Liam Baker is Change Programme Manager at City and Guilds Group, a leader in global skills development based in the UK and is a speaker for the GSA Global Sourcing Summit in Cape Town at the start of October. As an experienced offshoring professional, we asked Liam for a sit-down to chat all about South Africa and his experience of using it as a delivery destination.
Hi Liam. Thanks for joining us today, you’re a busy man so let’s get straight to it: You’ve offshored all over the world, what do you see as being the benefits of offshoring in South Africa?
I’ve worked in programme delivery, strategic sourcing and service delivery for 10 years across various locations including India, Russia and the Middle East. But, South Africa really stands out compared to other locations.
Sourcing education solutions requires collaboration with Subject Matter Experts in the UK and when looking into locations, I identified the following criteria:
With similar time zones, I found that teams developing education solutions in South Africa could work alongside Subject Matter Experts in the UK on a normal business day. Nobody has to work outside business hours.
South Africa also has a similar education system to the UK and when you add all these factors together, it stands out as a strong destination whether in Cape Town, Durban, Johannesburg or Port Elizabeth.
I previously offshored a variety of projects to other countries such as India, but South Africa stands out as a region to deliver activity that requires a high level of collaboration with UK teams.
Thanks Liam, you mentioned India, would you say there is a large disparity in price between India and South Africa?
One thing I noticed offshoring activity to India over 5 years was the price inflation that lead to contract values increasing 5-15% yearly and this was starting to erode the cost efficiencies.
There are still very affordable solutions in India, but for this activity South Africa is on par with India for cost and it is not simply about cost efficiencies, but also the ability to scale up, how to expand capacity and how to deliver projects to customers all around the world. So, I would say that cost was only one factor of many.
If you looked solely from an affordability perspective, there may be cheaper alternatives but because quality is so important, and the requirements include a variety of factors, including an alignment between education systems and use of the English language, I feel that South Africa delivers quality solutions and still makes cost efficiencies comparatively to the UK.
How was the transition from working in India to working in South Africa?
I was very lucky that there was already an office in South Africa which gave me a platform to pilot the operation over 6 months so that if it was successful I could scale up – this is the model that I prefer to adopt.
The initial pilot was in Johannesburg and then another project followed the same principles in Cape Town.
Having a local presence made it easier and I suspect that if there wasn’t that local presence, I’d have been more likely to have partnered with a service provider who’d be able to provide the local knowledge, facilities, recruitment and support that were required to successfully pilot the activity.
And once you had made your decision were there any significant challenges when opening operations?
I think every destination has its benefits but also its unique challenges and one thing I had not anticipated was security.
The office in Johannesburg was not located in the central business district, which created some barriers in that some of the team members that were recruited were unable to be flexible with their working hours as they needed to travel in daylight due to security. This is something that has since been resolved as a result of other considerations, including connectivity.
This never became a barrier to offshoring in South Africa because ultimately it is on a similar time zone to the UK so it was rare that staff needed to come in early or stay at work late.
If you were offshoring from North America for example and wanted your staff to work US time, you’d need to make sure your offices were located in a central area within Johannesburg.
This was less of a consideration in Cape Town, although that may just be my perception and due to the more flexible approach adopted with the team so if they needed to work late, they were able to work from home/remotely.
I’d have to say that the reduced flexibility due to security would have to be the greatest challenge I experienced as I never fully appreciated the importance of getting home whilst it was light in certain areas of Johannesburg. I had the assumption it would operate like the UK, where if staff wanted to come in early, that would be something they just do, but I guess that challenge was unique to the location of the office in Johannesburg. I would expect that if you’re setting up an operation from scratch or you’re partnering with a local service provider, your office would be in more central parts of the city.
What are you looking to get out of the global summit?
For me, it will be really useful to speak to other people in the sourcing industry that have offshored activity in South Africa, just to find out about their own unique experiences.
I would like to understand more about different locations. You have Port Elizabeth and Durban where I have limited experience and it would be good to find out about these locations and the unique benefits and challenges they bring.
I think it’ll also be really useful to meet some service providers, like I said earlier I was lucky to benefit from an established office but I still think it’ll be incredibly useful to engage with local service providers who may have unique service offers or adopt different approaches.
This could include alternative sourcing models with a mix of recruiting staff but also utilising service provider talent pools - my projects have involved delivering education solutions but say I was exploring sourcing technology roles, that’s something else to consider.
In the past I explored data capture, scanning and printing, but decided not to progress further, however this is something that I could revisit.
Liam, you’re a member of the #ReshapingSourcing working groups that were put together to try and solve the problems in UK sourcing. Do you feel that the issues we are seeing in the UK are the same globally?
In the UK, there is the legacy of outsourced government contracts and the public feeling that jobs are being offshored to other countries. What I try to emphasise is that the work I am delivering in India and South Africa, is activity that was not previously delivered in the UK. Because of growth, I’ve had to look for solutions to meet customer needs, and that’s why I’ve expanded capacity, building capabilities that are difficult to build quickly or easily in London. For example, technology roles or delivering one-off projects for governments in Africa, Asia or the Middle East where there is not always available resource to deliver such projects from the UK – I try to use an international workforce to help deliver projects for customers.
Some of the challenges are the same, but internationally the issues are shown in a much more positive light, whereas domestically there is a perceived attachment to government privatisation.
Over the past weeks the government has taken over one of the prisons in Birmingham from G4S, and it’s another example of services failing and that is sometimes the perception of strategic sourcing. I think it’s good to draw the line and highlight the fact that there are many different service offers.
So that’s where we are but where would you like to see the outsourcing industry going in the next three years?
More of a multi-sourcing approach where you might have teams with different capabilities creating value collaboratively to deliver a project e.g. you are working with colleague in South Africa at the same time as you are working with a service provider in India, because they both have a unique skillset and the best way to build a capability is through a partnership. Through technology everyone is able to work together to deliver projects for the customer in an affordable way.
It is not just about cost but also using each location for its own unique capabilities.
Final question from us, for those thinking about travelling to South Africa with us in October, what is it like?
I really like Cape Town, you’ve got the beaches, the Waterfront, sights to see like the brightly coloured houses in Bo-Kaap and Table Mountain, it’s a great city and it’s not until you get there that you realise how great an opportunity it is.