Industry Commentary

First-Class Facilities an Important Driver for South African BPO

By November 27, 2017January 10th, 2022No Comments

There are many factors that drive outsourcers to choose a particular location for delivery of front-line services.  Obviously, cost levels, volumes of skilled labor, and favorable government policies count for a lot in this regard.  But, so too does the availability of appropriate commercial facilities.  This is an area in which the cities of Johannesburg and Pretoria are showing strength as they seek to attract more investment from international providers.  Going forward, world-class business park developments have the potential to be showcase attributes for these cities, and will play a vital role in their ongoing BPO success.

The recent South African outsourcing immersion for global industry influencers, organized by BPESA and hosted in Gauteng (Johannesburg and Pretoria are two of the five districts in the region), provided insight into several aspects of the jurisdiction’s strength as an international outsourcing destination.  There were several factors that duly impressed the attendees (who arrived from North America, the UK, Australia and South America), including the diversity and scalability of business service skills available, as well as the provincial government’s commitment to making outsourcing an employment driver.  But, it was also called out by several visitors that the quality of the delivery facilities was notably impressive, something that should not be understated as an important differentiator for the region.

Commercial real estate can be a make-or-break element in attracting new BPO investment to a jurisdiction.  An obvious example of how this has worked in favor of a location is Honduras, where the outsourcing sector has flourished in no small part thanks to the Altia Smart City initiative pioneered by Grupo Karims.  For those who attended the recent South African influencer immersion, there are similarly encouraging developments.

In the municipality of Tshwane, which encompasses the city of Pretoria and is roughly twenty minutes north of Johannesburg on the Gautrain, the development of a large-scale business park designed to house multiple BPO deployments (slated for completion in 2018), will ensure diversification for an urban area that has seen large scale investment in tourism, retail and other public works, but not yet in outsourced services. This site is close to human talent pools, retail facilities and hotel accommodations. It will also provide the province with an alternative delivery point for BPO services, crucial in ensuring the province’s long-term outsourcing viability.

Equally, the Riversands Commercial Park in the suburb of Fourways, on the outskirts of northern Johannesburg, offers prospective outsourcing investors an attractive alternative.  This ongoing development is located near several population centers, an essential element for outsourcing labor, and is strategically adjacent to major highway infrastructure improvements, which is crucial for accessibility.  As noted by South African contact center leader Rod Jones, Johannesburg has yet to truly develop a contact center hub, and this initiative has the potential to fill such a void.  Already it is housing incubators for some of the city’s budding entrepreneurs; this cannot be a bad thing in terms of the commercial atmosphere.

The bottom line in this discussion is that a prospective BPO location can have many of the core elements in place, but if the right facilities are not available to house outsourcing deployments the game will be over even before it starts. In the case of Johannesburg and Pretoria, ongoing commercial land development should embolden providers as they consider these cities for investment.