However, market influences are changing and a number of recent events have placed SA in a better position to become a destination of choice for offshore call-centre outsourcing.
“When the rand was at R6 to the US dollar we were at a disadvantage from a cost perspective, but at the current exchange rate we are more competitive,” says Jonathan Hackner, director of Call Centre Nucleus.
He says in 2003 India was 30% to 40% cheaper than SA as a destination and Ireland was about 20% cheaper, due to government incentives and cheaper telecommunication and labour costs.
“India had a high-quality, low-cost labour force.”
Over the past three years, the call centre industry in India has ramped up from 10000 to 2-million agent seats, with 70% of its offshore business now focusing on business-process outsourcing. But this sudden growth drained the skills pool, causing a decline in the quality of English. As a result India has started losing business, with some UK customers taking their voice services back in-house on the basis that it was false economy to save millions on costs while at the same time losing customers due to bad service, he says.
“The drop in telecommunications costs and the better quality of English of our call-centre agents puts us in a better position to compete for offshore business.”
In addition, while the rand has reduced in value against the US dollar, the Indian rupee has increased in value by 15% against the dollar.
In addition, SA is seen as politically stable compared with countries like India, which has Pakistan and Afghanistan on its doorstep.
Another positive for SA is that due to the economic climate companies are concerned about the risk of putting all their eggs in the Indian basket.
Vanda Dickson, group marketing director for Merchants, Dimension Data's call-centre business, says the global economic turmoil has put SA firmly on the radar screen of overseas companies looking for alternative destinations for offshore call-centre outsourcing.
She says India has been the most popular destination for offshore call centre business in the past, but in these uncertain economic times companies want to spread their risk across many destinations.
She says while SA's call-centre industry is small compared with India, it has a track record for good-quality service, especially in areas like financial services, telecommunications, retail and hospitality.
Also, the banking system in SA is a lot more sophisticated than in India and it is easier for call-centre agents to identify with the problems of banking customers in First World countries.
“They do not have ATMs on every street corner in India as we have.”
SA also has a proliferation of world class shopping centres and chain stores, which India does not. Call centre agents in India are therefore not exposed to a First-World shopping experience in their everyday life.
“SA call-centre agents can identify with customers in the same context.”
Richard Britt, MD of Dialogue Group SA, says the investment in telecommunications infrastructure in SA and the new Seacom undersea cable coming on line in June will increase bandwidth capacity and reduce operational costs. It will open opportunities for call-centre outsource operators to support more bandwidth hungry services.
Britt says the trade and industries department has done a good job of getting SA recognised as a business process outsourcing destination, and the 2010 World Cup will place SA even more in the limelight.
He says popular business processes for outsourcing to SA include handling voice, e-mail and conventional posted mail queries — that is when the client scans the documents and e-mails them to the outsource operator, whose agents respond to the letters and e mail them back to the client, who then prints them and posts them back to the customer.
He says operators like Dialogue also have automated processes that convert voicemail and e-mail to SMS, and their agents check these messages for accuracy before forwarding them.
Another aspect of offshore call- centre business is knowledge process outsourcing, which focuses on areas such as IT support and market intelligence, says Britt.
“Goldman Sachs, a global investment banking and securities firm, used to have 1000 analysts that analysed market trends, and this is now all outsourced to India at a much lower cost,” says Britt.
Source: Business Day
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