Why Australia must look west for offshoring solutions

As part of my role here at Sigma Connected, I am fortunate that I get to travel to our various businesses across the globe, catching up with not only our amazing colleagues, but also new and existing clients.

Just a matter of weeks ago, I got to spend some valuable time in Australia with Sigma colleagues. As always, it was a hugely productive visit, but whilst I was with our Brisbane-based team and visiting our clients in Melbourne and Sydney, an eye-catching report was released by research company G:enesis.

The detailed document, supported by a handful South Africa’s inward-investment firms, was titled “South Africa Value Proposition 2022/23”. Essentially, it focuses on job creation plans, driving long-term investment, and something which South Africa and indeed Sigma Connected has become renowned for, providing offshoring contact centre services.

The timing of the report was significant for me as I spent much of my time huddled with existing and prospective clients in Australia where top of the discussion list was offshoring, and particularly the comparisons between South Africa and the often go-to Australian option, the Philippines. With the UK and the USA extensively using South Africa as an offshore location, it surprises me that only around 6% of Australian businesses do the same.

They were intriguing conversations and I was able to probe more about why the Philippines, and not South Africa, is generally the favoured offshoring location for Australian businesses. In a nutshell, through speaking to our prospective clients, I found that preference is there due to cost and comfort around the similar time zone.

The people I met were interested to hear that when established with the right governance and management structures in place, operations are manned properly, backed by a proven 24/7 approach which gets over the time zone worries, then there are huge advantages to be gained by seriously looking towards South Africa.

What is interesting is that the South African report factually highlights that the value of customer service in South Africa is judged to be 18% better than the Philippines. It might be a small cost-benefit by offshoring to Philippines, coming in at 16% cheaper, but when you add in all the other values you get from South Africa, including a complex voice solution, then South Africa is a good proposition offering better experience and improved retention rates.

Within the report they also compared significant cost performance against nine different countries which included South Africa, India, Philippines, Poland, Egypt, Honduras, Jamacia, Kenya and Malaysia.

Here are just some areas where South Africa came out on top:

  • It offers lower costs of up to 65% when compared to source markets
  • It also offers 18% better customer experience with greater customer lifetime value
  • Data shows a 5% better customer retention each year compared to other offshoring locations
  • There are attractive cost incentives which brings South Africa in line with the Philippines, Jamaica and India
  • South Africa sees 25% to 30% lower operating costs when benchmarked with other competitor locations
  • South Africa is among the top five for highest positive emotional intelligence out of 122 countries
  • South Africa ranks top for English proficiency over Philippines, India, Malaysia, Poland and Honduras
  • South Africa is a globally recognised contact centre hub, providing inbound and outbound sales, customer service and after care, and;
  • It boasts a scalable pool of talent to select from – giving the ability to scale up at short notice

This short list describes many of the benefits perfectly, and it could go on.

Of course, I have seen how huge the benefits are in South Africa from an offshoring perspective, and perhaps you would expect me to champion its cause due to our track record.

I am certainly not saying that the Philippines doesn’t have its place – it does – but ultimately its about weighing all the factors that a location can deliver, not just price.

It’s really important to say that I realise there is never a one-size-fits-all solution for any business looking to offshore specific elements of its operations. It can depend on the products and services you are offering but I truly believe that South Africa is best in class in so many ways. The recent report only underlines what a first-class option it can be.

About the author

Ben Jones is Sigma Connected’s Group Chief Commercial Officer.

For further information you can contact Ben through email. Readers can also connect with Ben on LinkedIn.


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