ITD: Observations from Cape Town

IT Decisions spent the past few days visiting Cape Town in South Africa as a guest of BPeSA, the trade association focused on developing their hi-tech service sector.

What did we see of the IT and BPO sector over there? Well, it was clear from the start that South Africa faces some well-known challenges;

• HIV/AIDS remains a major challenge, with 17.8% of the population infected.
• Unemployment at 23.3% means that job creation is possibly the most important task faced by the government.
• Corruption remains seemingly endemic, with endless media stories of politicians getting caught with their hand in the till.

Nobody shied away from the issues, but despite these structural challenges, the situation for businesses wanting to work with South Africa is increasingly positive and the market is quite different to Brazil, leading to the potential for collaboration and partnerships as proposed at the South-South Innovation summit in October 2010.

• South Africa has a business-friendly government that will bend over backwards to support investors and entrepreneurs – if you are investing and creating jobs then they will roll out the red carpet to help your business.
• A new incentive program has just been launched, promising hard cash assistance for any investor creating more than 50 jobs – and company legislation has been adopted and tweaked from the UK, so it’s an easy place to do business.
• South Africa has an abundance of English-speaking skilled people with a strong cultural connection to the people of the UK, Australia, and New Zealand. It’s not just that they can use English, they speak the same language.
• As mentioned earlier in IT Decisions, South Africa has just been invited to join the big boys club – the BRICs – because with over a quarter of all African economic activity taking place in one country, they offer an incredible springboard into the continent.

South Africa is very focused on developing their hi-tech service sector. They used to be known for call centers, and that still applies, but now the call centers are offering social network support too – they are not standing still. The industry differs from Brazil because there is less focus on the creation of IT products, just on the use of IT to serve customers.

The trade association has thrown most of their weight behind marketing to the UK and western Europe, for instance Amazon recently moved all their UK and Germany customer support down to South Africa. But there is clearly the possibility to serve US customers, and this could be where Brazilian firms seeking greater numbers of English speaking resources could step in to create partnerships south of the equator.

Amazon said that they don’t ask their team in South Africa to follow a script, or focus on performance indicators, or worry about service levels… they just tell the team to make sure the customer is happy and their problem is resolved the first time they call the company. A refreshing change from the usual process-driven customer service centers IT Decisions has witnessed across Asia – and very much in line with how Brazilians differ from Indians in this business.

At first sight, South Africa appears to have a long list of quite major challenges. Once you visit and start to witness what major international companies are achieving there, the opportunities for working with this country become clear.

They are still largely focused on selling the region as a place where service companies can serve western Europe. But there is too much talent there to remain focused on the UK alone; Brazilian companies need to wake up to the fact that just across the Atlantic is a great location where they can partner with an abundance of talent. Talent that will help them increase their own business success.

Photo by Matthew Wright licensed under Creative Commons