City positions itself as leading call centre hub

THE City of Johannesburg has embarked on a sustained drive to position itself as a call centre hub, with call centres for the lucrative international market which are capable of providing better service levels cheaper than its competitors.
“We want to become world leaders in the call-centre market,” says David van Niekerk, programme manager of sector support in the city’s Economic Development Unit (EDU).
Joburg has already established itself as a destination of choice for call centre operators in South Africa. A report compiled by Trade and Investment South Africa in 2002 put the number of call centres in South Africa at 410 238, of which 60 percent were located in Johannesburg.
Van Niekerk says the City is assisting Johannesburg-based companies in getting call centre businesses and meets with call centre stakeholders to discuss issues of mutual interest. Johannesburg has also contributed towards the annual Call Centre Networking Group (CCNG) Awards, which sponsors the Innovation Award.
The City has now commissioned an international demand-side survey “to create a value proposition for Johannesburg and for South Africa, which will include a cost analysis of conducting business here”, says Van Niekerk.
The study will gather information on competitiveness factors, such as labour costs across different bands of business process outsourcing and call centre operations. “We will also look at our telecommunication rates, property rates and explore the possibility of giving incentives for firms to be more competitive,” says Van Niekerk.
Van Niekerk says it is projected that the financial services sector alone will be outsourcing $356-billion annually by 2007. “If Johannesburg gets only five percent of the pie, this will amount to some R142-billion.” To put that figure in context, adds Van Niekerk, “the Gross Geographic Product of Joburg is R160-billion”.
But South Africa will face stiff competition from countries such as India and the Philippines which offer cheaper labour costs. What gives South Africa a competitive edge, says Van Niekerk, is that it offers value in certain niche markets, with new technology and a relatively skilled and amiable workforce with a good command of English. “We also have a time zone which is compatible with that of Europe. This factor could make South Africa a preferred Call Centre Outsource Location for the European Time-zone, and especially to the UK market due to the English language compatibility,” says Van Niekerk.
While call centres are one of the fastest growing industries in the city, their growth is hampered by the shortage of skills in the sector, admits Van Niekerk. To combat this, the City has unveiled plans to set up a call centre academy in a joint venture with CIDA campus.
The City will provide seed funding for the project and help set it up. “Once the academy is up and running,” says Van Niekerk, “CIDA will run with it.” Van Niekerk says entry-level learners will get two months training in a simulated call centre environment. This project forms part of a bigger project that deals with creating a lucrative “Business Communication Zone” in the inner city of Joburg.
The City has also commissioned a survey which will target international investors already conducting business in South Africa and those who chose not to conduct business here, says Van Niekerk. “We will ask them to give reasons why they didn’t invest here. That will help us to identify and tackle our shortcomings.”
The study will look at the costs of doing business in South Africa in comparison to international norms. “We will look at property costs, technological costs, and the costs of labour,” says Van Niekerk. The study is expected to be completed by the end of October.
Van Niekerk anticipates that information from the survey will help populate an industry-related web-based database which is to be launched in October. This portal will also be used to as a single point of reference for prospective international investors and outsourcers.
According to Van Niekerk, the city will soon be working on a project to make telecommunications in the city cheaper in order to attract investment and to promote trade. “We will be liasing with the Independent Communications Authority of South Africa (Icasa), the National Department of Communication, Telkom and the second network operator to explore ways of reducing costs.”