The document summarizes an interview with William Goldstone, CEO of KZNonSOURCE, a public-private partnership initiative in South Africa that aims to develop the business process outsourcing (BPO) sector, particularly call centers, in KwaZulu-Natal province to create jobs. Goldstone discusses the opportunities and challenges facing South Africa's BPO sector, including the need for government support through improved incentives and reduced telecommunication costs to make the country competitive internationally. He is optimistic about the sector's potential but stresses that urgent action is needed to address incentives and costs.

1. KZNonSOURCE − cresting the BPO wave
point break

2. KZNonSOURCE01
point break
the LEADING edge
KZN ‒ Cresting the BPO Wave
In this interview, CEO Magazine talks to William Goldstone, CEO of KZNonSOURCE, a BPO initiative that brings gov-
ernment and the private sector together in a bid to build KwaZulu-Natal s contact centre industry, creating jobs and
strengthening the province s economy in the process.
William Goldstone, CEO
H
ow did you come to find yourself in the busi-
ness process outsourcing (BPO) arena?
The opportunity that BPO presents for creating jobs
in South Africa attracted me to this sector. Depending on what
industry you are considering, South Africa has unemployment
figures of anywhere from 26 to 34% and the BPO environment
presents a great opportunity for government and the private sec-
tor to join hands to alleviate unemployment.
I am also attracted to this opportunity because my own so-
cial background has taught me the value of becoming involved
in projects and undertakings that can lead to the improvement
of communities and the lives of individuals, particularly unem-
ployed youth.
Howhasyourbackgroundinfluencedyourapproachto
KZNonSOURCE?
My social background exposed me to the hardships that
unemployment can create and as a result I became involved in
the trade union movements. This was very insightful because it
taught me to recognise the value and impact of a job at both the
micro and macro level of the economy.
Ultimately the experiences and influences I was exposed to
by trade unionism fuel my personal drive to bring government
and the public sector together to establish opportunities for job
creation.
KZNonSOURCE is fundamentally a public private part-
nership (PPP) and while a lot has been made of these
in recent years, they don’t seem to generate the type of
momentum that is expected of them. What makes you
confident that KZNonSOURCE won’t stumble like other
PPPs before it?
I think there are a number of valid criticisms around PPPs
and they should be properly considered so that we all learn from
mistakes that may have been made. The difference in our case
is that the eThekwini Municipality (Durban) took the initiative to
provide funding to ensure that the process of job creation and
skills development in this sector is launched. This meant, for the
first time, that a true PPP was established.
Also, this is important because once government indicates
the right mindset around an undertaking of this nature they often
prove to be very committed and willing partners. This has further
positive spin-offs because the private sector, in this case, has ap-
proached the PPP with far greater confidence than they normally
would. I believe that this is the case particularly because govern-
ment has shown them they are willing to play an active role.
In the case of KZNonSOURCE we have found that the private
sector is taking part in all the events that we have initiated, and
those events themselves have seen a greater collaboration be-

3. KZNonSOURCE 02
tween the private sector and the public sector in driving the crea-
tion of jobs and the development of skills.
There are some pretty ambitious job creation targets
linked to KZNonSOURCE. I have heard suggestions of
100 000 new jobs. Is this true?
The creation of 100 000 jobs is the target for the country. As
a region we have a target of around 20 000 jobs that we want to
create within the next three years. During the course of the last
year we have created 1 800 jobs and this is based on the initial
pipeline we have established in the contact centre industry.
We are confident of reaching these targets because we are
very focused in specific markets. KwaZulu-Natal has a huge ad-
vantage in English-speaking language skills, and on the strength
of that we have separated ourselves from the rest of the country
when we position and market ourselves to the English-speaking
market internationally.
Which market do you see as holding good potential for
South Africa’s BPO services?
There are a number of areas we are focussing on; English-
speaking Europe and the Americas – north and south – that have
English-speaking components. Within these areas we are target-
ing major corporates. At present we are focusing on pharmaceu-
tical, logistics, IT & financial services and telecommunications as
areas that offer potential.
This approach obviously positions us in a specific area and
we’ve started to develop a pipeline of clients in these areas.
We are also alert to what is going on in the market and as a
result we adapt and refine our market offering to make the most
of opportunities. For instance, in our most recent research we have
established that KwaZulu-Natal produces a large volume of the IT
skills in the country. However, these IT skills migrate to other parts
of the country because we haven’t been able to create jobs locally.
As part of an initiative with KZNonSOURCE and Smart-
Xchange we are working to retain those skills in this province.
Consequently we have also placed emphasis on IT services as a
BPO area in which we can compete.
South Africa seems to be bit of a latecomer to the BPO
market and there are some very competitive nations
like India playing in this market. What do you think
gives us a competitive advantage?
There are a number of aspects that bode well for us and give
us an advantage. Our geographic position is ideal in relation to
European markets, and our time zones are the same, so this is cer-
tainly beneficial. In areas where we are not in the same time zone,
as with the American markets, we have sufficient infrastructure to
deal with it through night shift systems.
Our biggest advantage is the fact that we have English-speak-
ing human resources available to us that are educated and under-
stand the requirements of our client base.
We do have some limitations though, the most important of
these being the lack of incentives that we could utilise to attract
foreign investors to South Africa. If we compare the incentives
that countries like India, the Philippines and Israel make available
to prospective investors it becomes apparent that we have a lot
of work to do in this regard.
It is an unfortunate state of affairs because when potential
clients come to South Africa they are very excited by what they
see. However, our cost ratio is higher than other parts of the world
and while corporates that consider South Africa as a BPO desti-
nation are generally prepared to pay more for quality, we need
to have proper incentives in place to make us a more attractive
destination.
The issue of telecommunication costs is also a concern to us
because it adds to our costs ratio. I firmly believe if we can address
these matters, we will be very competitive internationally.
How urgently do these matters have to be addressed?
I can’t stress how urgent it is to have these addressed, espe-
cially in the case of telecommunication costs. If there is some way
that government can make it happen quicker, it would assist the
industry so much more from an attractiveness perspective.
There are two important announcements that are imminent
in this regard. The one is the Electronic Communications Act, and
the other is the Final Report around the Colloquium on Telecom-
munications.This are the two critical elements that will determine
investment going forward and what type of telecommunications
cost framework we will be dealing with.
Once these announcements have been made we will be in a
better position to understand how competitive we can be from a
cost perspective compared to the rest of the world.
Areyouoptimisticthatyourrequestsforincentivesand
improved telecommunications will meet with a favour-
able response?
I am extremely optimistic. But I can’t stress how important it
is – and I think, somehow, in this specific area, government does
not fully understand the requirements of this sector. With the cor-
rect understanding, it would make it so much easier to develop
and implement corporate economic incentives and the much
needed reduction in telecommunications costs, leading to a
more competitive South African offering. Without these tools, the
task of driving reduced unemployment and skills development is
much more difficult.

4. KZNonSOURCE03
Is it fair to say that competition in the international call
centre market is heating up?
Absolutely, there are several key countries who are leading
the way such as India, the Philippines and Ireland. There are also
some countries like Pakistan who are emerging on the scene and
are very serious about taking a share of the market.
In all these countries the large BPO companies work with their
governments to attract clients to their region and obviously one of
the key aspects is the type of incentives that are made available.
What difference would an effective and up-and-run-
ning BPO sector in South Africa make to
our country?
Aside from just the question of the contribution to GDP is the
holistic question of the social health and wealth of people. When
people have jobs it translates into the reduction of crime, better
social conditions and a better way of life.
This is key for us as we believe that we can avoid other social
problems through skills development and the creation of jobs in
the BPO industry, not only in KwaZulu-Natal but the entire coun-
try. Once people have a skills set they become equipped for life
and this has an important impact not only from a financial per-
spective but also a social one.
What do you think the potential is for the development
of contact centres on the African continent?
Aside from South Africa I think there are two other African
countries that one can look toward for the development of the
African BPO sector – Ghana and Botswana. It is wonderful to see
African countries come into their own on the international stage,
but as South Africans we must recognise that these countries can
pose a serious challenge to us.
Botswana has for instance, already developed incentive pack-
ages and has people available with the necessary skills that allows
it to offer services internationally.
It is therefore important that we as South Africans get all our
groundwork in place as soon as possible and ensure that we con-
tinue to develop local skills in order to ensure that we do not sud-
denly face a skills shortage within the BPO arena over the next
few years.
What do you see as your single biggest challenge
at this stage?
To get a proper perspective on our biggest challenge I think
it is necessary to start by looking at our biggest strength and that
is that we have a very consolidated front in KwaZulu-Natal.
We have a good business plan and both the public and pri-
vate sectors have the same goals in mind and everybody is work-
ing towards the same goal.
However, the reality is that we can do as much as we want to
in terms of marketing our region and even marketing South Af-
rica, but without specific programmes in place that are designed
to benefit potential investors we will continue to be a second
place player in the international BPO market.
It may seem as if I am labouring this point but we are rapidly
approaching a situation where we will have to start proving to
the international business community just how serious we are
about winning their business.
This is something that we will not be able to achieve in isola-
tion from national government and they need to clearly show
they support our endeavours by making available packages that
underpin the efforts of KZNonSOURCE – until such time we will
always be on the back foot when competing for business.
What’s your vision for the BPO sector in South
Africa?
The BPO sector holds enormous potential. It does however
have to be managed correctly. We are already off to a good start
with all the marketing that is being done within the international
arena and the positive awareness that is being raised through
this marketing.
A critical adjunct to this is ensuring that we have the req-
uisite skills sets in our country so we can build an international
reputation as a participant in the BPO sector that has a formida-
ble resources base.
I am confident that we can make inroads into international
markets because the challenges that we face can be addressed
by tweaking our approach to the market.
What type of legacy would you like to leave behind
at KZNonSOURCE?
I would like to leave KZNonSOURCE in a position where it is
a sustainable organisation, one that continues to adapt itself to
whatever the requirements of the industry might be. In particular, I
would like it to be flexible to such an extent that it is able to absorb
a new suite of products and grow its market offering around this
new opportunity, simply by virtue of the skills it has available.
Once people have a skillsset they
become equipped for
lifeand this has an important
impactnot only from
a financialperspective but
also a socialone.
ceo
the LEADING edge

5. KZNonSOURCE 04
case in POINT
connecting
South Africa is well placed to become a favoured international location for business
process outsourcing (BPO), including call centres, particularly as companies worldwide respond to increas-
ing cost and efficiency pressures.
William Goldstone, CEO: KZNonSOURCE
T
raditionally, countries such as India and the Philippines
have led the way in servicing markets for Europe and the
Americas. South Africa is rapidly closing in on these coun-
tries, however, and has a number of factors working in its favour.
One of the main advantages South Africa has over these
countries is time-zone compatibility with Europe, and while not
similarly compatible with the Americas, has the ability to operate
effectively using night shifts. Call centre skills standards in this
country are world-class, and the country also sports a high flu-
ency rate in English, as well as neutral English accents.
A favourable exchange rate and an advanced telecommu-
nications industry also contribute towards international confi-
dence in South Africa as a viable BPO destination.
In his 2006 State of the Nation address to Parliament, President
Thabo Mbeki identified the call centre industry as one of the high-
potential sectors targeted in the government’s strategy to boost
the country’s economic growth rate and create employment.
This is where initiatives such as KZNonSOURCE, a public-pri-
vate partnership in Durban, enter the equation. KZNonSOURCE’s
key objective is to drive direct foreign investment into the Kwa-
Zulu-Natal region through the provision of contact centre and
BPO services. It has also been positioned as an industry body that
is responsible for providing territorial and market information to
prospective clients and potential investors.

6. KZNonSOURCE05
Willy Govender, CEO: bizWorks
“We have steadily begun to make inroads in the foreign in-
vestment market, particularly in the UK and US,”saysWilliam Gold-
stone, CEO of KZNonSOURCE. “Aside from the already significant
steps we have taken to prepare for further anticipated growth in
KwaZulu-Natal, we are also pleased to announce our association
with SPG Media, through our national industry body, SACCCOM
(South African Contact Centre Community). This will assist us to
attract corporates in the European and American markets.”
Thanks to the efforts of KZNonSOURCE and its partners, the
region is steaming ahead with regards to growing its footprint,
both locally and with international clients. “It is clear, therefore,
that we provide a solid platform for investors to understand local
conditions,” says Goldstone. “We also assist in establishing rela-
tionships with local service providers.”
Goldstone adds that the initiative revolves around value –
bringing value to customers, offering a sound value proposition,
and enabling a value network. “We know that we offer this to
our clients,”he says.“Combined with our passion for growing the
industry and creating jobs, it is our commitment to offering value
that sees us moving streaks ahead of our competitors.”
case in POINT
Passionate About KZN
BizWorks is a call centre situated in Durban, and has a very
close partnership with KZNonSOURCE. “From a broad perspec-
tive, it’s great to work with an industry body that actively pro-
motes and markets the region internationally,” says Willy Goven-
der, CEO of bizWorks.
“KZNonSOURCE provides us with networking opportunities
that are so important for us to make international contacts. From
a logistics point of view, they have also helped us with obtaining
visas and work permits for some of our UK clients. What’s great
about KZNonSOURCE’s marketing drive is that it filters through
prospective clients, ensuring that we are brought into contact
with those who have already bought into the idea that KwaZulu-
Natal is the right location for them. After that, it’s up to us to
help them understand why bizWorks would be the best partner
in their offshore endeavours.”
Govender also says that an initiative such as KZNonSOURCE
allows industry players to work together, leveraging the knowl-
edge and expertise that each organisation brings to the table.
“Although we are often competing for the same business, it is
important for us as an industry to present a united front,”he says.
“What is good for the industry in this region is good for individual
businesses, and so working together has its advantages from a
number of perspectives.”
Govender is firmly convinced that call centres based in Kwa-
Zulu-Natal have a lot to offer international clients that many other
centres don’t. “From a voice neutralisation perspective, KZN has
an advantage,”he says. “We also have a very large English-speak-
ing base from which to draw agents, and the time zone we fall in
is favourable, especially for European clients.”

7. KZNonSOURCE 06
Suleman Shaik, CEO: Direct Channel
He also believes that KZNonSOURCE’s involvement in the
industry is a competitive advantage. “No other South African
city has as much local government support for the call centre
industry,” he says. “Our international contacts are often taken
aback when they find out that KZNonSOURCE is a government
agency and not a private sector broker. The eThekwini munici-
pality is taking up the challenge to provide jobs and skills for the
region, and through that commitment is succeeding in grow-
ing the local economy.”
BizWorks is also committed to improving the skills set of the
region, and does so through its own skills development academy,
where in-house training is offered to employees. “Every job we
create helps create another two jobs further down the economic
value chain, and we remain very aware of that impact,”says Gov-
ender.“We also believe that by having a diversified workforce, we
offer clients a holistic solution to their call centre needs.”
Last year, bizWorks participated in a very successful learner-
ship programme with the Services SETA, where 75 learners were
engaged in a programme that saw 55 of them employed per-
manently at the company. “It is great to see learners work their
way into permanent positions in the company,” says Govender.
“However, we still lack skills at management level, and that is one
of the challenges we are addressing this year.”
Making Every Call Count
With its head office in Johannesburg, and call centres in Cape
Town, Durban and Worcester, it’s hard to believe that Suleman
Shaik started Direct Channel, an outsource call centre business,
with only six seats in 2004.
“We now have 1 200 seats countrywide, and are in the proc-
ess of adding another 600 to our Johannesburg operation,” says
Shaik, CEO of this fast-moving company. “In Durban, we started
with a 50-seat pilot, and grew to 750 seats within nine months.
This translates to employment of around 820 people, if one takes
the support staff into account.”
Rapid growth aside, perhaps one of the most unique fea-
tures of Direct Channel is that Shaik insists on only employing
the unemployed. In other words, not poaching from competi-
tors, or dipping into the already existing skills pool of employed
call centre agents.“In this way, we create jobs instead of shuffling
them around the industry,”he says.“Also, we have found that this
employment method has lowered our own staff turnover, and
helped to build better employee loyalty.”
Employing the unemployed comes with its own challenges,
however, most notably equipping them with the required skills.
To this end, Shaik created the Direct Channel Academy. “Rather
than outsource our training and end up passing that cost on to
our clients, we decided to keep the function in-house, and em-
ploy trained professionals to train our employees,”he says.“In this
way, we ensure that their training is specific to the Direct Channel
environment. It also assists us in meeting our skills capacity needs
internally, without having to rely on others.”
In Durban, Shaik works very closely with KZNonSOURCE. “We
see our relationship with this initiative as a partnership,” he says.
“They assist us with leads for new clients, and we assist by creat-
ing new jobs within the sector as part of their pipeline.”
Each region that Direct Channel operates in has its own chal-
lenges, and Shaik says that one strategy will not work for all re-
gions.“In Johannesburg, we face the problem that most large cor-
porates have their own call centres, resulting in agents continually

8. KZNonSOURCE07
Theodora Ngidi, CEO: NT Ngidi Consulting
churning from outsourcers to corporates,”he says.“The CapeTown
situation is different in that many international captive call centres
have based their operations there, resulting in agent churn from
one call centre to another.”
In Durban, Shaik says after-hours transport is a problem, as the
call centre is located in the CBD, and very little public transport is
available after 18:00.
Direct Channel’s call centre in Worcester is small – 40 seats
– and is operated in partnership with The Institute for the Blind.
“This call centre has been a great success,”he says.“Blind and par-
tially sighted employees take much longer to train, as the pro-
gramme is intensive and different from usual training, but the
benefits we have reaped are well worth the investment.”
Shaik sees Direct Channel’s agents and the technology it em-
ploys as the company’s two greatest assets. “Our agents have a
very high level of commitment, and are very loyal to our company
and our brand,”he says. “Loyalty is an intangible asset, but lack of
it would definitely affect a business negatively.”
On the technology front, Shaik ensures that Direct Channel
partners with internationally recognised brands and has appoint-
ed leading local IT companies to implement and manage the tech-
nology infrastructure. “We also have an in-house IT development
team who work closely with our technology partners, to ensure
that we stay at the cutting edge of technological developments
in the BPO industry,”he says.“Through our technological advances
and our commitment to our people, we aim to be the preferred
employer in the BPO sector in every region in which we operate.”
Specialised Solutions
Owned and operated by Theodora Ngidi, NT Ngidi Consult-
ing is a recruitment consultancy with its head office in Durban,
and branches in Johannesburg, Cape Town, Pretoria and Port
Elizabeth.
Although the business does not yet have formal ties with the
KZNonSOURCE initiative, Ngidi has established a relationship that
she feels will be mutually beneficial to both parties in the future.
“We are a recruitment consultancy, and we are therefore ex-
posed to the amount of people looking for jobs, particularly in
Durban,”she says. “When initiatives such as KZNonSOURCE come
along we support them, because they are committed to creating
more jobs in the region, which enables us to assist those looking
for employment through our consultancy.”
Ngidi also mentions that KZNonSOURCE’s network of interna-
tional contacts is an advantage, as her organisation is interested
in attracting international business. “The networking opportuni-
ties that have been made available to us through various forums
and meetings are great,” she says. “We definitely see our relation-
ship with KZNonSOURCE growing in the future.”
From a recruitment point of view, Ngidi stresses that her
consultancy believes that success only comes from having the
right tools for the job, and using them effectively. “Our approach
is very thorough,” she explains. “We screen, assess and test every
applicant, and we believe in doing our homework when it comes
case in POINT
to sourcing and selecting candidates for specific industries. For
example, in the call centre industry, we have researched the quali-
ties necessary for successful employment and make sure that our
candidates are above average in this regard.”
In order to continue delivering superior service, Ngidi also
believes in continually benchmarking against other similar or-
ganisations, both locally and globally. “We know that our qual-
ity is outstanding – we have received many awards and ratings
to that effect,” she says. “However, in order to stay that way, and
improve even further, I believe it is necessary to analyse the in-
dustry carefully on a regular basis to determine where you fit in.
Once you have established this, it is also important to capitalise
on your strengths and set in motion a plan to improve those

9. KZNonSOURCE 08
areas where you are not so strong.”
NT Ngidi Consulting has committed itself to operating pro-
fessionally, and offering clients customised solutions.“There is no
such thing as one-size-fits-all in our industry,”she says.“Businesses
need to thoroughly analyse their clients’industry, unique position
within that industry, and their needs regarding recruitment. Only
then can one offer an effective solution.”
Although it is still early days, Ngidi is optimistic about her
business’relationship with KZNonSOURCE. “This initiative is good
for Durban – the positive effects are already showing,” she says.
“And what is good for Durban is good for NT Ngidi Consulting!”
Developing Durban
Based in Durban, SmartXchange is a technology innovation
node and a dynamic, young business incubation centre estab-
lished to promote and support the region’s vision to be the tech-
nology hub of Africa.
SmartXchange is an example of a successful public private
partnership initiative within the ICT industry, and it was estab-
lished for the purpose of developing the business base of this
industry in South Africa.
“SmartXchange was formed about two years ago, and focus-
es on small to medium enterprises, transforming their operations
into successful businesses,”says CEO Martin Cele.“We want to as-
sist the region in building a pool of expertise that will give it a
global competitive advantage.”
It is for this reason that SmartXchange has partnered with
KZNonSOURCE in its contact centre/BPO service, which also fea-
tures Durban Investment Promotions Agency (DIPA) and Trade
and Investments KZN (TIKZN) as partners. It has already proved
successful and Cele is confident that the local contact centre in-
dustry will create at least 5 000 new jobs over the next 5 years.
“Traditionally the success of technology hubs or business in-
cubators is based on the performance of their tenants,”says Cele.
“We have gone a step further and developed a model based on
the collective successes of hubs around the world, and built them
into SmartXchange. These include combining the strengths and
skills of the private and public sectors, giving us the ability to be a
vehicle that facilitates partnerships, SME growth and skills devel-
opment. Our role will be to actively promote these partnerships,
thereby bringing investment into the region through identifying
key growth areas.”
SmartXchange is involved in other projects as well, one of
which is the development of a number of cost effective municipal
administration systems, some of which are already in use by the
eThekwini Municipality. “We hope to market these applications
to other local authorities, thus helping improve service delivery
across the country,”says Cele.
Aside from SmartXchange’sincubationcentre,whichprovides
a platform for SMEs to obtain support while growing their busi-
nesses, Cele says that the organisation has an ongoing project
that focuses on e-learning. “This includes both formal and infor-
mal learning, and is in line with the City’s drive towards becoming
Martin Cele, CEO: SmartXchange
a‘Learning City’,”he explains.
SmartXchange is also involved in upgrading the skills of exist-
ing SMEs.“We currently assist 18 SMEs with various functions from
a skills development perspective,”he says.“We perform a skills au-
dit for these businesses, and then assist them in filling the gaps.
We want to see the roll-out of a greater number of SMEs servicing
key growth areas in KZN.”
Cele adds that this kind of development will position the cen-
tre as the premier vehicle for attracting ICT-related investments.
“We have upgraded our facilities and the look and feel of our of-
fices,” he says. “We have the capacity to host up to 20 SMEs in a
high bandwidth environment.”
Cele believes that partnering with organisations such as
KZNonSOURCE and other like-minded entities can only be ben-
eficial for both Durban and the region. “We need organisations

10. KZNonSOURCE09
that are passionate about creating jobs and improving skills sets
in the province,”he says.“It’s great to work with people who mean
it when they say they want to develop KZN.”
Team Effort
UK company Talking Shop operates domestically from its of-
fices inYorkshire, as well as from an international call centre in Dur-
ban. It markets its services to over 40 million existing mobile phone
users in the UK, and utilises state-of-the-art technology to do so.
Having this UK-based contact centre operate from Durban
is a big feather in the cap of KwaZulu-Natal, and reinforces the
province’s drive towards being internationally competitive. “Cur-
rently, Talking Shop is not directly involved with KZNonSOURCE,”
says CEO Jess Watts. “However, our plans for our future in South
Africa are certainly intertwined with theirs.”
Although Talking Shop does not yet have a direct association
with KZNonSOURCE – and Watts says this is planned for the next
twelve to eighteen months – the company is already participating
in events arranged by the initiative, such as an upcoming awards
ceremony that is planned for later this month. “William and I have
chatted about KZNonSOURCE’s plans, and I am pleased to see that
Jess Watts, CEO: Talking Shop
case in POINT
they are good for Durban and the province as a whole,”he says.“We
are therefore prepared to offer our support to the municipality in
the meantime, because we believe that their initiatives will benefit
the businesses within the province.”
When asked about his contact centre in Durban, Watts makes
a point of explaining that he is fully aware that his staff pays his
wages, not the other way around. “Without my team, I wouldn’t
have a business,”he says.“I always keep that in mind when making
decisions that would affect my team, as it is important to me that
they are happy and comfortable within their environment, and
are being rewarded for hard work and performance.”
Training is vital to his operation, and Watts offers specialised
in-house training, which usually runs for a duration of three weeks.
“The training is intensive, and is particular to Talking Shop and
the way we do things,”he says. “Another unique factor is that our
trainees are paid while they are training – something that doesn’t
happen often in this industry.”
Watts also believes in keeping the lines of communication
within his organisation clear and open. “The reporting structure
within Talking Shop is clearly defined,” he says. “There are con-
stant reviews of the way things are done, and the staff participate
in these reviews. They are, after all, the ones who the structure
affects most. We also have a fantastic support structure for our
agents, and the people within this structure really contribute to
making the operation a team effort.”
Although Watts and his team are at the forefront of proactive,
employee-centric practices when it comes to training, recruit-
ment and retention, Watts does mention that one of his chal-
lenges is finding quality, experienced agents. “The skills pool in
this country needs to be increased dramatically,”he explains.“That
is why we have placed such an emphasis on training, and that is
also why we have established a relationship with KZNonSOURCE.
We believe that their initiative is one that will bring a greater skill
set to the industry in this province, and will improve the skills cali-
bre at the same time.”
Opportunity Knocks
Velociti is a South African company that services the call cen-
tre and BPO markets. “We specialise in bringing world-class cus-
tomer service and cost savings to both international and local UK
clients,” says Craig Ireland, CEO. “We have a sales and marketing
office in London and our operations are based in Durban, so we
are able to offer the convenience of local relationships with the
advantage of offshore operations.”
Operating in Durban, it was a natural progression for Velociti
to become involved with the KZNonSOURCE initiative, and Ireland
says that through this relationship his company hopes to bring
more business to South Africa. “Currently, we service a number
of markets including financial services, insurance, telecommuni-
cations, retail and technology industries,”he notes. “South Africa’s
highly advanced financial services and insurance sectors make
the country extremely attractive to companies in these sectors
that wish to outsource their call centre and BPO operations.”
Velociti’s commitment to the KZNonSOURCE initiative is evi-

11. KZNonSOURCE
One of the challenges Ireland and his team face is one that
is echoed throughout the BPO industry in South Africa – a short-
age of skills. “This is why we believe that our partnership with
KZNonSOURCE is so important,”he says. “They are committed to
alleviating the skills shortage by assisting in creating thousands
of jobs over the next three years in KwaZulu-Natal. That will be a
major boost for the sector in this region, and make it even more
attractive to international companies looking for a base from
which to operate.”
Ireland also mentions the lack of a structured incentive
scheme from government for attracting foreign investment, a
point that KZNonSOURCE’s Goldstone also feels strongly about.
“South Africa has a window of opportunity in which to get its
house in order regarding the packages it should be offering to
international clients,” says Ireland. “That window will not remain
open forever – international trends in our industry have shown
that other countries are champing at the bit for international
business. More importantly, they have good government incen-
tives lined up and unless South Africa does the same, it will lose
the race to attract international clients.”
No holds barred...
According to www.southafrica.info, research published in
November 2004 by independent analysts Datamonitor, predict-
ed that South African call centre numbers would double by 2008,
and rated South Africa ahead of India for quality of service.
Datamonitor predicted that there would be 939 call centres
in South Africa by 2008, almost double the number of 494 in
2003 – a compound annual growth rate of 14% over the period.
According to this research, South Africa offered outsource
providers a higher quality, more culturally aligned front-office
and back-office location, with labour costs running at about two-
thirds of their US or UK equivalents.
These findings were echoed in a report released in 2005 by
the Ion Group, which polled many of the UK’s top 1 000 com-
panies for their ideal offshore location, and ranked South Africa
ahead of India, Mexico and the Philippines.
For global firms, South Africa slots in between near-shore
locations such as Canada, Mexico or Eastern Europe, which of-
fer close proximity and also cultural affinity to domestic markets,
and more traditional offshore locations, such as India and the
Philippines, that offer cheap labour.
Datamonitor also confirms that South Africa leads Africa’s
BPO sector – a feat that is surely attributable to initiatives such
as KZNonSOURCE that have succeeded in bringing the public
and private sectors together in a bid to grow the industry in their
regions, and the country as a whole.
There is clearly no stopping KZNonSOURCE, and the indus-
try in KwaZulu-Natal. They have proved themselves a force to
be reckoned with, and those who monitor developments in
this sector over the next few years will certainly come across
KZNonSOURCE time and again.
10
Craig Ireland, CEO: Velociti
ceo
dent in its active participation in developing the call centre and
BPO industry in KwaZulu-Natal. “We involve KZNonSOURCE in
our client visits, capitalising on their knowledge and expertise
when it comes to the industry in this region,” explains Ireland.
“We also participate in local events relating to the industry, and
there are definitely open lines of communication between the
two organisations, providing a good platform for constructive
feedback and matching value propositions. It is great to have a
direct link to the city’s perspectives on the growth of the region
as a whole, and our industry in particular.”
Ireland believes that there are a number of factors that set
Velociti apart from its peers, and one of those is the fact that the
development and growth of people is core to the company’s
business model.“We try to ensure that our people come to work
with their hearts and minds, not just their hands and feet,” he
says. “If people have a positive attitude, they will be prepared to
go beyond the‘script’, and become confident in their abilities.”
The end result Velociti is looking for is for its people to focus
on the customer and to deliver world-class service that ensures
customer loyalty and retention. “We therefore train very specifi-
cally,” he says. “We call it the Velociti Way, and it involves brand-
specific training that exchanges the old practice of co-existing
with the new business model of co-creating.”

12. The Atrium Building, SmartXchange, 5 Walnut Road, Durban, 4001, South Africa
Tel: +27 31 311 1964 , Fax: +27 31 304 9903 , e-mail: berrimant@durban.gov.za, www.kznonsource.co.za
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