South Africa Business Process Outsourcing Market Size, Share, and Trends Analysis Report For the Service (Customer Services, Finance & Accounting) Along with By End-use (BFSI, IT & Telecommunications), And Segment Forecastsfor 2020 – 2027

by sachinlathiya

It is estimated that the South Africa business process outsourcing market size was USD 1.4 billion during the year 2019 and is projected to grow at a compound annual speed (CAGR) that is 13.2 percent from 2020 until 2027. The market’s expansion is driven by advancements in technology continued innovation, and intensifying competition, a trend that is expected to continue through the forecast time. The need to manage operating costs, integrate processes, focus on core competencies and attract skilled talent is anticipated to fuel growth in the coming years. South Africa has been home to many call center operations over the last few years which has led to its global acknowledgement as a sought-after and trustworthy offshore outsourcing destination.

It also ranks as one of the top locations in the world for Global Business Services – or offshoring business processes. A high level of expertise, a huge population of skilled workers, lower costs, and easy-to-understand neutral English accents are some of the main reasons encouraging companies to consider South Africa among their preferred outsourcing destinations. With a particular focus on Analytics and Artificial Intelligence (AI)-driven solutions, South Africa has a larger amount of actuarial resources compare to India and provides support in several languages, including French as well as Spanish. The use for AI and robotics as a complement to a strategy to manage human resources aid the companies in South Africa BPO industry. South Africa BPO industry in competing with their competitors in Europe and the Middle East & Africa.

This, in turn, is expected to propel market’s growth rate in the near future. In addition, Business Process Enabling South Africa (BPESA), the Best African BPO company industry body is playing a key role in abetting the industry growth by supporting skill development as well as sharing best practices and providing its members with the ability to connect with other businesses and associations that support and help the sector’s transition into an economy that is digital. In addition to that, the South African government has introduced several taxation incentives and schemes for the establishment of infrastructure as well as support for skilled workers. One of the most well-known initiatives can be described as known as the Monyetla Work Readiness Program.

The main goal of this program is the expansion of the amount of work-ready entry-level employees. Through programs like the Monyetla Work Readiness Programme, BPO employers lead a consortium approach to recruit and train entry-level workers. The initiatives have created youth employment opportunities , which in turn contribute to the region’s export revenue from offshoring. It is evident that the afribpo business in SA has grown continuously providing new employment opportunities and playing a significant part in the region’s economic development. Outsourcing service providers believe they are in a position where South Africa enjoys better opportunities when compared to other nations in Africa for providing outsource services for business. Cape Town has particularly emerged as a BPO location that is a preferred destination.

Services Insights

The service sector for customers dominated the market with a market share over 31% 2019 and will expand further by the fastest rate of growth from 220 until 2027. This is due to the rapid growth of service centers that necessitate technical support both offline and online. Customer service BPOs focus on managing enquiries from customers made through telephones, chat, emails and social media platforms and many other channels. Customer service BPO sector is growing at the moment in Cape Town and has risen considerably over the last few years, and is predicted to see significant growth in the future. Moreover, South Africa holds an advantage when it comes to providing customer support BPO services. Its ability to help businesses lower the overall costs coupled with rapid progress towards remote working due to the Covid-19 virus has given south africa’s centers for customer service an advantage over other hubs.

The finance & accounting segment is projected to grow by a significant rate of 13.6% over the forecast period. The advantages of finance and accounting BPO services for reduced cost for financial tasks is also driving their acceptance over a wide range of financial institutions in the country. South Africa is steadily advancing in international service delivery to the industry of financial services. Several financial organizations are also increasingly settling on South Africa for establishing their African back-office shared services hubs as one of their delivery infrastructures worldwide.

End-of-use Insights

The segment for IT and telecommuting took the lead in the regional market, by capturing more than 35% in the year 2019. The sector of telecommunications and information technology is among the top users of BPO services. In the IT sector, South Africa has performed an essential role in the field of the technical helpdesk and service desk due to its exceptional abilities in speaking. Moreover, the country consists with a high percentage of IT graduates with necessary technical knowledge, which can reduce the burden as well as the cost of training for companies. South Africa continues to remain one of the most popular locations for outsourcing IT-related services due to the rapidly growing cluster of companies. These companies provide IT-focused solutions to various industry verticals through website design and development and platforms and application development. The increasing ICT spending in the country for regular maintenance of existing communication and IT systems and replacement of obsolete systems will likely drive market’s growth.

It is expected that the BFSI segment is expected to record the highest CAGR during the forecast time. A readily available skilled workforce, including Chartered Financial Analysts (CFAs), Chartered Accountants (CAs) and actuaries, has been the crucial driver of success for South Africa in this particular field. Furthermore, international banks are selecting South Africa for the delivery of intricate banking, for example, life insurance and fund accounting. The country delivers vast volumes of voice services in the area of insurance such as commission handling, claims processing and policy administration.

Key Companies & Information on Market Share

The marketplace is extremely and competitive. Many major companies are working on increasing their market presence by implementing various business strategies including mergers and acquisitions, partnerships and product development. These strategies aid organizations in expanding their business geographically and enhance their offerings to national and international markets. For example, in August of 2020, WNS (Holdings) Ltd launched EXPIRIUS which is a distinctive user experience (CX) solution that integrates humans-assisted design and AI-driven insights to improve customer experiences. A few of the main companies operating inside South Africa’s South Africa business process outsourcing market are:

  • 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 in the Report

This report estimates revenue growth on a country-wide basis as well as a review of the latest industry trends from 2016 to 2027 across each sub-segment. To make this study, Grand View Research has subdivided the South Africa business process outsourcing market report on the basis of services and their end-uses:

  • Service Outlook (Revenue USD Million between 2016 and 2027)
    • Finance & Accounting
    • Human Resources
    • Knowledge Process Outsourcing (KPO)
    • Supply Chain & Procurement
    • Customer Service
    • Other
  • Final-use Outlook (Revenue, USD Million from 2016 to 2027)
    • Banking, Financial Services, and Insurance (BFSI)
    • Healthcare
    • Manufacturing
    • IT & Telecommunication
    • Retail
    • Others

 

 

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