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UK firms look to SA outsourcing

12 March 2009
[ Cape Town | ITWeb, 12 March 2009 ] - Financial and economic stress is forcing UK companies, in particular, to seriously explore SA as a quality outsource destination, says Peter Winslow, CEO of insurance firm BGL Group.

He spoke to ITWeb yesterday, at the launch of the group's subsidiary Fusion Outsourcing's new foray into attracting third-party business.

Winslow says the quality of staff that can be found in SA rates as excellent and this is part of the value-added proposition for UK companies.

"Many UK companies that have outsourcing or contact centre needs, but were worried about quality of staff, are now being seriously forced to consider SA as a destination, as they are forced to find ways to cut costs in order to alleviate their economic stress," he says.

Calling The Cape CEO Sipho Zungu echoed Winslow's words, saying his business process outsourcing marketing organisation had seen a marked increase in foreign enquiries about locating in SA and the Western Cape.

Value proposition

"In the recent past, we could not compete with the really low-cost outsourcing destinations such as India and the Philippines, but now those companies have realised they need more than just low costs, they need value and that is what makes this country more attractive," he says.

The BGL Group is a UK-based insurance group originally founded by South African multi-millionaire Douw Steyn. It has four contact centres in Britain, plus another located in Cape Town.

Five years ago, the BGL Group invested R140 million in the Mother City operation, starting with 200 staff, which has now grown to a headcount of 400. Initially its focus was to service the BGL Group's needs, but it has been slowly taking on other clients and this has become a key business focus.

Changed environment

"Since we started, the South African environment has changed considerably," Winslow says. "Telecommunications costs have fallen by about 40% and now only make up 8% of our cost basket, down from 18%. Government, especially the Department of Trade and Industry, has changed from a very bureaucratic organisation, with lots of good intention, but no money, to a professional service that has the clout to get things done," he says.

Last year, Fusion Outsourcing received a grant of R28 million from the Department of Trade and Industry in order to help develop infrastructure and train staff.

Johann Kunz, Fusion Outsourcing Services MD, says his operation has formed alliances with contact centre consultancy Full Circle and hardware supplier Spescom.

He says revenue for the operation has now reached �34 million (about R390 million) in the five years of its existence.

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