Business Process Services (BPS) in South Africa, though still smaller than India's $10.9 billion offshore market, has shown potential for growth, with government incentives leading to job creation and foreign investment. The industry has successfully employed thousands through programs aimed at building a skilled workforce to attract international companies. South Africa's competitive advantage lies in its English-speaking population, service-oriented culture, and expanding broadband connectivity, making it an appealing choice for global BPO operations.

1. Business Process Services (BPS) in South
Africa, a Brave New World
To some BusinessProcessServicesmaysoundlike yetanotherconvolutedandostentatiouslabel
appliedbyself-importantpeople whomaynototherwisebe defineddue tolackof substance,product
or identity.Quite the contrary.
BusinessProcessServicesor Outsourcing,whenitdelivers,hasthe potential togenuinelylower
administrativeandoperatingcosts,more quicklyprovidenew services,improve customersatisfaction,
and enhance focusoncore businessactivities.Verysimply,theseare the people that allow business
people tofocusontheircore businesswhilstthe likesof humanresources,finance,accounting,contact
centres.DocumentManagementServices,Healthcare are takencare of by outsourcingtoa thirdparty
Withoutgettingboggeddownindetail,it'ssufficienttosaythatthere are manydivisionsof BPS:there's
the back-office,like humanresources Private label CBD; front-office,like call centres,there'soffshore
and onshore BPSand evenfurtherbreakdownsincludingITbasedITES-BPO(InformationTechnology
EnabledService) andLPO - legal processoutsourcing.
Lookingat the bigpicture:the global industryissaidtobe growingby 40% perannum.Indiaisthe
world'sbiggestplayerinthe industrywithrevenueof US$10.9 billionfromoffshore BPS.Ithasa 6%
share of the BPS industryingeneral buta63% share of offshore BPS.Onthe otherhandthe South
Africancall centre industry hasgrownby approximately8% peryearsince 2003 and itdirectlyemploys
about54 000 people,contributing0.92% to SouthAfrica'sgrossdomesticproduct.Dwarf size compared
to Indiabutthe potential ishuge.
The South AfricanGovernment'supscaledIndustrial PolicyActionPlan(IPAP2) hasidentifiedBusiness
ProcessServices(BPS) asakeysector forinvestmentattractionandjobcreation.The SouthAfrican
GovernmentimplementedaBPSor BusinessProcessOutsourcingandOffshoring(BPO&O) incentive
programme fromJuly2007. Itis claimedthatduringthe periodJuly2007 to March 2010, the incentive
resultedinthe creationof at least6 000 new jobsandattracted R303 millionindirectinvestment.
Since then,afternegotiationwiththe private sector afurtherpropositionhasbeenmade withthe
MonyetlaWork-ReadinessProgramme,adedicatedinvestorfriendlyset-upprocess,anda programme
to improve industryservice standards,inordertopositionSouthAfricaasa preferredlocationforBPS
operations.
Monyetla,whichmeans'opportunities',waslaunchedin2008 by the BusinessTrust,the Departmentof
Trade andIndustry(dti) andBPeSA asa pilotprojecttoprovide the unemployedyouthof SouthAfrica
withemploymentthroughthe BPOindustry.The pilotprojectwasa successstory,over1,000 learners
registered.Due toitssuccessthe secondphase waslaunchedinJuly2010, with3,400 learnersjoining.
Furtherphasescontinue todate.To become acertifiedemployerof choice onthe projectthere are two

2. criteria:Take on a minimumof 60 learners;andofferemploymentto70% of themupontheirsuccessful
completionof the programme.Foreverysix learnersemployed,one teamleadermustbe trained.So
there'sa veryspecificoutcome pursuedhere.
BPS leadersBPeSA,WesternCape CEOGarethPritchardisreportedto have said"WithSouthAfrica
rapidlygrowingasa BPO providerbothlocallyandabroad,itisimperative thatwe buildouremployee
base,allowingSouthAfricatomove froma reactive talentdevelopmentstrategytoaproactive one,"In
the last decade,SA hasbuiltupa reputationasa world-classcustomerservice destinationthatisable to
deliverresultsforanumberof the UK's biggestbrands,includingASDA,VirginMobile andTalkTalk.
SouthAfricahas alsoattracted manytop internationalcall-centre outsourcers,includingAegisBPO,
Fusion,Genpact,Stream Private label CBD manufacturing, SykesandTeleperformance,aswell asIBM
and Deloitte,whichprovideavarietyof servicesinEnglish,DutchandFlemishforcustomersworldwide.
Most recently,the Economicsspokesmanatthe SA HighCommissioninLondon,Yusuf Timol,forecasted
that there wouldbe huge opportunitiesloomingforcapturingIndia-basedBPOworkin2012 and
beyond.
To emphasise whetherSouthAfricahasafuture inthisindustryFrost& Sullivan'sbusinessunitleader,
ICT Africa,BirgittaCederstrom says"Africaisincreasinglypopularasa preferreddestinationof contact
centres;SouthAfricaspecificallyhasbeenanatural choice forcontact centresdue to itslarge and
articulate English-speakingpopulationandservice-orientedbusinessculture.Anotherstrengthisits
expandingbroadbandconnectivity,thusensuringthatthe latestunifiedcommunicationsand
collaborationtoolswill runefficiently."
DuringTrade and IndustryMinisterRobDavies'sBudgetVote inthe National Council of Provinces
(NCOP) inParliamenthe said"Todate,23 applicationsforthe BPSincentive schemehave been
approved,potentiallyleveragingR4.1billionworthof investmentand15 149 jobsoverthree years,"
"Close to3 400 youngtraineeswere trainedunderthe secondphase of the MonyetlaWork-Readiness
Programme,70 per centof whomwere placeddirectlyintoemployment."saidDavies
Thisbringsus to 'where'.A couple of yearsago SouthAfrica'sCall Centre Nucleusgroupwasfully
acquiredbyAegis,India'sbusinessprocessoutsourcingarmof the diversifiedEssargroup.The company
purchasedCCN as part of itsstrategyto investR500 millioninthe nextthree yearsandcreate 5000 jobs
inSouth Africa.Currentlytheyare situatedintwolocations:WoodmeadandSunninghill,bothin
Johannesburg.The total seatingcapacityof over1,300 seats.
Interactive Intelligence GroupInc.(Nasdaq:ININ) isaglobal providerof contactcentre automation,
unifiedcommunications,andbusinessprocessautomationsoftware andservices.Interactive
Intelligencehasmore than4,000 customersworldwide.Inotherwords,amajorplayerinthe BPS world.
Interactive Intelligence isabouttooccupyone of ATIO'sbuildingsindowntownJohannesburg,which
will nowfunctionasitsregional headquartersservingall of Africa.

3. Amazon,America'slargestonlineretailer,hasexpandeditscustomerservice operationsintoCape
Town,claimingtohave created600 jobsinitsfirsttwo yearsof operationandan additional 400
seasonal jobsduringholidayseason.
A R125-million,1500-seat call centre integrating,training,officeandrecreational space hasbeen
constructedto enhance the global competitivenessof the CoegaIndustrial DevelopmentZone outside
Port Elizabeth.The BusinessProcessOutsourcing(BPO) Park,coversfive hectaresandincludestraining
facilities,lounges,acafeteriaandarestaurant,isthe firstof itskindinSouthAfrica.The BPOPark is
situatedinCoega'sbusinessservice precinct,nexttoworkers'residential areas,andreplacesa200-
seatercall centre alreadyinexistence.
Thencame Fusion,anotherworldplayerinthe BPSindustry.FusionOutsourcing'sheadquarters,Fusion
House at CenturyCity,Cape Town;and the new Gautengpremisesinthe JohannesburgCBDare
modern,state-of-the artcontactcentre facilities,fromwhere almost1500 agentsandsupportstaff
delivercustomerservices Private label CBDmanufacturing.In 2011 Fusionwonthe national industry
awardsfor the 3rd consecutive time forboththe BestOffshore BPOCentre of the Year,andthe Best
Offshore CustomerService Centreof the Year.
The market forsuch centresseemsunpredictable.Anticipatingthe marketforcontactcentresa while
back, constructiongiantGrid,builtaluxuriousandstate of the art built-for-purposecall centre inMount
Edgecombe nextdoortoUmhlangaRocks. It's fullyoccupied.Onthe otherhandacursory glance
throughthe free on-line classifiedsGumtree,revealedanadvertisementfor"Call centre propertytolet
or for sale inKentAvenue,Randburg.Total GLA 6500m², 350 - 500 workstations,and185 parkingbays.
Askingrental R60/m²net or forsale at R49 mil excl VATif applicable.Available immediately."Sothere
are some surprisesoutthere fromareal estate pointof view.
Notthat longago A 27,000sqm call centre inthe Jo'burg CBD wassold,througha negotiateddeal,for
R97,5m. The seven-storeyfacilitysituatedatLaubStreetwassoldon behalf of a majorretailerandwas
snappedupby CityProperties.The propertywassoldwithatenyeartriple-nettEdconlease inplace and
ineffectisa sale and leasebacktransaction.
So itwouldbe incorrectto say that BPSis nothavingan effectonpropertysince theyare definitely
playersinthe market.But the extentthatthere isanyripple maycall for some speculation.
BPS certainlyisanindustryworthmonitoringfromacommercial real estate perspective,currentlyasa
growingnumberof internationalfirmschoose tosetupshoplocallyandlarge numbersof staff will be
requiredinspecialisedorconvertedtospecfacilities.