SA has to be careful about what call centre outsourcing model it intends to select, because it cannot compete on a high-volume/low-cost basis, says Fusion Outsourcing executive director Johan Kuntz.
Fusion Outsourcing is part of international insurance group BGL, better known in the local market as Budget Insurance, and has operations in the UK that include four contact centres.
The Cape Town outsourcing centre operates in support of the UK business and has 450 staff, after having started three years ago. South African businessman Douw Steyn, who launched Fusion Outsourcing with an initial investment of R100 million three years ago, is BGL's majority shareholder.
Shrinking pool
Kuntz says the local outsourcing industry is growing rapidly and his company's experience shows South African staff are of high quality and see the industry as a career. However, the pool of suitable candidates is shrinking, especially for the higher end of the market, he notes.
"We are still getting more than 200 applications for every job we advertise; however, this is less than half of what we received when the operation started."
Kuntz says human resource development and labour costs are the most expensive, while telecommunications costs, which have been hammered by government and industry observers, feature as number six on the company's cost lines.
Fusion Outsourcing is known as a captive operation, because it only services its owner. However, Kuntz says Fusion's success means it is mulling the possibility of doing work for other companies. A decision by the board is expected in March.
Kuntz says Fusion Outsourcing has benefited greatly from Department of Trade and Industry (DTI) incentives, which have helped develop the operation. He notes that government-sponsored industry organisations, such as the SA Call Centre Community and Calling the Cape, have not displayed "the professionalism they should have".
"We are approached every now and then to host foreign delegations, or suddenly asked to attend an overseas trip at very short notice and this does not really work, or seems poorly planned," he says.
Driving growth
Calling the Cape CEO Sipho Zungu says his organisation is canvassing call centre operators about the support they need and their requirements to grow their organisations.
"I am meeting with all the major operators, such as TeleTech, Sanlam, Old Mutual, and others to determine their requirements," he says.
Zungu agrees that SA should not compete on the high-volume/low-cost model, but adds that local call centre operators have one unique advantage in that they are used to dealing with many accents and linguistic variations.
"The diversity in this country means that South Africans are good listeners and this is a big advantage in the call centre industry worldwide," he says.
Zungu also says government incentives, particularly those from the DTI, are serving the industry well. He quotes some statistics recently received from the department that state applications for incentives are usually turned around in 20 working days.
Indian visits
Kuntz says outsourcing companies from India are visiting frequently, as they seem to be particularly interested in what is happening in SA and how this local industry is developing.
"They know that, while they have done extremely well out of the call centre industry, the model is evolving and they are seeing what they have to do next," he says.
The call centre outsourcing industry has become extremely important to the Western Cape and, according to Calling the Cape, 25 000 people have found direct employment in the industry.
Kuntz says 78% of his employees are from the coloured population, about 10% are black and Indian, and the remainder white. He also estimates that the ratio of earner to dependents averages at about one staff member supporting 3.5 other people.
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