It is estimated that the South Africa business process outsourcing market size was estimated at USD 1.4 billion during 2019 and is projected to increase at a compound annual rate (CAGR) that is 13.2 percent from 2020 until 2027. The growth in the market is driven by advancements in technology, ongoing innovation, and increasing market competition. This trend is expected to continue over the period of forecast. Controlling operating costs, integrate processes, concentrate on core competencies and attract skilled talent will drive the market over the coming years. South Africa has been home to numerous call center operations over the last few years which has led to its global recognition as a favorite and reliable offshore outsourcing destination.
It is also ranked as one of the leading places to go when it comes to Global Business Services – or offshoring business processes. Adequate expertise, a large pool of talent, less expensive as well as easy-to understand neutral English accents are just a few of the most important factors encouraging companies to consider South Africa among their preferred outsourcing destinations. With the emphasis on Analytics and Artificial Intelligence (AI)-driven solutions, South Africa has a larger number of actuarial resources as compare to India and provides support in multiple languages, such as French in addition to Spanish. The application of artificial intelligence and robotics as a method of complementing to manage human resources can aid incumbents of this South Africa BPO industry in competing with their competitors in Europe and the Middle East & Africa.
This, in turn, is likely to boost industry’s growth in the near future. In addition, Business Process Enabling South Africa, which is the African Business Process Outsourcing industry body, has played a significant role in abetting the industry expansion through assisting with skill development as well as sharing best practices and offering its members accessibility to various business network and associations that are driving and influencing the sector’s transition into technology-driven economies. Additionally, there is a need for the South African government has introduced numerous tax-related incentives and plans for the development of infrastructure and support for the development of skills. One of the most notable initiatives includes monyetla, which is the Monyetla Work Readiness Program.
The focus of this program is to broaden the pool of employable entry-level employees. As part of it’s Monyetla Work Readiness Programme, BPO employers lead a team approach to recruit, and train entry-level staff. These initiatives have helped create young employment opportunities and contribute to the region’s export earnings by offshoring services. A afribpo business in SA has been growing continuously creating new job opportunities, subsequently playing a decisive contribution to the region’s growth. Outsourcing service providers think they are in a position where South Africa enjoys better opportunities in comparison to other countries in Africa to deliver the business services that outsourcing companies require. Cape Town has particularly emerged as a BPO destination preferred by BPO providers.
Service Insights
Customer service was the most dominant segment in the market with a market share over 31% the year 2019 and is expected to grow at the highest CAGR of 220 to 2027. This growth is attributed to the growing establishment of service centers that necessitate technical support both offline and online. Customer service BPOs specialize in handling enquiries from customers made through chat, email, phones and social media platforms and many other channels. Customers can contact them via chat, email, social media platforms and other channels. BPO industry is flourishing in Cape Town and has risen significantly in the past few years. The industry is expected to experience significant growth over the future. Furthermore, South Africa holds an advantage in Customer Service BPO services. The capability to help companies lower their costs with rapid progress towards remote working due to the Covid-19 outbreak has made the customer services centers of South Africa an advantage over other hubs.
The accounting and finance sector will grow by a significant rate of 13.6 percent over the forecast period. The benefit of finance & accounting BPO services for lower cost of financial tasks has also prompted their use across numerous financial institutions throughout the country. South Africa is steadily advancing in the field of international service delivery to the financial services industry. A variety of financial companies are gradually preferring South Africa for establishing their African back-office shared service hubs to be part of their global delivery networks.
End-of-use Information
The segment IT and Telecommunication has dominated the market in the region, with a share of greater than 35% as of the year. The IT and telecoms sector is among the largest users of BPO services. In the IT area, South Africa has performed an essential function in the field of the technical helpdesk and service desk because of its outstanding abilities in speaking. Moreover, the country consists of a substantial number of IT graduates with necessary technical knowledge, which means that it reduces the responsibility as well as the cost of training on the part of businesses. South Africa continues to remain one of the leading locations for outsourcing IT services owing to the fast-growing cluster of companies. These firms provide IT-focused solutions for various verticals of industry through website architecture and development, and development of applications and platforms. The rising ICT spending across the country for regular maintenance of communications and IT systems in place as well as the replacement of outdated systems are expected to fuel the segment growth.
The BFSI segment is anticipated to register the maximum CAGR during the forecast time. The availability of a skilled workforcethat includes Chartered Financial Analysts (CFAs), Chartered Accountants (CAs) as well as actuaries has been the key driver behind success for South Africa in this particular field. Global banks are turning to South Africa for the delivery of complex work in banking areas, including life finance and insurance processes. The country provides huge volumes of voice-based processes in the insurance industry and banking, including commission handling claims processing, and policy administration.
Key Companies and market share insights
The marketplace is extremely competitive because many of the big companies are focusing on improving their market presence through various strategies for business including partnerships, mergers and acquisitions, and product development. These strategies aid organizations in expanding their business geographically and enhance their offerings across market, both in the national and international. For instance, in August 2020 WNS (Holdings) Ltd announced EXPIRIUS the first-ever customers’ experience (CX) solution that integrates humans-assisted design and AI-driven insights to improve the customer experience. A few of the main players in the South Africa business process outsourcing market include:
Accenture Plc
Amdocs
Capgemini
HCL Technologies Ltd.
IBM Corp.
Infosys Ltd. (Infosys BPM)
NCR Corp.
Sodexo
TTEC Holdings, Inc.
Wipro Ltd.
Mango5 BPO
Indox (PTY) Ltd.
Outworx Contact Centre
SA Commercial
Talksure Group
Boomerang Marketing
iContactbpo
121 BPO Services
Altron
The IT Guys
Merchants SA (Pty) Ltd.
CCI South Africa
Capita plc
Digicall Group
DSG Group
Startek
WNS (Holdings) Ltd.
Webhelp
O’Keeffe & Swartz
Ignition Group
Rewardsco
Teleperformance SE
Encore Capital Group
Pra Group, Inc.
Paschoalotto Logo
Pioneer Credit
Credit Corp Group
Collection House Ltd.
Segments Covered by the Report
This report estimates revenue growth across the nation and provides an analysis on new trends in the business from 2016 to 2027 in the various sub-segments. For this research, Grand View Research has segmented into sub-segments the South Africa business process outsourcing market report based on service and end-use
Service Outlook (Revenue, USD Million 2016, 2016 – 2027)
Finance & Accounting
Human Resources
Knowledge Process Outsourcing (KPO)
Procurement & Supply Chain
Customer Services
Others
The end-user Outlook (Revenue USD Million 2016, 2016 – 2027)
Banking, Financial Services, and Insurance (BFSI)
Healthcare
Manufacturing
IT & Telecommunication
Retail
Other
