South Africa Business Process Outsourcing Market

The South Africa business process outsourcing market size was valued at USD 2.16 billion in 2022 and is projected to reach USD 6.49 billion by 2031, expanding at a CAGR of 13% between 2023 and 2031. The growth of the market is attributed to continuous inventions, developments in technology, and rising competition, which is projected to continue throughout the forecast period.

South Africa has been home to many call center operations for the past few years and has earned global recognition as a favorite and trustworthy offshore outsourcing destination. It acts as a destination for global business services - or offshoring business processes. A large talent pool, low costs, sufficient expertise, and easy-to-understand neutral English accents are some of the key factors that are prompting companies to choose South Africa as their preferred outsourcing destinations.

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With the focus on analytics and Artificial Intelligence (AI)-driven solutions, South Africa has a large number of actuarial resources as compared to India and can offer help in numerous languages, such as French and Spanish. The use of artificial intelligence (AI) and robotics as a corresponding strategy for human resources management can also support the officeholders of the South Africa BPO industry in competing with their rivals in Europe and the Middle East & Africa.

This is estimated to increase the market growth in the coming future. Moreover, Business Process Enabling South Africa, a South Africa-based BPO industry body, has performed an important role in assisting the industry growth by supporting skill development, sharing best practices, and offering its members with access to other business networks & associations that propel and influence the industry’s transition into digital economy.

Furthermore, the government of South Africa has launched numerous taxation incentives and schemes for skills-related support. One of the major initiatives is the Monyetla Work Readiness Programme. The major focus of this program is to grow the pool of employable entry-level personnel. Through the Monyetla Work Readiness Programme, BPO employers run a consortia approach to hire and train entry-level staff.

Such initiatives are generating youth service opportunities and thereby contribute to the region’s export profits from offshoring services. The BPO industry in South Africa is expanding constantly, providing new job opportunities and playing a decisive role in the region’s economic development. Outsourcing service providers believe that South Africa has better opportunities as compared to other countries in Africa, to offer business outsourcing services. Cape Town has especially developed as a BPO destination of choice.

Market Trends, Drivers, Restraints, and Opportunities

• The need to control the operating prices, harmonize processes, focus on core abilities, and recruit qualified talent is likely to fuel the market over the coming years.

• Government incentives to the BPO market is helping to encourage a flurry of international investments in the market, which is expected to increase the market revenue.

• Effortless understanding of normal English accents, large expertise group, low prices, and adequate knowledge are some of the key factors driving the South Africa business process outsourcing market.

• Lack of data privacy and integrity may hinder the market growth throughout the forecast period.

• Emerging new technologies and innovations by some players of the market are presenting numerous opportunities for the expansion of the market.

Scope of South Africa Business Process Outsourcing Market Report

The report on the South Africa business process outsourcing market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been involved in this report.

Business Process Outsourcing Market  Market Segment Insights

Based on services, the market is divided into procurement & supply chain, knowledge process outsourcing (KPO), human resources, finance & accounting, and customer services. The customer service segment led the market with a share of over 31% in 2019 and will develop further at a high CAGR from 2021 to 2028. This growth is attributed to the rising establishment of service centers which require online and offline technological support.

Customer service BPOs are devoted to managing customer queries produced through phones, social media platforms, email, chat, and other channels. The customer service BPO sector is booming in Cape Town and has grown considerably during the past few years and is projected to witness significant growth in the coming years. Additionally, South Africa holds a benefit when it comes to customer service BPO services.

The ability to support companies lowers the overall prices combined with a speedy shift towards remote work operations, due to the Covid-19 pandemic. This has earned South Africa’s customer service centers a competitive advantage over rival hubs. The finance & accounting segment is anticipated to expand at a significant CAGR of 13% throughout the forecast period.

Low prices of finance functions in the finance & accounting BPO services is fueling their acceptance across numerous financial institutions in the country. South Africa is steadily developing in the field of international service delivery to the financial services industry. More than a few financial organizations are progressively preferring South Africa for launching their back-office shared services hubs as part of their global delivery networks.

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In terms of end-users, the market is segregated into banking financial services and insurance (BFSI), retail, manufacturing, it & telecommunication, and healthcare. The IT & telecommunication segment led the regional market with a share of more than 35% in 2019. The IT and telecommunication sector is one of the key adopters of BPO services. In the IT space, South Africa has played a vital role in the the service desk and technical helpdesk services, owing to the unique voice skills.

Furthermore, the country consists of a huge number of IT graduates who have the relevant technical skills, which, in result, decreases the responsibility and the price of training on the part of companies. South Africa continues to remain as a top location for outsourcing IT services, due to the rapidly growing group of companies. These companies offer IT-focused solutions to numerous industry verticals in the form of website architecture and advancement, and platform and application development.

Increasing ICT spending in the country for the routine maintenance of the current IT and communication systems and replacement of outdated systems are expected to boost the segment growth. The BFSI segment is likely to register a high CAGR over the forecast period. Easy accessibility of a skilled workforce, such as chartered accountants (CAs), chartered financial analysts (CFAs), and actuaries, has been the key driver of success for the country in this field.

Additionally, global banks are selecting South Africa for the delivery of sophisticated work in banking areas, such as life insurance and fund accounting processes. The country delivers huge volumes of voice processes in the field of insurance, including claims processing, commission handling, and policy administration. 

Segments

The South Africa business process outsourcing market has been segmented based on

Services

• Procurement & Supply Chain
• Knowledge Process Outsourcing (KPO)
• Human Resources
• Finance & Accounting
• Customer Services

End-users

• Banking, Financial Services, and Insurance (BFSI)
• Retail
• Manufacturing
• IT & Telecommunication
• Healthcare

Key Players

• WNS (Holdings) Ltd.
• Wipro Ltd.
• Webhelp
• TTEC Holdings, Inc.
• The IT Guys
• Teleperformance SE
• Talksure Group
• Startek, Sodexo
• SA Commercial
• Rewardsco
• Pra Group, Inc.
• Pioneer Credit
• Paschoalotto Logo
• Outworx Contact Centre
• O’Keeffe & Swartz
• NCR Corp.
• Merchants SA (Pty) Ltd.
• Mango5 BPO
• Infosys Ltd. (Infosys BPM)
• Indox (PTY) Ltd.
• Ignition Group
• iContactbpo
• IBM Corp.
• HCL Technologies Ltd.
• Encore Capital Group
• DSG Group
• Digicall Group
• Credit Corp Group
• Collection House Ltd.
• CCI South Africa
• Capita plc
• Capgemini
• Boomerang Marketing
• Amdocs, Altron
• Accenture Plc
• 121 BPO Services.

Competitive Landscape

Major players competing in the South Africa business process outsourcing market include WNS (Holdings) Ltd., Wipro Ltd., Webhelp, TTEC Holdings, Inc., The IT Guys, Teleperformance SE, Talksure Group, Startek, Sodexo, SA Commercial, Rewardsco, Pra Group, Inc., Pioneer Credit, Paschoalotto Logo, Outworx Contact Centre, O’Keeffe & Swartz, NCR Corp., Merchants SA (Pty) Ltd., Mango5 BPO, Infosys Ltd. (Infosys BPM), Indox (PTY) Ltd., Ignition Group, iContactbpo, IBM Corp., HCL Technologies Ltd., Encore Capital Group, DSG Group, Digicall Group, Credit Corp Group, Collection House Ltd., CCI South Africa, Capita plc, Capgemini, Boomerang Marketing, Amdocs, Altron, Accenture Plc, and 121 BPO Services.

The market is extremely competitive, as major companies are focusing on improving their market existence by implementing numerous business strategies, including partnerships, mergers & acquisitions, and product development. These strategies support organizations to grow their business geographically and increase their offerings across the national and international markets.

Recently, in August 2020, WNS (Holdings) Ltd introduced EXPIRIUS, an exclusive customer experience (CX) solution, which integrates human-assisted designs with AI-driven conversational intuitions to enhance customer experiences.