This research report is entitled: „An investigation into the attractiveness of South Africa as offshore destination for call centre services to the UK“. An important objective of this research report was to investigate the factors and key issues that determine South Africa’s attractiveness to deliver offshore call centre services to the UK, largely from the perspective of existing call centre outsourcers with their recent and first-hand experience and expertise in this industry. The ultimate objective was to determine the attractiveness of South Africa for UK call centre offshoring.
To achieve the above, it was determined that a combination of qualitative, investigative research combined with a quantitative approach would be conducted with data gathering. Primary research was done by conducting in-depth interviews with individuals holding management positions with established call centre outsourcers in South Africa to determine the attractiveness of the location.
Overall, it was found that South Africa is averagely attractive for UK call centre service offshoring. Outsourcers highlight that at present offshoring is, because of the global economic climate, a very difficult market to be in. However, if South Africa addresses challenges successfully (e. g. skills shortage in middle management) it can build the right foundation to grow the industry for the future. The location is attractive as it offers cost savings when compared to the UK client market but other locations outperform South Africa in this respect. Therefore, the location is only attractive for a UK niche market as a cheaper but nonetheless premium location that delivers additional benefits relevant to UK business which other locations do not offer. These can be found in service delivery and quality and South Africa’s alignment with Western industry standards.
Table of Contents
CHAPTER 1: INTRODUCTION AND PROBLEM STATEMENT
1.1 INTRODUCTION
1.2 RESEARCH PROBLEM STATEMENT
1.3 IMPORTANCE AND CONTRIBUTION OF THE RESEARCH REPORT
1.4 ASSUMPTIONS AND DELIMITATIONS
1.5 PRELIMINARY LITERATURE REVIEW
1.6 SUBSEQUENT CHAPTERS OF THE REPORT
CHAPTER 2: LITERATURE REVIEW
2.1 INTRODUCTION
2.2 OFFSHORE SOURCING OF CALL CENTRES SERVICES
2.2.1 Firm motivations for offshore sourcing
2.2.2 Outsourcing in the call centre offshoring scenario
2.2.3 Trends in global call centre services and outsourcing
2.2.4 Determining location attractiveness
2.2.5 Summary
2.3 THE UK CLIENT MARKET
2.3.1 Economic outlook
2.3.2 The UK call centre industry
2.3.3 Selected offshore destinations
2.3.4 Summary
2.4 OFFSHORE DESTINATION SOUTH AFRICA
2.4.1 The South African economy
2.4.2 The South African call centre industry
2.4.3 Offshore call centre outsourcers in South Africa
2.4.4 Offshore captive call centres in South Africa
2.4.5 Summary
2.5 SOUTH AFRICA AND FACTOR ATTRACTIVENESS
2.5.1 South Africa’s business environment
2.5.2 People skills and availability
2.5.3 Financial attractiveness
2.5.4 Summary
2.6 SUMMARY
CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY
3.1 INTRODUCTION
3.2 RESEARCH DESIGN
3.3 SAMPLING
3.4 DATA COLLECTION
3.5 DATA ANALYSIS AND CONCLUSIONS
3.6 STRENGTHS AND SHORTCOMINGS
3.7 SUMMARY
CHAPTER 4: ANALYSIS AND INTERPRETATION – PRIMARY RESEARCH
4.1 INTRODUCTION
4.2 GROWTH AND DEVELOPMENT OF SOUTH AFRICA’S OFFSHORE CALL CENTRE INDUSTRY
4.3 THE UK CALL CENTRE CLIENT MARKET
4.4 MOTIVATIONS FOR OFFSHORE SOURCING
4.5 OTHER OFFSHORE LOCATIONS RELEVANT FOR THE UK CLIENT MARKET RATED
4.6 SOUTH AFRICA’S LOCATION ATTRACTIVENESS RATED
4.7 SOUTH AFRICA’S LOCATION ATTRACTIVENESS – THE EVALUATION FRAMEWORK APPLIED
4.8 OTHER ASPECTS AROUND THE OFFSHORE LOCATION SOUTH AFRICA
4.8.1 Aspects around perceptions of the offshore location
4.8.2 Aspects around positioning as offshore location
4.8.3 Aspects around call centre activities
4.8.4 Aspects around vertical markets
4.8.5 Aspects around language availability
4.8.6 Aspects around government incentives
4.8.7 Aspects around the role of the domestic call centre market
4.8.8 Aspects around South Africa’s urban regions
4.8.9 Aspects around attracting offshore business
4.8.10 Aspects around the role of global outsourcers
4.9 WRAPPING UP
CHAPTER 5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 INTRODUCTION
5.2 REVIEW OF SECONDARY RESEARCH RESULTS
5.3 REVIEW OF PRIMARY RESEARCH RESULTS
5.3.1 Introduction
5.3.2 Review of growth and development of South Africa’s offshore call centre industry
5.3.3 The UK call centre client market
5.3.4 Motivations for offshore sourcing
5.3.5 Other offshore locations relevant for the UK client market rated
5.3.6 South Africa’s location attractiveness
5.3.7 Other aspects around the offshore location South Africa
5.3.8 Outlook and recommendations
5.3.9 Conclusion
5.4 CONCLUSIONS
5.5 RECOMMENDATIONS
Research Objectives and Themes
The primary objective of this research is to investigate the factors and key issues determining South Africa's attractiveness as an offshore destination for call centre services serving the UK market. The study aims to understand why UK firms and outsourcers choose South Africa, to evaluate its current standing, and to identify challenges and strengths from the perspective of established industry participants.
- Analysis of the global offshore sourcing phenomenon and market motivations.
- Evaluation of South Africa's competitive position compared to established locations like India and the Philippines.
- Assessment of the UK call centre client market and its specific service requirements.
- Identification of key country-level metrics (business environment, skills, financial attractiveness) impacting investment.
- Review of government incentives and their effectiveness in promoting the industry.
Excerpt from the Book
4.2 GROWTH AND DEVELOPMENT OF SOUTH AFRICA'S OFFSHORE CALL CENTRE INDUSTRY
For respondent B, offshoring became a feasible option around 2002 when the South African market realised that there was an opportunity to service the UK client market which appeared large and untapped. An attractive fit was observed in perceived similarities like cultural alignment, of South Africa’s call centre service quality being of a similar standard to the UK, the understanding that the UK consumer is adaptable to the South African accent and way of doing things who would therefore be comfortable with the service, the time zone and, importantly, the benefit of a lower cost of service attached. This was seen as a convincing value proposition in times when there was negative news on other offshore locations like India and the Philippines (Respondent B).
South African call centre outsourcers, Dialogue Group, started offshoring even earlier in 1999, an innovative move at the time. Dialogue Group was successfully positioned in the domestic financial services niche market and had UK shareholders, like UK bank CapitalOne, which became a key driver for establishing offshore services by sending contacts and business to South Africa. The company did very well until the UK went through a recession around 2009 when two clients liquidated, causing significant losses to Dialogue Group. Dialogue Group liquidated in 2010 (Respondent A).
Another early mover was Call Centre Nucleus which went for offshore exposure and international business in 2002. The company engaged a senior manager from the US who brought global outsourcing and offshoring expertise to the company (Respondent B). The company is hosting next to several domestic offshore campaigns like Virgin Media, British Gas and others. Call Centre Nucleus was recently acquired by Aegis which is a growing global outsourcer expanding rapidly. Aegis is seen as an important player to potentially drive South Africa’s offshoring positioning internationally because of its expansion and overall level of offshore activities (Respondent C).
Summary of Chapters
CHAPTER 1: INTRODUCTION AND PROBLEM STATEMENT: This chapter introduces the topic of offshore call centre sourcing, outlines the research purpose and questions, and clarifies the significance of studying South Africa as a destination for UK services.
CHAPTER 2: LITERATURE REVIEW: This chapter provides the theoretical background, defining core concepts like offshoring and outsourcing, discussing the UK client market, and establishing a framework to evaluate country-level location attractiveness.
CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY: This chapter details the qualitative and quantitative methods used to collect data, including semi-structured interviews with senior managers at established South African call centre outsourcers.
CHAPTER 4: ANALYSIS AND INTERPRETATION – PRIMARY RESEARCH: This chapter presents and interprets the findings from the interviews, focusing on the growth of the industry, motivations for sourcing, and the evaluation of South Africa's attractiveness metrics.
CHAPTER 5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS: This final chapter synthesizes the secondary and primary research findings, draws conclusions on the overall attractiveness of South Africa, and provides recommendations for future research and strategic improvements.
Keywords
Offshoring, Outsourcing, Call Centre, South Africa, UK, Location Attractiveness, BPO, Customer Experience, Business Process, Cost Savings, Labour Market, Service Quality, Industry Standards, Management Skills, Economic Development
Frequently Asked Questions
What is the core focus of this research report?
The report investigates the attractiveness of South Africa as an offshore destination for call centre services specifically targeting the UK market, utilizing both primary and secondary data to assess current trends and future viability.
What are the central themes examined in this study?
The central themes include the motivations for offshore sourcing, the assessment of South Africa's business environment, human capital and skills, financial attractiveness, and the competitive landscape versus other destinations like the Philippines, India, and Egypt.
What is the primary objective of this research?
The primary objective is to gain a deeper understanding of why UK firms and outsourcers choose South Africa, and to identify the critical factors that impact its long-term sustainability and attractiveness for offshore operations.
Which scientific methodology was utilized?
The study employs a qualitative, exploratory approach complemented by quantitative elements, featuring in-depth, semi-structured interviews with senior managers at established call centre outsourcers in South Africa and the UK.
What topics are covered in the main body of the report?
The main body covers the global phenomenon of call centre offshoring, a detailed economic and industry analysis of the UK client market and South Africa, and an evaluation of specific metrics such as infrastructure, language proficiency, and cost structures.
Which keywords best characterize this work?
Key terms include offshoring, outsourcing, call centre, South Africa, UK client market, location attractiveness, BPO, labour cost, and service quality.
How is South Africa currently positioned in the offshore call centre market?
The research concludes that South Africa is currently viewed as an averagely attractive, niche offshore location, providing high-quality, value-based services rather than competing solely on lowest-possible costs.
What role do government incentives play in South Africa's offshore strategy?
Government incentives, particularly financial grant programs, are seen as vital to lowering operational costs and increasing the competitiveness of the South African offshore industry, although their effectiveness is often hampered by current market conditions and lack of awareness among potential UK clients.
How do middle management skills affect the industry?
A shortage of skilled middle management is identified as a significant challenge; this lack of experience and leadership maturity can hinder the execution of complex offshore campaigns expected by Western business standards.
- Citation du texte
- Anita Hintringer (Auteur), 2012, The attractiveness of South Africa as offshore destination for call centre services, Munich, GRIN Verlag, https://www.grin.com/document/229918
