/ 18 November 2003

Rainbow nation discovers its pot of gold

Mano Hughes does not fit the stereotype of a call centre worker. She is highly educated, has considerable commercial experience and lives in Bryanston, one of the affluent suburbs of Johannesburg.

The 43-year-old wife of an IT network engineer has been hired by an outsourcing company to push computer sales to the British market.

She works for an arm of Dimension Data which has itself been asked by a technology firm to contact — on its behalf — British managers with serious budgets and decision-making power.

The telesales staff need to be high-powered. Hughes is that, confident as she converses with companies from Manchester to Maidenhead from her South African base.

These potential buyers are apparently unfazed that she is calling from the southern hemisphere. ”They are surprised sometimes. But I’m happy to tell them I’m in Johannesburg. It’s a talking point. They want to know what the weather is like and things like that.”

Hughes describes herself as a ”self-employed sales and marketing consultant” who has been brought in on a short-term contract by DD.

She likes the flexibility of the work and says that despite her husband’s good job she needs extra cash if only to pay for her child’s private education.

Hughes is a niche worker, not representative necessarily of call centre workers in South Africa or elsewhere. But DD is not the classic call centre operation — at least, not yet. It is predominantly an IT networks provider that is dipping its toes in outsourcing work to see whether this is an area it should take more seriously.

Useful alternative

The concept of outsourcing is relatively new to the self-styled rainbow nation but everyone from the government downwards has realised there is a huge opportunity to create jobs in a country which, 10 years after apartheid was removed in its first truly democratic elections, is still facing massive unemployment.

Present at Britain’s Call Centre Expo exhibition in Birmingham six weeks ago for the first time was a big contingent of the up-and-coming players from South Africa. They believe they can offer a useful alternative to more traditional outsourcing bases such as India.

They claim they are not trying to undercut the more established markets — indeed, the strong rand makes South Africa more expensive than India — but they do think they can persuade British firms not to ”put all their eggs in one basket”.

Why southern Africa? The real trigger for this growing sector was the arrival in February of a fibre optic cable, SAT3, connecting South Africa with Europe via both east and west coast routes.

”This has opened up South Africa as a competitor to India,” argues Jason Drew, British-born chairman of outsourcing specialist the Dialogue Group, which has operations in Cape Town, London and Seattle.

He is convinced that there is a huge industry to be built from outsourcing in a country where unemployment is put at 35% officially but most believe the figure is much higher.

More companies outsourced to South Africa in August than during the whole of 2002, Drew says, with top names such as Barclays and Virgin leading the way.

Dialogue has been helping British American Tobacco to run competitions and pharmaceuticals group Pfizer to sell into chemist shops, as well as providing after-hours customer contact services for Admiral Insurance.

The Cape Town arm of the business employs 450 people in its calls centres and has 300 ”seats” in place. This will rise to 650 seats by February next year with a target of 1 800 for the end of 2005.

Peaceful transition

The South African industry as a whole could be using 100 000 seats within four to five years, Drew says, but most will probably deal with more routine matters. Employees are likely to be considerably less well qualified than high-flyers such as Hughes, with Dialogue paying its staff an average of R57 000 (£5 000) a year.

Drew is establishing a training school for the industry capable of looking after 150 people a month. It will be based in Cape Town but there are hopes of establishing others in Durban and Johannesburg.

Government incentives, a mere one-hour time difference with Britain and a feelgood factor associated with the peaceful transition from apartheid to a self-styled rainbow nation are all helping to sell South Africa.

There are the similarities with the UK — in banking and legal systems along with the language. There may be a dozen local languages in South Africa but almost everyone speaks English.

Despite Hughes’s insistence, does someone expecting to speak to a Scot or a Geordie not get thrown by a South African accent?

Drew insists not. He argues that most Britons find it hard to differentiate between an Australian and a South African accent, and ”accent modification” can be part of the training.

”The South African voice can be a differentiator and is more favoured than an Indian accent. But ultimately clients are more interested in efficiency and service delivery than anything else.”

He also believes outsourcing and call centres can have a significant impact on the economy and the social system. ”We hope to take people from disadvantaged backgrounds. All they lack is education and opportunity,” argues Drew who was managing director of Zebank before it merged with Egg, the British-based online bank.

While many in the UK might see call centre work as basic and uninspiring, Mr Drew believes it offers opportunities in developing nations.

”It can be seen as quite a prestigious job because it involves working with international companies and is a fast-growing sector with chances for employees to move up from basic employee to team leader and then call centre manager.”

There can be experience in IT, sales and management, all of which would look good on a curriculum vitae, according to Drew.

Dialogue believes the industry can be developed proactively with what it calls ”intelligent resourcing”, as Drew explains: ”Until now outsourcing has been driven largely by the company wishing to outsource, with the service provider playing a reactive role. But what if you turn this approach on its head, where the provider takes the initiative and develops applications for the company? Not just for functions already carried out by the company but by suggesting new and far more effective alternatives and even additional services which the provider is better placed to develop, supply and manage?”

Helping hand

So Dialogue is offering healthcare companies it has been dealing with the chance to offload pharmaceutical sales and other functions. Instead of bringing in temporary staff when an area sales representative goes off sick or on maternity leave, Dialogue offers to take over the patch and service the company’s clients by telephone from Cape Town.

It is also marketing this concept to the publishing industry, telling media companies it could help with operations such as newspaper sales and renewals.

Back at Dimension Data’s purpose-built campus — complete with 12ft steel perimeter fences and guard posts — Jason Krause, general manager of customer information services, is unimpressed by what he sees as low quality and low value outsourcing work. But he is still keen to pursue more upmarket opportunities such as those being worked on by Hughes.

He admits that some American clients had reservations about giving work to Johannesburg, bearing in mind its reputation for being a violent city.

There have also been practical issues including how night workers can return to townships such as Soweto when it is hard to find transport there after dusk.

But site visits by potential customers and other measures have helped to iron out the problems, according to Krause, who plans to increase the number of seats at his centre from 450 to 800 next month.

There is no shortage of British, American and other companies prepared to send some of their functions overseas. Krause explains: ”Whether it’s financial services, airlines or IT, they are all hurting at present. Every company looking to improve its margins and find cost advantages is looking at outsourcing.” – Guardian Unlimited Â