The business process outsourcing (BPO) sector in Gauteng should exceed R7,4-billion this year, with 9% to 14% growth expected though 2014.
This is according to Keryn House, CEO of Business Process enabling South Africa (BPeSA) Gauteng, who addressing yesterday's BPeSA Gauteng Outsourcers Forum.
Historically, Gauteng Province has dominated the South African market and currently employs 71% of South Africa’s full-time workers – an estimated 35 700 – in the sector.
Although call centre outsourcing is the best-known sector of BPO, this comprises just 67% of the total industry. Other more complex outsourcing services such as IT support, financial accounting, data analytics and a variety of legal services account for one-third of the industry – and are growing fast.
House points out that, in a recent a trade visit, it became evident that India and South Africa have a lot in common. "The challenges we face in Gauteng are strikingly similar to of India’s big cities," she says. "Their main challenges include infrastructure development, rural development, supporting SMEs and creating employable skills and a literate talent pool.
"India has made great progress over the years in addressing these socio-economic issues, mostly through developing the outsourcing industry," she adds. "And so can we.
"Many of our members struggled during the economic crisis, but our data shows that employment in Gauteng’s BPO sector grew modestly during the recession. Now the strong players are now well positioned to be globally competitive. Especially in high-end services, our research tells us that we have a growing skills base and have a credible offering on a global basis."
However, Gauteng’s BPO sector faces a number of challenges in competing internationally. IDC senior economist Gerhard Kuhn told the delegates at the Outsourcing Forum that inflation is the key to controlling labour costs.
"Even if SA’s inflation rate stays at around the 6% level, it is still far higher than the 2,1% and 0,9% inflation rates reported for February 2010 in the US and the Euro area, respectively. Moreover, both the US and the EU strive towards a 2% targeted inflation rate. That means that, year-on-year, SA would become 4% less cost-competitive vis-à-vis the developed world. This may not seem like a lot, but 4% is a big deal for corporations."
However, House remains optimistic. "Gauteng Provincial Government, City of Joburg, Tshwane, and Ekurhuleni are all behind us. Our research has identified nine large-scale projects that will be rolled out over the next four years to address skills development, infrastructure, and industry support. Gauteng Provincial Government has embarked on an implementation project with consulting firm Frost & Sullivan in partnership with BPeSA Gauteng to implement the Gauteng BPO strategy."