R50m BPO boost for Bloem

Johannesburg, 05 Mar 2009

Bloemfontein will host an international business process outsourcing and off-shoring (BPO&O) hub in the next five months.

The Mangaung Local Municipality has entered into a partnership with Fujitsu Services, UniNet Communications, Cisco and Microsoft to implement the project. The municipality says these partners will initially invest R50 million in the development of the hub.

Titled the Re Hodisa Moruo project, the city says the hub will be implemented in three phases. The first stage will be the improvement of the municipality's telephony system between its two main buildings. This will be followed by the opening of a training centre for skills development. The final step will be the implementation of the call centre facility, which will be tasked with dealing with customer-related tasks.

The city says the BPO&O hub will aim to use the expertise of its partners to provide solutions that will “initially focus on improved efficiency of basic service delivery, stimulating local economic development, accelerated readiness for the World Cup 2010, and improved communication with the community”.

The municipality also states “there will be no job cuts” - responding to questions about this common concern, which often accompanies BPO projects.

Bigger objectives

The municipality says its initiatives fall in line with efforts by the Department of Trade and Industry (DTI) to promote SA as a key BPO&O destination.

Former president Thabo Mbeki, in his 2006 State of the Nation address to Parliament, identified the call centre industry as one of the high-potential sectors targeted in government's strategy to boost the country's economic growth rate and create employment.

In the same year, Cabinet adopted plans which selected the BPO industry as a key sector for national development. In an effort to accelerate local economic growth, the DTI introduced a state incentive scheme for BPO - with a particular focus on the development of call centres.

The department was expected to spend R2 billion over a period of three years on this scheme - and aimed to make SA the world's third-biggest BPO centre, after India and Philippines, by 2008.

The plans - estimated to cost R2 billion over three years - aimed to involve the private sector in the marketing and easy entry into SA for the expansion of existing BPO operations, skills development, simplifying administrative procedures and other investment incentives.

The DTI also announced it would work with Telkom to lower the cost of telecommunications in SA and promote the sector, with the hope of creating up to 100 000 jobs over the next five years. But, while Telkom has offered the industry reduced rates, they have not been implemented until the industry brings a case before the Competition Commission to prove the incentive would not be anti-competitive.