The BPO&O industry includes after-sales services such as call centres, e-mailing, data entry and conversion, finance accounting, benefits administration, human resource functions, and website design and development.
"The Business Process Outsourcing and Offshoring industry, which is only about a decade old in South Africa, employs somewhere in the region of 100,000 people today.
“It is expected that the sector will grow globally by 50% over the short term,” said the minister, adding that it would provide many employment opportunities.
It is expected that the global value of the sector will be in the region of $50 billion this year and market growth could create an additional 3 million direct jobs worldwide in the next three to four years.
"However, it is also anticipated that there will be some unmet demand, as existing centres will not be able to maintain or grow their supply for a number of reasons," the minister said.
These reasons could include talent and infrastructure bottle-necks, performance issues and the requirements of some companies to develop global footprints.
Addressing the opening day of the National BPO&O Policy Conference being held under the theme "Now and Beyond", Mpahlwa said the global increase in prices had forced many companies to cut costs, in the United States in particular.
Businesses could therefore shift certain functions of their business such as after sales servicing and data processing overseas.
"What this means is that a window of opportunity exists for us to further develop the sector in our country and to do so as rapidly as possible.
"Certainly the evidence exists that rapid development is possible. Since the launch of the Government Assistance and Support Programme in 2007, more than 25,000 direct and indirect jobs have been created and attracted R658,927,995 in investment value.
"In fact, 2007 was a landmark year for the South African BPO industry as we saw the entry of a major global BPO&O operator, TeleTech, [who] set up shop in South Africa and others entered the market either as green field operations or through acquisition," he said.
The minister said the conference will be looking to deal with policy and framework issues that will help deal with deeper market penetration for the sector.
Mpahlwa questioned whether South Africa was maximising the potential offered by the sector in terms of economic growth, employment opportunities, labour absorption and skills development.
"We find that in the Philippines the BPO&O industry there has grown from under 40,000 employees in 2004 to over 350,000 today. Yet in many respects we could and should represent a more competitive value proposition.
"This is because we have many attractive features for investors including existing levels of sophistication in the three BPO focus industry sectors of financial services, insurance and telecommunications, with additional advantages in the quality of talent pool, regulations and infrastructure.”
Furthermore, when taking the competition attrition rates into consideration, South Africa comes out fairly close to the cost model of our main competitors,” the minister said.
"And, as the cost of telecoms come down, amongst others, we are becoming more and more competitive," the minister said.
Mpahlwa highlighted that the Euro-zone will remain a strategic market for South Africa as we get to deal with service needs in real time, but at the same time we will be targeting the United States for its potential.
The minister explained that as the US was getting ready to go to bed, that South Africans were getting ready to go to work, and we could therefore deal with their service requirements over night allowing the problem to be dealt with by the time they arrived back at work the next morning.
Article published courtesy of BuaNews
