesque and scenic city of Cape Town. We certainly did the full tour and saw our share of powerpoint slides (if I could insert a suggestion here, operators need explainer video/s, there is a wonderful story brewing across the South African industry and not one provider really captured their own points of difference very succinctly or quickly and video clearly can save us all from the “next slide” syndrome). South Africa though is a beautiful and diverse country, and each city offered something different which gives businesses a real choice in the style, cultural backgrounds and overall feel that fits within their own businesses cultural ideals, especially when it comes to how they would like their own customers serviced.

The top ranked contact centers offer you an unbelievably energetic, vibrant and technologically advanced environment where you can't help but be impressed. Im not sure in all my travels around the world that in one short trip I've seen so many different businesses where the employees were from one to the next, super hyped to be at work, ready to sell for your business, there making dynamic impacts, and just flat out having fun. It was really something you wouldn't expect, you have to see this to believe it, it was special.

Barclays Contact Centre, Johannesburg

Markets served

There are 3 main BPO or contact centre markets across South Africa. The central based capital Johannesburg, East Coast Durban, and West Coast Cape Town. All offering something very different, while all offering something equally the same. Each city offered “people” with a great passion to succeed, and that really does make a big difference to any business. It's always about the people and the sheer will of these people that are ready to get to work for your business will totally blow you away. Then, backed with cultural affinity, excellence in leadership, and a timezone that works extremely well for the contact centres, Australian businesses have a real opportunity to explore how offshoring will transform their businesses for the better.

Gwenyth Taylor from Allen Lawyers an attendee of the 2014 Trade Mission has already set up in Cape Town and I had the great pleasure of meeting her on the Wine Tour of De Grendel. Gwenyth told me their firm couldn't be happier with the results and suggested that they should have moved faster to outsourcing more capabilities, and are now, but like most companies they tried a little first before moving more.

With Australian companies like Coles and iiNet already achieving results beyond expectations, including outperforming well established onshore divisions, it won’t be long before others follow suit. The main areas of expertise include: Financial, Legal and Technical customer service and selling environments. Its not a back office low cost market place like India. There is however real value here to invest in highly qualified business building teams.

De Grendel Wine Estate - always time for a drop or two on a trip away!

Johannesburg

The Capital for big business

Johannesburg is the oldest serving outsourcing marketplace in South Africa and houses your largest percentage of contact centre workers servicing onshore outsourcing relationships. Here you’ll find all your established banking, insurance and global market players. It’s the big boys town, mixed with a diverse workforce you can look to cater to both local and international markets. Known for establishing crisis management centres you’ll find highly experienced operators that can offer unique services.

Durban

Sales the Hype and Career Box

Durban is your high paced sales environment, if you’re looking to grow a division through selling over the phone then you’ll be looking at Durban. With a heritage originating in India, but interestingly with more of a neutral british sounding accent, you’re going to find first class sales professionals. These young millennials have a lot of flair are highly motivated and the operators are classy, experienced, and invested in the local communities with knowledgeable in global markets. Durban is growing very quickly and for good reason, the waters also warm here which is bonus for surfers like me.

Career Box

Cape Town

The views from the top of the food chain

When you first arrive in Cape Town you’re going to be amazed at the scenery alone. With mountains at every turn, a beautiful sea port, a quaint city with a stack of character, history and charm, Cape Town is clearly the jewel of the three as far as aesthetics goes. Cape Town really is the most established market and for good reason, executives outsourcing and offshoring a division could easily mix in a little business with a family vacation here and it’s easy to see why many have chosen to setup here. You’re state of the art contact centres were built here over the last 5-10 years and with extensive studies being done to create the best working environments that’s what they’ve built. You’ll find your most experienced work force here in this market and you can diversify from complex sales and customer service programs to almost any startup or established business for outsourcing services.

The operators

It would be an injustice to only list a few of the contact centres here, and we met with a really wide variety from startup to the global players and I feel it would be unfair to compare them against each other, seeing we really had limited time with each and I’m not comparing proposals or Apples for Apples analysis on specific requirements, we’ll leave that for the experts.

I do of course have my personal favourites and can elaborate further. If you’d really like to know more then please send me a personal email with your questions to - adam.mole@transeo.com.au

If you’re really keen to learn more about who’s who in South Africa, and how they rank, then I highly recommend the book - South Africa’s BPO Service Advantage, by Leslie P Willcocks, Mary C Lapacity and Andrew Craig (I walked away with a signed copy!) you can find the book here - http://www.palgrave.com/page/detail/south-africas-bpo-service-advantage-leslie-p-willcocks/?isb=9781137474049

Regulations

I won't go too far into all the regulations and requirements for setting up a business in the South African BPO market but what I can tell you is that it's not a cake walk, you won't be just showing up and starting your own business here easily. You will however be able to work directly with any of the industry contact centres in developing a working relationship, that’s relatively straight forward, though if you’re looking to relocate your own staff to oversee the initial transition, then you’ll need to overcome the visa issues, which right now can be a little lengthy and complex. With the right connections and understanding of the process you’ll find that really anything can be done, it just might take a little longer than you might hope for.

Employment and local conditions

Probably the most striking difference from the Philippines to South Africa is in Cebu our staff live where they work, they literally walk across the street to work, as opposed to in South Africa, workers live outside of the contact centre locations and they travel into work (usually by minivan or buses, as they continue to expand and build on the new rail systems). The third world does exist in South Africa and there is still a real divide between races.

The staff travel into work from their own communities, or townships and many of those are still ghettos. With poverty widespread and youth unemployment exceeding 35% in some areas there are real concerns, though this is a driving factor providing opportunities for the industry as a whole and where the industry leaders are investing heavily in training and development now for the future.

While traveling on after the Trade Mission (surf searching - and yes the water's cold!) I was very fortunate to be able to meet some very friendly locals who took me to visit friends in Gugulethu a local Township not far from the Cape Town Airport. Here in “Googs” as they called it, I met these amazing young kids, see for yourself if they aren't superstars of the future.

It’s a whole different world literally across the street from the first world and the rules are different. Overall the salaries reflect that of the third world for the bulk of the contact centre workers and they can't afford to live where they work, or really even eat where they work. There’s really a first world to third world separation issue still and while good people are doing great work to bridge the gaps, there are still significant challenges to overcome.

Government Support

While the South African government instabilities do pose some risks to operations, the DTI overall is highly committed to this market sector, which is very noticeable through the quality efforts and work of the staff involved in planning and hosting the Trade Mission. A very special thanks to Angela Kays, Phumza Gushu, Syed Jaffry and everyone else involved for making the trip very well organised and at every turn that extra bit special. As for the red tape (and there is some), the support from DTI to offer incentives to the industry will most likely continue to position the market as a viable destination over the short term. Dealing with the internal civil integrations of the country as whole will take more time, be rest assured the commitment of the government to the industry as whole is a big plus.

Angela Kays and Phumza Gushu from the DTI - very well organised and great hosts, thanks ladies! 

BPeSA

Business Process Enabling South Africa (BPeSA) or be-pesa as its pronounced is the independent body positioned with the vision to create significant growth in jobs for the industry and with Gareth Pritchard at the helm of this organisation its crystal clear they have the leadership required to see through on their vision. The best part about this body is they understand where they are now, and they’re bringing in the brightest and best minds in the industry and from outside to pull together to ensure that success is achievable. Personally I just really enjoy being around experienced, knowledgeable and forward thinking people, that want to learn too, it’s really amazing to see how they operate.

BPeSA office in Cape Town - what a view!

Tweets by @bpesa

The 2015 Outsourcing and Offshoring Summit hosted by BPeSA - #BPO2SA

The annual Outsourcing and Offshoring Summit South Africa was held at likely the best hotel and location in South Africa, at the Cape Town Waterfront Hotel. If you wanted to take a holiday to do cable mountain, the wine tours, and say stay in a 5 star hotel, then, this is where you clearly would want to go.

Waterfont Hotel - Cape Town South Africa 

Held over 2 days the summit brought together industry representatives, analysts, thought leaders, and a range of interesting guests and visitors seeking to learn about the South Africa as a legitimate and viable BPO destination. It was a top notch affair with round table question and answer formats as opposed to the normal stand alone speakers. Very engaging and thought provoking.

Inspiration and great insights today from Industry leaders #BPO2SA thank you @bpesa for a well run Summit. pic.twitter.com/ZQS5XzSf49

— Adam Mole (@adam_transeo) March 5, 2015

The common theme from the summit was that growth is happening, collectively the industry needs to pull together to better market to Australian businesses and build on the already fine foundations established across the industry pillars.

Outsourcing and Offshoring Summit South Africa presenters who all made the event insightful, interesting and fun.

Patrick Gordon handing over the helicopter flight to the biggest #Bpo2sa 'Twitters' 😊 pic.twitter.com/KBCFymnygd

— Traci Freeman (@believeconsult) March 6, 2015

Mark Hillary @markhillary and Traci Freeman @believeconsult were twitter machines - I tried to keep up!

Future expectations

This was a fabulous trip, well organised from top to bottom and I can’t say enough about how many opportunities there are in this market. There is a long road ahead for the South African BPO industry as a whole and defining the value proposition is becoming more clear, along with the runs already on the board, the experienced operators and increasing government support, South Africa as a BPO destination has a bright future.

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About the Author

 

About Adam Mole

Adam is the proprietor of start up BPO company Transeo and has been working with offshore and outsourcing services for more than 20 years. Adam is passionate about small business. He likes to write about his experiences in sales and startup business ventures. In his spare time you'll find him on one of Sydney's south coast beaches surfing and smiling. Email Adam at adam.mole@transeo.com.au and follow Adam on Twitter @adam_transeo.