Industry news

South Africa is steadily asserting itself as a key global hub for the BPO, LPO and call centre services sectors in 2017 and beyond.

Ranked 74th on the World Bank's ‘Ease of doing business report’, it is placed well above those regions it views as being its main competitors - India (130) and the Philippines (99) - scoring highly in topics such as protection of minority investors, obtaining credit and paying taxes. What’s more, The World Economic Forum ranked South Africa among the top 50 countries, noting its innovation investment (making South Africa the region’s most innovative economy), its efficient financial markets (placing among the top 15 in the world) and its strong institutions and robust legal framework. Plus, of course, South Africa recently won the ‘Outsourcing Destination of the Year 2016’ at the GSA UK Awards, it’s third victory in the category in five years.

The sourcing delivery destination has been working hard to continuously improve the business environment that the country can offer. The first world infrastructure is a particular draw for service providers, with world class airports, good road systems and a capable digital infrastructure. With such a robust telecoms and transport infrastructure already in place and well established, the cost of operating a business in the country has been rapidly falling, making it an attractive competitor for business investment. Thanks to time zone similarities (South Africa is two hours ahead of the UK) and direct flights from London airports, South Africa also claims an advantage over its competitors with ease of access.

The highly skilled and English speaking workforce is also comparatively cheap, with wages roughly half that of the equivalent UK worker. South Africa’s strong higher education system provides plenty of graduates with perfect English language skills. Alongside this, many South African companies have been using impact sourcing, a practice supported by the Rockefeller Foundation, designed to reduce poverty by offering career development opportunities to people who otherwise would have limited prospects for formal employment due to poverty.

Many large organisations have already set up operations in South Africa including Amazon.com, Bloomberg, TalkTalk, Lufthansa and British Gas. Four of the leading six UK contact centre service providers have operations in the country including Capita and Serco, and organisations such as State Street, Old Mutual and Prudential also leverage South Africa’s robust legal and financial services systems as well as its pool of talented graduates. Further, numerous leading law firms already have operations there, including Eversheds, Hogan Lovells and Pinsent Masons.

Summary

Thanks to low comparative costs, the high standard of living and the comparatively low risk stability of South Africa in the region, many will consider South Africa a great option for shared services and contact centre services. Boasting a vibrant and dynamic democracy with a credible opposition, the South African economy and business future will continue to offer great potential for a wide variety of services. The OECD predicts economic growth to strengthen in 2017 and 2018 thanks in part to continuing infrastructure improvements, consumption and investment.

Although the South African government needs to stick to its consolidation path to maintain its competitive business environment, the region has undoubtedly risen above its competitors for the past decade and will remain a key market for BPO, LPO and call centre services sectors for the foreseeable future

UK inflation rose to 1.2% in November, the highest figure since October 2014. Clothing, restaurants and fuel were responsible for most of the rise with falls in air fares, non-alcoholic drinks and food. Many expect the weaker pound to push up prices over the coming years. For more information, click here.

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Microsoft has awarded Accenture a seven-year contract extension to continue providing finance and accounting and procurement business process services. Accenture will leverage artificial intelligence, automation and analytics capabilities to deliver better business insights and help Microsoft increase productivity and efficiency. Sean McNamara, managing director for Accenture’s Communications, Media & Technology business, said, “Our relationship with Microsoft is one of the industry’s great examples of what two organizations can achieve in a long-term, sustained collaboration that’s focused on driving business outcomes.”

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According to ComputerWeekly.com, KPMG has warned British business not to be complacent over GDPR requirements because of Brexit. Despite uncertainty as to the future of Brexit negotiations, GFPR requirements will still be followed to trade in the Euro Zone. GDPR regulation will attempt to unify data protection rules from across the continent. To read more about GDPR requirements, click here.

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A plan to reduce traffic congestion on London’s roads by increasing the use of technology will be discussed by TfL’s board in the coming days. TfL’s open data strategy which provides information for developers to create new products has already spawned over 500 applications according to Publictechnology.net. TfL will work with the likes of Google to create new programmes to reduce congestion. If you want to read more on the story, click here.

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An interesting article in The Economist about the use of digital manufacturing caught my eye this week. A new firm named Vanguard hopes to compete with the big motorcycle producers by using digital manufacturing and 3D computer manufacturing where the product exists and can tested in the digital world well before it is in the physical one. The motorbike was unveiled to the New York Motorcycle show earlier this month.

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The British Chamber of Commerce (BCC) has predicted that the UK economy will face slower growth in the future, as worries about Brexit and higher inflation hit consumers and business. Crucially, the BCC predict that the UK will avoid recession but will lose momentum as the effects of the weaker pound push up the cost of imports, eroding purchasing power. You can read more of the story here, at the Guardian website.

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The Supply Chain Resilience Report, published by the Business Continuity Institute and supported by Zurich Insurance Group has highlighted that supply chain disruptions have fallen from 74% to 70%. However, the report says that worryingly, supply chain disruptions have cost one in three organisations more than €1m in the last year. To read more of the story, visit SupplyManagement.com.

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The BBC have reported that a Turkish hacking group has turned web attacks into a game by rewarding people who successfully hit designated targets. Hackers score points for breaking into sites owned by companies that oppose the Turkish government which can then be cashed for prizes. To read more about this, click here for the BBC article.

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According to Reuters, Britain’s trade deficit narrowed in October although there were little sign exports were getting much help from sterling's fall. However, the previous three months of trade deficit was revised upwards, dampening the good news. Official figures also showed a fall in construction output which, along with industrial production figures from earlier in the month, offered a less cheery picture of the economy than upbeat business surveys. To read more, click here and visit the Reuters site.

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