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Master plan to drive continued investment in SA’s global business services sector

Photo: File

Photo: File

Published Jan 18, 2022

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By Andy Searle

AS WE enter the new year with renewed optimism, here is a reminder that at the end of last year, BPeSA signed a comprehensive framework for a global business services (GBS) sector masterplan designed to increase the exceptional growth and success the sector has achieved over the past four years.

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Our masterplan framework, developed and agreed with the Department of Trade, Industry and Competition (dtic) and other strategic public, private and social partners sets a target of creating between 250 000 and 500 000 cumulative new jobs in the sector by 2030.

Our two-fold strategy to achieve this target requires scaling up the services we already provide to our existing global customers by securing additional work from them, and attracting new customers who would invest in South Africa by expanding here or shifting existing business from other locations.

Confidence in our ability to achieve this ambitious target is led by the South African government which had already identified GBS as a priority sector.

Prior to the country being first locked down, the GBS export market had seen a 24 percent increase in compound annual growth rate (CAGR) between 2014 and 2018, and then jump to 34 percent in 2019, tapering to 15 percent CAGR in 2020 with the Covid driven lockdowns.

To be clear, that’s twice the global growth rate of the sector and three times faster than key competitors, clear evidence of the priority status of the sector and confidence from the investment community.

Holding the status of a priority sector and essential service during lockdown, enabled us to continue working when many other countries were unable to do so.

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This supported global clients relocating their business to South Africa, resulting in thousands of new jobs.

Since January 2018 and up to the second quarter of 2021, the GBS sector created more than 50 000 cumulative new jobs, the majority of them for young people, which contributes to addressing South Africa’s high youth unemployment rate of 66.5 percent for those between the ages of 15 to 24 and 43.8 percent for those between 24 and 34-years old (Statistics South Africa).

In addition to the economic growth of the sector, in April 2021 South Africa won the Most Favoured Offshore CX (customer experience) Delivery Location recognition in the Ryan Strategic Advisory Annual Front Office BPO Omnibus Survey, and in October was recognised as the GBS World Top Africa Performer Award.

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None of our successes happened by accident. It has been a collective culmination of focus and collaborative partnership with the dtic to promote the country’s quality offering to our global target markets, and we were determined that Covid would not undo all that work.

We reacted to the lockdown very quickly with two goals in mind: first, the safety of our people; and second, business continuity and all that implies.

Every delivery centre had to ensure the safety of every member of staff and while spatial planning, hygiene, working conditions, and transport are all second nature now, health and safety planning at this level was new back then.

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And while it was relatively easy to come up with new technical solutions, including work-from-home, given South Africa’s excellence in IT, we had to ensure that we were functioning within a global regulatory and compliance framework.

Crucially, we weren’t acting alone. Major sector shifts, such as the one we’ve experienced, generally occur only when many organisations work together and that’s exactly what we experienced. In addition to the dtic’s support we also had industry-wide support – and not just suppliers but clients and customers too.

We had strong and established strategic public-private partnership ties with regional governments and organisations like the Harambee Youth Employment Accelerator and the Public Private Growth Initiative.

We will continue demonstrating reliability and agility to our offshore global clients, but we have no intention of resting on our laurels and hoping for the best.

Despite our achievements, our ability to sustain and grow our sector depends on many factors.

Some are within our control such as our international marketing efforts, the government’s continued support for job-creation incentives, and the ongoing development of talented youth to staff our operations and delivery centres.

The latter is no small feat and requires a broad range of knowledge and devotion, given that GBS includes traditional business-process outsourcing, customer experience, contact centre services, shared services across the finance and accounting, legal, IT, education, HR and knowledge sectors, and increasingly a growing digital and ITO service and solutions offering.

That requires a lot of learning and skill and we are grateful for the enthusiastic young workforce who embrace these opportunities with exuberance and commitment.

Other factors impacting the sector’s growth are outside our control. These include fluctuations in the exchange rate which affect cost competitiveness, and borders that open and close to South Africa on an almost whimsical basis.

But as far as we are able, we’re not leaving anything to chance.

Our GBS masterplan framework is a collaborative clarification of the support that is required to realise the opportunity facing us, as more and more global organisations outsource GBS services to locations like South Africa.

It caters not just for the demand and supply sides of GBS, but also the components that are essential to the success of any sector in South Africa today: sustainability and transformation.

Without them, no amount of international investment coming into South Africa will have meaning, and that must remain our driving force.

Andy Searle is chief executive of BPeSA.

*The views expressed here are not necessarily those of IOL or of title sites.

BUSINESS REPORT ONLINE

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