Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa

 
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as
  a BPO Delivery Location
                      2015
            Compiled by Nelson Hall
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location

Table of Contents
Introduction                                                                                                 2
A. Objectives and Scope                                                                                      2
B. Methodology                                                                                               2
C. Structure of the Report                                                                                   2

Executive Summary                                                                                            3
A. Evaluate as “Onshore-Equivalent” for Contact Center Services                                              4
B. Evaluate for Revenue-Generating Capability in Support of Online Businesses                                6
C. Evaluate as GDN Center within Financial Industry-Specific & for Africa-to-Africa Back-Office Services     6

International Contact Center Services                                                                       8
A. Business Challenges Faced & Drivers for Offshoring to South Africa                                       8
B. Sectors Served and Services Delivered from South Africa                                                  9
C. Benefits Achieved from South African Service Delivery                                                   13
D. Contact Center Services Delivery Cost Structure                                                         13

Financial Industry-Specific Services                                                                       14
A. Business Challenges Faced & Drivers for Offshoring to South Africa                                      14

Skills Availability & Government Incentives                                                                16
A. Skills Availability                                                                                     16
B. Government Support & Incentives for BPO                                                                 16

Companies Delivering Services from South Africa                                                            23
Contact Center Services                                                                                    23
A. Aegis                                                                                                   23
B. Amazon                                                                                                  24
C. Barclays Africa Group Limited                                                                           24
D. Capita                                                                                                  25
E. Coracall                                                                                                26
F. Merchants                                                                                               26
G. Mindpearl                                                                                               30
H. OUTsurance                                                                                              30
I. Outworx                                                                                                 31
J. Sanclare                                                                                                32
K. Serco                                                                                                   33
L. Shell                                                                                                   35
M. Teleperformance                                                                                         36
N. WNS                                                                                                     36
O. Webhelp                                                                                                 37
Financial Services Industry-Specific BPO                                                                   38
P. Kleinwort Benson                                                                                        38
Offshoring Support Services                                                                                39
Q. EOH                                                                                                     39
R. KPMG                                                                                                    40

List of Exhibits
Services Delivered from South African Contact Centers by Sector                                             5
Financial Industry-Specific Services Delivered from South African by Sector                                 7
Profile of Organizations Using South African Contact Center Services by Sector                              9
Profile of Sectors Using South African Contact Center Services by Number of Call Center FTEs                9
Services Delivered from South African Contact Centers by Sector                                            12
Financial Industry-Specific Services Delivered from South African by Sector                                14
BPS Incentive Qualification: dti Evaluation Criteria                                                       17
BPS Incentive Bonus Scheme: Non-Complex Jobs                                                               19
BPS Incentive Bonus Scheme: Complex Jobs                                                                   20
B-BBEE Generic Scorecard                                                                                   21
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location

About NelsonHall
NelsonHall provides buy-side and sell-side organizations with deeper research and
analyses in front office, mid-office and back office BPO than any other research
firm in the world. The company’s subscription-based model provides subscribers
with robust market analyses, case studies, vendor assessments, contract analyses,
market reports and access to a content-rich BPO contracts database. The firm
covers a wide range of industries including financial services, government and
utilities sectors, and tracks worldwide and regional BPO activity. NelsonHall’s home
page is: research.nelson-hall.com.

The company tracks business services activity. In particular, NelsonHall focuses on
the following business services and process areas:

•   Front-office customer management services
•   Middle office industry-specific processing services such as network and
    work management
•   Back office support services such as HR services, finance & accounting services,
    and procurement services

NelsonHall provides information to its clients in a variety of forms, including within:

•   NelsonHall’s BPO subscription services, to assist organizations in developing
    sourcing strategies and in supporting individual sourcing projects including
    vendor short-list development
•   Workshops, to assist organizations in identifying the most appropriate areas
    of BPO for their organization
•   Business case development, to assist organizations in deciding whether BPO
    is appropriate for individual processes
•   Custom assessments, to assist buy-side organizations in benchmarking
    individual processes and to assist vendors in successfully taking BPO concepts
    to market.

For more details, contact:

U.S.                                         U.K.                                           France
Riverside Center                             Atrium Court, The Ring                         NelsonHall
275 Grove Street                             Bracknell                                      4 place Louis Armand
Suite 2-400                                  RG12 1BW                                       Tour de l’Horloge
Newton                                       U.K.                                           75012 Paris
MA 02466                                     Phone: +44 (0)1344 393036                      France
Phone: (617) 663 5737                                                                       Phone: +33 1 72 76 26 54

                                                                                                                                           1
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Introduction
A. Objectives and Scope                                           •   Voice and non-voice support for the domestic South
                                                                      African market.
The purpose of this report is to assess the role
of South Africa as a BPO delivery location for                    This report will focus on the first two of these market
international companies.                                          segments and on the opportunity for organizations to support
                                                                  their international operations from South Africa.
The objectives of the report are to identify:
                                                                  By service type the scope of the report is contact center
•   The experience of organizations that use South Africa         services, financial industry-specific services, and back-office
    for international BPO service delivery                        services such as finance & accounting
•   The drivers for use of South Africa for delivery of BPO
    services for both contact center services and for financial
    industry-specific & back-office services                      B. Methodology
•   The profile of companies using South Africa BPO service
    delivery by industry sector                                   The survey is based on interviews with executives from
•   The profile of international service delivery from South      organizations, both end user companies and suppliers that
    Africa by service type                                        are currently using BPO services based in South Africa in
•   The benefits sought from South African service delivery       support of their international operations.
    and the profile of benefits achieved
•   The delivery cost structure associated with South Africa,
    including details of government incentives.                   C. Structure of the Report
South African “BPO” service delivery typically covers             The report is structured into the following chapters:
three areas:                                                      Chapter I: Introduction
                                                                  Chapter II: Executive Summary
•   International contact center services                         Chapter III: International Contact Center Services
•   International non-voice services typically covering           Chapter IV: F inancial Industry-Specific & Back-Office Services
    industry-specific financial services processes and back-      Chapter V: Skills Availability & Government Incentives
    office processes such as finance and accounting               Chapter VI: C ompanies Delivering Services from South Africa.

2
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
Analysis of South Africa as a BPO Delivery Location

Executive Summary
Organizations have in the past often polarized their          •   Secondly, there is an increased focus on
service delivery between use of onshore centers for               using customer service to drive sales and
delivery of high customer experience and complex                  revenue protection through techniques such
processes and low cost offshore centers for simple                as welcome calls, health checks, and proactive
transaction processing and customer service                       customer interventions.
cost deflection.
                                                              This is changing the skills required of agents, with a
However, the world has changed. While organizations           much greater requirement for agents to be able to build
still have a strong need to reduce their customer service     empathy with customers. Accordingly, the increasing
costs, they are typically looking to do this through          requirement from offshore customer service locations
increased use of electronic channels and by improving         is to be able to offer “onshore-equivalent” customer
customer journeys rather than at the expense of the           service or even “onshore-exceeding” customer service
customer experience. Indeed the most common need              at a lower cost of service.
expressed by organizations in the area of customer
service at the present time is the desire to reduce their     In this scenario, South Africa is worthy of consideration
customer service costs while maintaining their customer       for “BPO” delivery whether via a captive or offshoring
experience and levels of customer satisfaction. This          approach, since it offers an alternative to onshore
is typically accompanied by a longer-term vision to           services for delivery of high levels of customer
continue improving their customer experience and              experience and empathy and the ability to handle
customer satisfaction while retaining this lower cost point   relatively complex processes. In particular, organizations
of operation.                                                 seeking new BPO delivery centers whether for captives
                                                              or outsourced service delivery should evaluate
At the same time, the balance in customer service is          South Africa as:
shifting. This is the result of two factors:
                                                              •   An “onshore-equivalent” for contact center services
•   Firstly, the move to electronic self-service for simple   •   A location with strong revenue-generating capability
    queries is in itself shifting the focus of customer           in support of online businesses
    service delivered by agents to the more complex end       •   A GDN Center for financial industry-specific services
    of the customer service spectrum                              and for delivery of “Africa-to-Africa” shared services.

                                                                                                                                   3
Analysis of South Africa as a BPO Delivery Location 2015 - Compiled by Nelson Hall - bpesa
A. Evaluate as “Onshore-Equivalent” for Contact
   Center Services
The profile of customer service delivered from South Africa does not lend
itself to lowest-cost offshoring where low-cost scripted call-handling rather
than the quality of the customer experience is the main consideration for the
client organization.

The type of international customer service being delivered from South Africa
is best suited to organizations seeking onshore-equivalent levels of customer
experience based on metrics such as net promoter scores and high first contact
resolution rates at a lower price point than onshore service delivery.

Amazon for example is ramping up its customer service from South Africa
and is recruiting “free-thinking” agents with the remit to focus on solving
the customer’s problem. The agents are not scripted, which is typical of
South African contact center services, and are authorized to take whatever
action they feel is appropriate to achieve resolution and a high level of
customer experience.

Accordingly, it is most appropriate for organizations to establish customer
service delivery from South Africa where they are seeking an onshore level of
customer experience either at a significantly lower cost point than is available
onshore or to complement existing onshore capability where recruitment
onshore is proving challenging.

The benefits currently achieved by organizations using contact center services
for International customer service, typically to the U.K. and Australia, are, again
in order of number of mentions:

•   Equal or better customer experience (CSAT or NPS) relative to onshore
    delivery. The majority of organizations are matching onshore delivered
    customer experience at a lower price point, though approximately a third of
    organizations reported that their South African delivery was outperforming
    their onshore delivery
•   Cost savings (averaging 40% and typically in the range 30% to 50%)
    compared to onshore service delivery from the U.K. and Australia
•   High first call resolution rates
•   Ability to deliver more complex end-to-end processes than from other
    offshore delivery locations
•   Matching and frequently outperforming onshore delivery in sales and
    debt collection
•   Ease of management due to time zone compatibility.

4
Analysis of South Africa as a BPO Delivery Location

In terms of type of service delivered, the emphasis is typically on end-to-end
customer service across a range of customer query types. The profile of services
delivered from South Africa in support of international customer service is shown
in Exhibit II-1.

Exhibit II-1
Services Delivered from South African Contact Centers by Sector

                Sector                                     Examples of Services Supported

  Telecoms/ISPs                               -- Inbound customer service including billing support
                                              -- Outbound sales & cross-selling including contract renewals, welcome calls &
                                                 health checks
                                              -- Provisioning & fault management

  Online retailing/home shopping              -- Inbound customer service including delivery support and credit card
                                                 processing in support of online orders
                                              -- Outbound revenue protection, including out-of-date cards
                                                 & out-of-stock handling
                                              -- Customer recovery operating off-process

  Insurance                                   -- Inbound customer service
                                              -- Inbound & outbound sales including courtesy calling
                                              -- Customer validation, fraud-checking and policy activation

  Energy & utilities                          -- Inbound customer service in support of billing, meter issues, & outages
                                              -- Debt collection
                                              -- Up-selling & cross-selling

  Airlines                                    -- Reservations handling and flight changes
                                              -- Loyalty program support
                                              -- Travel agent support services

  Banking                                     -- Customer service
                                              -- Collections
                                              -- Application processing

  Media                                       -- Outbound renewals & cross-selling

In terms of volume, the dominant sectors at present are telecoms/ISPs and
online retailing/home shopping, though the level of International contact center
activity in the energy & utilities sector has increased significantly in recent years
and South Africa has strong financial services domain expertise and provides
contact center expertise in addition to industry-specific services to international
banks and insurance companies.

In addition to English-language work, which currently accounts for
approximately 90% of international contact center services from South Africa,
South Africa also provides European language customer service, with for
example Amazon and an airline both providing German language customer
service from South Africa.

                                                                                                                                         5
B. Evaluate for Revenue-Generating Capability in Support
   of Online Businesses
South Africa has a strong capability in supporting revenue generation and revenue
protection within International contact center services.

Reasons why organizations have chosen South Africa in preference to other offshore
locations for International contact center services include:

•   High level of cultural affinity between South Africa and U.K., Europe, and Australia
•   The ability of South African agents to have a greater level of dialogue with, and
    develop greater empathy with, customers than agents in other offshore locations
•   The ability of South African agents to handle complex calls and to negotiate and do
    deals, for example, in support of collections.

These latter two factors, combined with the ability of South African agents often to
outperform existing onshore centers in terms of the customer experience, are critical
to revenue-generation. South African delivery has traditionally been used in support of
collections because of these skills and more recently the industry has developed greater
capability in areas such welcome calls, health checks, and other soft-sales approaches.

To complement this, South African delivery has a particular strength in outbound calls
in support of these types of activity with approximately 27% of the International contact
center activity outbound-based.

Examples of existing “revenue-generating” services include:

•   Outbound subscription renewals on behalf of a leading legal publications business
•   Health checks in support of a major utility
•   Health checks and contract renewals in support of a major ISP
•   Cross-sales to existing mobile telecoms customers
•   Support for group bookings for major airline
•   Outbound revenue protection calling for major retailer
•   Deployment of customer recovery team for major online retailer
•   Order taking for major energy company.

C. Evaluate as GDN Center within Financial Industry-Specific &
   for Africa-to-Africa Back-Office Services
While much of current international BPO service delivery from South Africa comprises
contact center services, there is also a significant level of international service delivery
around financial industry-specific and back-office services.

The majority of these services are banking and insurance industry-specific services,
though South Africa should also be considered as a potential location within an
organization’s global delivery network for back-office shared services in areas such
as finance & accounting and human resources for “Africa-to-Africa” support, with
organizations increasingly using South Africa as the basis for their African shared
services hubs.

Examples of services delivered from South Africa in support of financial industry-
specific services and back-office services are shown in Exhibit II-2.

6
Analysis of South Africa as a BPO Delivery Location

EXHIBIT II-2
Financial Industry-Specific Services Delivered from South African by Sector

                     Sector                                   Profile of Services Supported

    Life insurance                             -- New business capture
                                               -- Premium collections
                                               -- Policy administration
                                               -- Claims processing
                                               -- Commission handling

    Fund administration                        -- Investment & portfolio administration
                                               -- Client reporting
                                               -- Finance

    Asset management                           -- Fund accounting
                                               -- Business analysis
                                               -- Client services

In general, South Africa remains suited to the more complex handling of
processes and customers within these domains, rather than the more basic
transaction processing, which is increasingly being automated.

The benefits achieved by organizations using South Africa for financial
industry-specific services are:

•    Cultural match with clients and clients’ clients and ability to be accepted
     and build relationships
•    Ability to handle complex and specialized processing work that
     cannot easily be handled out of other highly standardized offshore
     processing centers
•    Time zone benefits for complex tasks where frequent communication with
     the client is required
•    Cost reductions compared to onshore delivery of approximately 45%
•    Presence of high-caliber financial services workforce for
     non-voice services
•    Staff more productive than alternative offshore locations for complex
     processing tasks
•    Customers more amenable to service delivery from South Africa than
     from other offshore locations such as India
•    Accent neutrality & cultural affinity.

Within back-office services such as finance & accounting and human
resources, South Africa is increasingly being used as a location for Africa-to-
Africa shared services. The principal reasons for choosing South Africa are:

•    Its relatively high level of political stability compared to other countries
     in the region
•    The relative maturity of transactional SSC skills in South Africa.

                                                                                                                                           7
International Contact
Center Services
A. Business Challenges Faced & Drivers for Offshoring to South Africa
While many major organizations wish to reduce their cost           Other significant factors mentioned included:
of customer service, they are typically no longer prepared
to do so at the expense of their customer experience. A            •   The ability of South African agents to handle complex calls
more typical current requirement is for organizations to               and to negotiate and do deals, for example, in support
seek to initially maintain their current levels of CSAT while          of collections
reducing their customer service volumes and costs, and then        •   The ability of South African agents to have a greater level of
to subsequently look to increase their CSAT at this lower              dialogue with, and develop greater empathy with, customers
cost point.                                                            than agents in other offshore locations
                                                                   •   The existence of a population of second-generation
At the same time, there is considerable and increasing                 Europeans with native European language skills
emphasis on enhancing sales and on revenue protection, with        •   Availability of financial services skills
organizations doing this for example by introducing services       •   Prior familiarity with South Africa and ease of access to
such as welcome and check-up calls or dealing proactively              client management.
with customer issues regarding card payment.
                                                                   The three main locations for delivery of International contact
Accordingly, organizations offshoring contact center services      center services from South Africa are:
to South Africa are not doing so in order to achieve maximum
customer service cost reduction. Instead, they are typically       •   Cape Town (approximately 66% of FTEs)
looking initially for an “onshore-equivalent” customer             •   Durban (approximately 22% of FTEs)
service to address their lack of onshore capacity, and/or are      •   Johannesburg (approximately 12% of FTEs).
endeavoring to achieve onshore-equivalence at a significantly
lower price point. Typically these organizations are “moving”      Cape Town remains the key location for delivery of international
service delivery from onshore to South Africa but in other         contact center services, though Johannesburg and Durban
instances they are reacting against the standard of customer       are increasing in importance. In addition, the organizations
service from other offshore locations and looking for a higher     interviewed for this study were increasingly reviewing additional
standard of customer empathy than that currently achieved          locations such as Port Elizabeth, and both Johannesburg and
from those locations.                                              Pretoria already figure strongly in the delivery of “Africa for
                                                                   Africa” financial services customer service.
The principal business challenges faced by these
organizations and their drivers for considering offshoring to      Although approximately 90% of International contact center
South Africa are:                                                  activity takes place in English, South Africa also provides
                                                                   European language customer service, with for example Amazon
•   Need to scale to support business growth                       and an airline both providing German language customer
•   Lack of onshore capacity/difficulty in recruiting onshore      service from South Africa, and customer services being provided
•   Need to match onshore customer experience at lower             in a wide range of European languages. The breakdown of
    price point                                                    countries served by number of FTEs for non-African International
•   Need for brand protection at lower price point                 contact center services is:
•   Disillusion with customer service delivery from another
    offshore location                                              •   U.K. 70%
•   Experiencing high attrition onshore.                           •   Australia 19%
                                                                   •   Continental Europe 11%.
The principal reasons for then choosing South Africa in
preference to other offshore locations for International           In terms of call type, South African delivery has a particular
contact center services are (in order of number of mentions):      strength in outbound calls in support of welcome calls, sales,
                                                                   and collections with approximately 27% of the International
•   The ability of agents to deliver the same quality of service   contact center activity outbound and 73% of activity inbound.
    as onshore much more cost-effectively
•   Cost-effectiveness of service                                  The main channel used in support of international contact
•   High level of cultural affinity between South Africa and       center services is still overwhelmingly voice. However, non-voice
    U.K., Europe, and Australia                                    services particularly around email handling and web chat are
•   The high acceptability/familiarity of the South African        increasing in importance, with for example both Merchants and
    accent in the U.K.                                             WNS estimating that a fifth or more of their activity is non-voice.

8
Analysis of South Africa as a BPO Delivery Location

B. Sectors Served and Services Delivered from South Africa
Exhibit III-1 shows, on the basis of the organizations interviewed by NelsonHall,
the current profile of organizations using South African contact center services for
international customer service by industry sector.

EXHIBIT III-1
Profile of Organizations Using South African Contact Center Services by Sector

                           Sector                                      Proportion of Organizations (%)

  Telecoms/ISPs                                                                                       37

  Financial services                                                                                  16

  Online retailing/home shopping                                                                      13

  Airlines                                                                                            13

  Energy & utilities                                                                                  13

  Other, including media & high-tech                                                                   8

Exhibit III-2 shows the profile of sectors using South Africa for international customer
service by current number of call center FTEs.

EXHIBIT III-2
Profile of Sectors Using South African Contact Center Services by Number of Call Center FTEs

                           Sector                                                          Proportion (%)

  Telecoms/ISPs                                                                                       40

  Online retailing/home shopping                                                                      23

  Energy & utilities                                                                                  16

  Financial services                                                                                  11

  Airlines                                                                                             7

  Other                                                                                                3

This latter exhibit excludes a major financial services firm’s use of South Africa for
“Africa to Africa” customer contact services, which would increase the proportion
of FTEs within the financial services sector significantly.

South African delivery continues to be used strongly in support of the telecoms/
ISP sector by both Australian and U.K. organizations, with the adoption of South
African delivery by U.K. telecoms operators continuing to develop significantly
in recent years. At the same time, the mix of services provided in support of
telecoms operators has begun to become more sophisticated with an increasing
emphasis on soft-selling via welcome calls, health checks, and cross-selling.

                                                                                                                                             9
10
Analysis of South Africa as a BPO Delivery Location

                                                11
Similarly, in the online retailing sector,   sectors continue to be dominant, a             South African delivery in support
Amazon continues to add to its               sector which has adopted South African         areas such as flight changes and
capability in South Africa, and other        delivery more recently is the utilities        complex itinerary booking in support
online retailers have moved beyond           sector. Here U.K. utilities are increasingly   of frequent flyers, while in the banking
simple customer service and inbound          using South Africa for inbound customer        sector, card companies continue
sales to incorporate outbound revenue        service to provide support for billing,        to use South Africa for application
protection services and customer             meter issues, and outages, together with       support and for collections, and
recovery teams.                              debt collection.                               the insurance sector uses South
                                                                                            African delivery for inbound and
While, customer service delivery from        One constant theme is the ability              outbound sales.
South Africa in support of both the          of South Africa to largely match, or
telecoms/ISP and online retailing sectors    exceed, onshore delivery in the delivery       The profile of services delivered from
has been well-established for some time,     of complex services where unscripted           South Africa in support of international
and in terms of volume the telecoms/         customer interaction is required. Here,        customer service is shown by sector in
ISP and online retailing/home shopping       for example, a number of airlines use          Exhibit III-3.

EXHIBIT III-3
Services Delivered from South African Contact Centers by Sector

                   Sector                                    Examples of Services Supported

     Telecoms/ISPs                             -- Inbound customer service including billing support
                                               -- Outbound sales & cross-selling including contract renewals, welcome calls &
                                                  health checks
                                               -- Provisioning & fault management

     Online retailing/home shopping            -- Inbound customer service including delivery support and credit card
                                                  processing in support of online orders
                                               -- Outbound revenue protection, including out-of-date cards & out-of-stock
                                                  handling
                                               -- Customer recovery operating off-process

     Insurance                                 -- Inbound customer service
                                               -- Inbound & outbound sales including courtesy calling
                                               -- Customer validation, fraud-checking and policy activation

     Energy & utilities                        Inbound customer service in support of billing, meter issues, & outages
                                               Debt collection
                                               Up-selling & cross-selling

     Airlines                                  Reservations handling and flight changes
                                               Loyalty program support
                                               Travel agent support services

     Banking                                   Customer service
                                               Collections
                                               Application processing

     Media                                     Outbound renewals & cross-selling

In line with the “onshore-equivalence” of South African contact center services, the
range of customer service delivered from South Africa typically goes beyond simple
queries to handling the full range of customer services, including complex queries in
unscripted form.

12
Analysis of South Africa as a BPO Delivery Location

C. Benefits Achieved from South African Service Delivery
Organizations using South Africa for contact center services are typically not looking
for the lowest cost location globally. Typically they are seeking onshore levels of
customer experience at a reduced cost. These benefits are currently being delivered.

The benefits achieved by organizations using contact center services for
International customer service, typically to the U.K. and Australia, are, again in
order of number of mentions:

•   Equal or better customer experience (CSAT or NPS) relative to onshore
    delivery. The majority of organizations are matching onshore delivered
    customer experience at a lower price point, though approximately a third of
    organizations reported that their South African delivery was outperforming their
    onshore delivery
•   Cost savings (averaging 40% and typically in the range 30% to 50%) compared to
    onshore service delivery from the U.K. and Australia
•   High first call resolution rates
•   Ability to deliver more complex end-to-end processes than from other offshore
    delivery locations
•   Matching and frequently outperforming onshore delivery in sales and
    debt collection
•   Ease of management due to time zone compatibility.

The emphasis on effectiveness rather than absolute cost reduction is indicated
by the measures currently being used to manage contact center services in South
Africa, with organizations typically placing reduced emphasis on measures such as
average handling time (AHT) and increasingly emphasizing performance against
measures such as:

•   Net promoter score (NPS)
•   Other forms of CSAT
•   First contact resolution rates (FCR)
•   Sales conversion rates
•   Collection success.

In line with this high emphasis on effectiveness, South African agents are frequently
handling calls unscripted, with organizations aiming for high levels of natural
communication in order to achieve high NPS scores.

Attrition varies by type of activity being undertaken but is generally perceived to
be lower than other offshore locations with several of the organizations interviewed
citing attrition rates significantly below 20%.

D. Contact Center Services Delivery Cost Structure
The cost of a contact center agent in Cape Town averages approximately £635 per
month (£1=ZAR18.9 at June 2015).

Telecoms & facilities costs add approximately 40% to this cost per agent for
international service delivery to the U.K.

This gives a total cost per FTE for contact center services from Cape Town starting at
approximately £11,000 per annum before government incentives.

                                                                                                                                         13
Financial Industry-Specific Services
A. Business Challenges Faced & Drivers for                             major global asset manager uses South Africa to handle
   Offshoring to South Africa                                          specialized financial processing that isn’t easily handled
                                                                       from other offshore locations while CSC uses South Africa
The principal business challenges faced by organizations               as a staging post for the roll-out of life BPO services to its
using South African service delivery for financial industry-           Indian operations in support of its U.S. life BPO clients and to
specific services from South Africa were the need to address           handle complex parts of the value chain. Similarly both Old
difficulties in scaling onshore delivery, and to support local         Mutual and Discovery are seeking to build global financial
clients and begin to extend the organization’s presence both           services shared service centers in South Africa, with both
in South Africa in particular and Africa in general. “Africa to        new financial services product development and processing
Africa” delivery is becoming a major factor in the financial           being concentrated in South Africa, while Kleinwort Benson
services sector.                                                       encourages its South African fund administration personnel to
                                                                       build relationships with clients in Europe.
Accordingly, the reasons for organizations using South
African service delivery for industry-specific services were:          Overall NelsonHall estimates that at present approximately
                                                                       50% of financial industry- specific and back-offices services
•    Time zone compatibility                                           delivered from South Africa are English language based
•    The high cultural fit with the U.K.                               with the remaining 50% being German, Dutch, and French-
•    To generate South African business.                               based. While it is likely that the proportion of English-
                                                                       language within this mix will increase as the industry scales,
Cost-effectiveness was frequently not an initial factor in             South Africa remains a viable consideration for Continental
moving work to South Africa but became increasingly                    European back-office services within a company’s global
important after the financial downturn.                                delivery network.

In financial services, as in contact center services, South            International Services Delivered & Why
Africa is typically being used for more complex processing             Examples of services delivered from South Africa in
tasks, requiring high levels of expertise and frequently               support of financial industry- specific services are shown
higher levels of customer engagement. For example, a                   in Exhibit IV-1.

EXHIBIT IV-1
Financial Industry-Specific Services Delivered from South African by Sector

                     Sector                                     Profile of Services Supported

    Life insurance                              -- New business capture
                                                -- Premium collections
                                                -- Policy administration
                                                -- Claims processing
                                                -- Commission handling

    Fund administration                         -- Investment & portfolio administration
                                                -- Client reporting
                                                -- Finance

    Asset management                            -- Fund accounting
                                                -- Business analysis
                                                -- Client services

In general, South Africa remains suited to the more complex handling of processes
and customers within these domains, rather than the more basic transaction
processing, which is increasingly being automated.

14
Analysis of South Africa as a BPO Delivery Location

Experience of Companies with Financial Industry-
Specific & Back-Office Services from South Africa
Benefits Sought and Achieved

The benefits achieved by organizations using South Africa
for financial industry- specific services, were stated to be:

•   Cultural match with clients and clients’ clients and
    ability to be accepted and build relationships
•   Ability to handle complex and specialized processing
    work that cannot easily be handled out of other highly
    standardized offshore processing centers
•   Time zone benefits for complex tasks where frequent
    communication with the client is required
•   Cost reductions compared to onshore delivery of
    approximately 45%
•   Presence of high-caliber financial services workforce for
    non-voice services
•   Staff more productive than alternative offshore
    locations for complex processing tasks
•   Customers more amenable to service delivery from
    South Africa than from other offshore locations such
    as India
•   Accent neutrality & cultural affinity.

As with contact center services, it is apparent that
South Africa is most appropriate for handling complex
financial industry-specific task, often involving a
high level of customer intimacy as part of a global
delivery network for industry-specific services such as
investment administration.

                                                                                                              15
Skills Availability
& Government Incentives
A. Skills Availability                      recent years, it remains high relative to    As part of a national effort to build
                                            other potential offshore locations, with a   on the existing talent base, BPESA,
South Africa has approximately              2Mbps line costing approximately ZAR         the BPO industry association in South
5m English speakers with 160,000            300,000 per annum.                           Africa, are in the process of launching a
graduates per annum emerging from                                                        new skills based learning initiative that
its universities.                           In addition to the BPS Incentives            will use game mechanics to educate
                                            scheme, the South African government         and assess talent for the industry. The
However, the contact center industry        provides financial support for talent        initiative is funded by the Rockefeller
in South Africa typically employs           development programs, through:               Foundation and will be focused on
first-time agents from the high school                                                   school leaver talent. The assessment will
population rather than from the             •   The Monyetia Work Readiness              focus on various contact center specific
graduate population, with organizations         program, whereby employers lead          skills and will be targeted at previously
stating that approximately 1 in 4               consortia to recruit and train entry     disadvantaged communities where
applicants are of a suitable standard           level staff, and the government          youth unemployment is highest.
to become customer service agents.              provides approximately ZAR 23,500
The matriculating and non-degree                per unemployed person trained.
tertiary pool of personnel consists             The scheme is aimed at young             B. Government Support &
of approximately 250,000 personnel              employed South Africans, focused            Incentives for BPO
per annum.                                      on individuals from previously
                                                disadvantaged communities                The initial Business Process Services
Overall it is estimated that 410,000        •   Sector Education and Training            (BPS) incentive scheme was
personnel with potential to work                Programs, covering key sectors such      implemented in January 2011, since
in the BPO industry enter the                   as banking, insurance, services,         then the South African dti estimates
workforce annually.                             finance & accounting, and IT,            that approximately 9,000 offshoring
                                                whereby employers can claim up           jobs have been created. This initial
South Africa also has an established            to 75% of levies paid under the          scheme has now been replaced by a
body of personnel with accounting and           National Skills Fund.                    revised Business Process Services (BPS)
financial services expertise, including                                                  Incentive, effective between October 1,
approximately 36,000 chartered              The Monyetia Work Readiness Program          2014 and March 31, 2019.
accountants, 1,260 CFA charter holders,     aims to increase the pool of entry-level
and 920 qualified actuaries.                employable people, while SETA aims to        In order to qualify for the scheme,
                                            accelerate the development of home-          applicants need to put forward “projects
In terms of physical infrastructure,        grown supervisors and managers. So           that meet the strategic objectives
the standard of buildings and roads         far, approximately 10,000 learners have      of the dti”. In addition, approval of
in cities such as Cape Town are             qualified from the Monyetia program          applications is subject to the availability
comparable with those in Western            with a fourth phase covering 3,000           of funds and compliance with the
Europe. In addition the cost of living      learners now underway.                       relevant provisions of the Public Finance
is relatively low with the cost of living                                                Management Act (PFMA).
in Johannesburg estimated to be 56%         In general, organizations, particularly
lower than that in London, Cape Town        service providers, using South African       The primary objective of the incentive
62% lower than London, and Durban           delivery should look to get involved         is to create employment in South Africa
67% lower than London.                      in talent development initiatives            through servicing offshore activities.
                                            such as these, both from a corporate         The secondary objectives of the
One of the attractions of South Africa,     responsibility perspective and also for      program include:
and in particular Cape Town, is that        access to trained personnel.
it is a location where executives from                                                   •   Creating youth
the U.K., Europe, and Australia will        Services are also available to assist            employment opportunities
feel relatively at home culturally, and     organizations in testing the viability of    •   Contributing to the country’s export
where they will be willing to visit, even   captive and outsourced international             revenue from offshoring services.
for extended periods. Short visits          service delivery from South Africa and
are facilitated from the U.K. by the        in gaining access to local knowledge,        The Business Process Services Incentive
availability of overnight flights in both   with, for example, KPMG assisting            consists of two components:
directions, so that working time lost       organizations in feasibility studies and
due to travel is minimized.                 establishing shared service center           •   A base incentive
                                            hubs, EOH offering recruitment               •   A graduated bonus incentive,
The telecoms infrastructure is now          and “learnership” services, and the              dependent on the applicant
robust. However, although the cost          Rockefeller Foundation providing “work           exceeding certain annual offshore
of telecoms has fallen considerably in      readiness” support.                              job creation targets.

16
Analysis of South Africa as a BPO Delivery Location

The key eligibility criteria to qualify for      in the Government Gazette 11               •   The project must employ at least
BPS Incentives are:                              October 2013 in terms of the                   80% youth, defined as people
                                                 Codes of Good Practice. This                   between the ages of 18 and 35
•    Be a registered legal entity in South       entails applicants:                        •   The project must by the end of
     Africa as a going concern and with a        − Achieving at least level 6 B-BBEE            three years from the start of the
     valid tax clearance certificate               contributor status or submitting             operation, or the expansion, create
•    Be involved in starting a new                 a plan showing how this will be              and maintain at least 50 new
     operation or expanding an                     achieved from twelve months                  offshore jobs in South Africa
     existing operation                            to end of twenty-four months             •   In a joint venture, at least one of the
•    Submitting an application for BPS             from the date of incentive                   parties must be registered as a legal
     Incentives prior to the engagement            grant approval                               entity in South Africa.
     of qualifying jobs but having already       − Achieving level 5 B-BBEE
     secured a contract for offshore               contributor status from 24-months        Assuming the above conditions are
     BPS activities                                to 36-months from the date of            met, to qualify for BPS Incentive, a
•    Comply with the requirements                  incentive grant approval                 project must achieve at least sixty
     for Broad Based Black Economic              − Achieving level 4 from 36 months         percent (60%) against the evaluation
     Empowerment (B-BBEE) as issued                to end of the incentive period           criteria shown in Exhibit V-1.

EXHIBIT V-1
BPS Incentive Qualification: dti Evaluation Criteria

    Evaluation                 Category                     Parameters measured                                        Sub-
      Criteria                  weights                                                                             category
                                  (%)                                                                               weight (%)

    Credibility of the                 40          Company/Parent Revenues                                                   33
    company/parent
                                                   Number of years since inception                                           33

                                                   Company/Parent Net Profit (PAT)                                           33

    BPO/Shared                         20          Shared services scale or total number of BPO                              50
    services credentials                           delivery FTEs globally

                                                   Offshore scale of BPO delivery FTEs/shared services                       50

    Scale of operations                20          SA entity scale                                                           50
    in South Africa
                                                   Current scale of offshore BPO jobs in SA                                  50

    Soundness of the                   20          Contract duration                                                         25
    application under
    review                                         Revenue of buyer (end-users)                                              25

                                                   Strength of contract (Transition plan, processes,                         50
                                                   timelines, termination clause)

The project must at least score a minimum of five percent (5%) category weight for
each above-mentioned evaluation criteria.

The base incentive is calculated on projected offshore jobs to be created based on
a tapering scale and is awarded on actual offshore jobs created as per the definition
of full-time equivalents. The base incentive offers a differential (two-tier structure)
incentive for non-complex jobs and complex jobs, based on a fully loaded operating
cost per job and is paid for a period of five years (60 months) from the date at which
offshore jobs are created.

The base incentive will be determined at application stage depending on the fully
loaded operating costs.

                                                                                                                                          17
The base incentives for non-complex jobs and for complex jobs are as follows:

Non-complex Jobs

                  R 124 000*

                                R 112 000*

                                              R 108 000*

                                                            R 100 000*

                                                                         R 92 000*

 Number of        2014/15       2015/16       2016/17       2017/18      2018/19      2019/20    2020/21    2021/22    2022/23
 offshore
 jobs

 Up to 400        R 32 000      R 24 000      R 24 000      R 24 000     R 20 000     R 20 000   R 20 000   R 16 000   R 16 000

Complex Jobs

                  R 184 000*

                                R 176 000*

                                              R 160 000*

                                                            R 144 000*

                                                                         R 136 000*

 Number of        2014/15       2015/16       2016/17       2017/18      2018/19      2019/20    2020/21    2021/22    2022/23
 offshore
 jobs

 Up to 200        R 40 000      R 40 000      R 40 000      R 32 000     R 32 000     R 32 000   R 24 000   R 24 000   R 24 000

* Total grant per job created and maintained over 5 years

“Non-complex jobs” are jobs where the fully loaded operating cost is less than
or equal to R300 000 per annum with wages contributing at least 65% of the
operating cost base for a steady state of operation.

“Complex jobs” are jobs where the fully loaded operating cost is greater than
R300 000 per annum per job with wages contributing at least 65% of the operating
cost base for a steady state of operation.

18
Analysis of South Africa as a BPO Delivery Location

The bonus incentive is paid at the end of year five.

The bonus incentive for non-complex jobs is available to applicants that create and
maintain more than 400 offshore jobs over a 5-year period and it is structured into
the two components shown in Exhibit V-2.

EXHIBIT V-2
BPS Incentive Bonus Scheme: Non-Complex Jobs

       Number of                       Bonus Incentive                                    Illustration
      offshore jobs

  Greater than 400 but less than       20% once-off                       Bonus calculated for each job created and
  or equal to 800                                                         maintained between 401 and 800

                                                                          Illustration: If an investor creates 420 actual
                                                                          offshore jobs in 2014/15, 430 jobs in 2015/16,
                                                                          440 jobs in 2016/17, 450 jobs in 2017/18 and 460
                                                                          jobs in 2018/19. Given that an investor created
                                                                          and maintain more than 400 jobs over a five year
                                                                          period, the bonus incentive amount at the end of
                                                                          the fifth year (2018/19) is calculated as follows:

                                                                          • Bonus: R 32,000*20%*20 = R 128,000

  Greater than 800                     30% once-off bonus                 Bonus calculated for each job created and
                                                                          maintained in excess of 800

                                                                          Illustration: If an investor creates 850 actual
                                                                          offshore jobs in 2014/15, 865 jobs in 2015/16,
                                                                          875 jobs in 2016/17, 880 jobs in 2017/18 and 900
                                                                          jobs in 2018/19. Given that an investor created
                                                                          and maintain more than 800 jobs over a five year
                                                                          period, the bonus incentive amount at the end of
                                                                          the fifth year (2018/19) is calculated as:

                                                                          • Bonus: R 32,000*30%*50 = R 480,000

Source: the dti

                                                                                                                                      19
The bonus incentive for complex jobs is available to applicants that create and
maintain more than 200 offshore jobs and it is structured into the two components
shown in Exhibit 3.

EXHIBIT V-3
BPS Incentive Bonus Scheme: Complex Jobs

       Number of                 Bonus Incentive                                    Illustration
      offshore jobs

     Greater than 200 but less   20% once-off                   Bonus calculated for each job created and maintained
     than or equal to 400                                       between 201 and 400

                                                                Illustration: If an investor creates 220 actual offshore jobs
                                                                in 2014/15, 230 jobs in 2015/16, 240 jobs in 2016/17, 250
                                                                jobs in 2017/18 and 260 jobs in 2018/19. Given that an
                                                                investor created and maintain more than 200 jobs over a
                                                                five year period, the bonus incentive amount at the end of
                                                                the fifth year (2018/19) is calculated as:

                                                                • Bonus: R 40,000*20%*20 = R160,000

     Greater than 400            30% once-off bonus             Bonus calculated for each job created and maintained in
                                                                excess of 400

                                                                Illustration: If an investor creates 450 actual offshore jobs
                                                                in 2014/15, 465 jobs in 2015/16, 475 jobs in 2016/17, 480
                                                                jobs in 2017/18 and 500 jobs in 2018/19. Given that an
                                                                investor created and maintain more than 400 jobs over a
                                                                five year period, the bonus incentive amount for the fifth
                                                                year (2018/19) is calculated as:

                                                                • Bonus: R 40,000*30%*50 = R 600,000

Source: the dti

20
Analysis of South Africa as a BPO Delivery Location

The potentially challenging element in directly accessing the BPS Incentive
program for International organizations looking to establish own operations, or
captives, is the necessity to achieve B-BBEE Contributor status.

The award of points within the scorecard is shown in Exhibit V-4.

EXHIBIT V-4
B-BBEE Generic Scorecard

                Element                         Weighting (points)

    Ownership                                                  25

    Management Control                                         15

    Skills Development                                         20

    Enterprise & Supplier Development                          40

    Socio-Economic Development                                 5

This requires organizations to achieve:

•    B-BBEE Level 6 contributor status within 12- 24months (>=70 points)
•    B-BBEE Level 5 contributor status from end 24-months to 36-months
     (>= 75 points)
•    B-BBEE Level 4 contributor status from end 36-months to end of
     incentive period (>= 80 points)

                                                                                                                                21
22
Analysis of South Africa as a BPO Delivery Location

Companies Delivering Services
from South Africa
Contact Center Services
A. Aegis
Aegis currently employs approximately 1,300 FTEs in               of the client takes three weeks covering all soft skills,
South Africa: 3/4 in Johannesburg and 1/4 in Durban, and          systems, sales skills, and product knowledge.
is expecting to add a further 250 people across these 2
locations shortly.                                                Aegis supports pay-as-you go energy customer service for
                                                                  the UK based energy & home services company, covering
In addition, Aegis is potentially looking to add Port             all inbound customer service queries around billing, meter
Elizabeth as a delivery location in 2015.                         issues and outages. The service is delivered via 230 FTEs
                                                                  based in Johannesburg. South Africa was again selected on
The current breakdown of Aegis’ activity in South Africa          the basis of service quality and cultural affinity.
is 70:30 (domestic to international). All “international”
activity is currently in support of U.K.-based organizations,     The training for agents to support the client takes 6-7
but Aegis South Africa is increasingly targeting the              weeks, due to the complexity of the pay-as-you-go product.
Australian market.                                                This included training with the temperature turned down to
                                                                  provide an appreciation for agents of U.K. temperatures.
Aegis currently has two “international” clients, namely a
leader in legal and business research and a U.K. based            In terms of benefits, Aegis has recently achieved a score of
energy and home services company.                                 7.9 against a target of 7.6 on this organization’s client loyalty
                                                                  barometer, which is a composite measure of customer
In both cases the major reasons for choosing South Africa         satisfaction. In terms of NPS, Aegis has delivered above
were the combination of high cultural affinity and cost-          target for the past six months on this account.
effectiveness. The high cultural affinity is perceived by Aegis
to lead to a high quality of service resulting in a high first    Overall Aegis services from South Africa are 85% inbound
call resolution rate.                                             and 15% outbound, the latter in support of customer
                                                                  retention and outbound sales. The majority of the outbound
In particular, Aegis provides outbound sales calls in             activity carried out by Aegis from South Africa is in support
support of renewals and up-/cross-selling of a client’s legal     of the domestic market. In addition, Aegis is looking to get
publications subscription business. In its last campaign of       into early stage collections.
this type for this organization, Aegis achieved a conversion
rate that was 19% higher than target. The cost differential       By industry sector, approximately 60% of Aegis’ South
relative to providing these services from the U.K. was            African services are in support of the financial services
approximately 30%-35%.                                            and telecoms sectors, with a further 20% of activity in
                                                                  support of the utilities sector. Beyond these sectors, Aegis
Aegis estimates that it recruits approximately 1 in 8 of          has a number of clients in the leisure/travel sector, plus a
candidates interviewed and the training program in support        government contract, and a lottery contract.

                                                                                                                                       23
B. Amazon                                                         “Amazon is satisfied with the operational and business
                                                                  results obtained by its Cape Town based operations.”
The business challenges faced by Amazon and hence
the need for offshoring:                                          Your plans to expand current service delivery from
                                                                  South Africa
“Amazon’s mission is to be the most customer centric
company on earth, providing our customers with low prices,        “Yes, Amazon is expanding its foot print in South Africa and
broad selection and fast delivery. This requires that Amazon      has launched 2 new operations in Cape Town over the last
is able to provide services on a 24/7 basis. Geographic           18 months.”
locations such as Cape Town provide the infrastructure and
ability to enable this service.”
                                                                  C. Barclays Africa Group Limited
The services being offshored and why this portfolio of
services was chosen for delivery from South Africa:               “Like many of the major financial institutions, Barclays
                                                                  established their shared services operations in India in the
“Amazon has had a development center in Cape Town                 mid-2000s which has now grown to a business of 9,000
since 2005. We opened the development center in Cape              employees. As a bank they had to de-risk the business by
Town to tap into the great local talent available in this area,   finding alternative locations.
and more generally in South Africa. The Center has played,
and continues to play, an instrumental role as a contributor      South Africa is regarded as a strategic location for Barclays
to the worldwide Amazon Web Services group, and in                as Barclays Africa Group Ltd (BAGL, inclusive of Absa) forms
particular in building and operating the Amazon Elastic           almost a third of Barclays PLC. Barclays Shared Services
Compute Cloud. Amazon Web Services allow software                 Africa was established in 2012 with the aim of supporting
developers anywhere in the world to make use of Amazon’s          the 12 African countries in terms of infrastructure, talent
world class global infrastructure under a simple, cost-           development and business expansion. South Africa was an
effective pay-for-what-you-use model. The services get rid        easy choice for Barclays due to the availability of English
of the muck, allowing our customers to focus on innovating        neutral language capability, financial services skills, political
and differentiating themselves.                                   stability, and the existing infrastructure.

Customer Services: We took our first customer service             To date, Barclays Shared Services Africa has hubs in the
call into Cape Town in October 2010 and today we have             following cities:
1,000 employees working with us to provide support to
Amazon customers around the world. The employees at               •   Pretoria: 3,300 seats
our Cape Town customer service center are an important            •   Johannesburg: 3,000 seats
part of that team. Twenty-four hours a day, this team works       •   Cape Town: 1,000 seats
hard to provide German, English and 7 other languages             •   Kempton Park: 700 seats
support for Amazon customers, as well as support for our
Digital customers.”                                               This footprint combines the two largest shared services
                                                                  hubs in South Africa with an ‘active-active’ capability for
Amazon’s location selection criteria and how South                business continuity. The Pretoria campus which is the
Africa met these criteria:                                        largest hub is well located and close to the university and
                                                                  various educational institutions. Its proximity to a large
“Cape Town has the infrastructure, telecoms and                   pool of talent provides a definite advantage, and employee
technologies, cost advantages, English language skills as         benefits include an open environment, health and wellness
well as being well positioned time zone wise to be able to        facilities. The scale of the operation further provides
provide a 24/7 service experience.”                               opportunities for vertical and lateral career development.

The benefits that Amazon was seeking from South African           The following services are at present delivered by the
delivery and the actual profile of benefits delivered             shared services hubs:

“Amazon has been able to service its customers, as                •   Customer contact operations, including all call center
planned via the Cape Town operation.”                                 activities, both voice and multi-channel, across customer
                                                                      service, and sales
Your satisfaction with delivery from South Africa, overall        •   Business processing, covering all high volume middle
and with skills availability, infrastructure, incentives, and         and back office processes such as account opening,
delivery cost structure                                               account maintenance and document management

24
Analysis of South Africa as a BPO Delivery Location

•   Specialist services, covering for example verification of   telecoms sector and including recruitment and compliance
    customer details and anti-money laundering, along with      for a nursing sector client.
    emerging activity in legal process outsourcing
•   Credit collections and recoveries.                          The breakdown of Capita’s South African delivery by service
                                                                type is approximately:
Apart from supporting Absa in South Africa, Barclays Shared
Services Africa performs the following functions in support     •   Customer service 80%
of the broader Africa region:                                   •   Collections 15%
                                                                •   Back-office 5%.
•   Business processing support for seven countries
    including Zambia, Ghana, Botswana, Tanzania,                Capita SA currently services O2 with approximately 1,000
    and Uganda                                                  FTEs. The service started initially with a “proof-of-concept”
•   24/7 contact center support for Zambia and Zimbabwe         for O2 with 170 agents providing customer service in
•   Processing services including payment processing in         support of pay-monthly customers and has now grown to
    support of Mauritius and the Seychelles                     cover three O2 businesses: pay monthly, pay-as-you-go,
•   Collections in support of Zambia and Botswana               and SMB.

Most of the work currently done out of South Africa is          These businesses are supported across a diverse range of
conducted in English, as this is the primary business           customer service queries from upgrades to problem solving
language, however work is underway to expand the                to billing queries, and assisting customers in selecting more
language services to the Africa regions, for example Swahili.   appropriate or affordable packages. Capita supports two
                                                                shifts with the later shift ending around 11pm, and also
The benefits achieved by the scale of Barclays Africa           provides support for Saturdays and Sundays.
Shared Services operation include an improved customer
satisfaction rating by 24% year on year, multi skilling of      All customer service delivery is currently voice, but Capita
staff, and the ability to absorb 23% more volume without        expects to introduce web chat from South Africa for several
increasing the number of people. The biggest challenge          clients in the near future.
faced by Barclays is the absence of a 24/7 culture in
South Africa.                                                   First call resolution is an important metric within the
                                                                contract and here South African FCR rates are equal to or
Barclays is expanding its shared services capabilities from     higher than those delivered from the UK with South African
high-volume rules based activities to also include lower-       delivery matching that from the UK in terms of CSAT.
volume and complex processes. From a cost perspective,
the differential relative to other offshore destinations has    The initial move of elements of customer service delivery
reduced considerably over the past two years. Barclays          to South Africa was driven by Capita with one condition
also participates in the dti incentive scheme to enhance        being that the move would not lead to adverse impact on
employability in South Africa and to develop more offshore      the O2 brand. Speed-to-competence was an important
job opportunities.”                                             criterion with the initial target of 6-months being achieved
                                                                in 3-months.

D. Capita                                                       In addition to high FCR rates, South African delivery has
                                                                achieved cost savings relative to the UK of approximately
Capita has been present in South Africa for more than 2         40%-45%.
years and currently employs approximately 1,500 personnel
across two sites in Cape Town. The company supports seven       Back-office work being carried out for telecoms operators
clients using South African delivery, with a strong presence    by Capita from South Africa includes document indexing
in supporting the telecoms sector.                              and distribution.

Capita South Africa has added to Capita’s existing              In terms of recruitment, Capita is targeting personnel with
capability with their presence in the BPO sector providing      experience of customer service in the hospitality, retail,
customer service with fully hosted contact center solutions     and nursing sectors. Induction and initial training takes
trusted by global leading ‘brands’ to transform their           4 weeks with agents then going into an environment
customer experience.                                            which involves calling for part of the day combined with
                                                                further training for up to a month – additional quality and
In addition to customer management services, Capita SA          leadership support provided outside of the training and
also provides back-office services both in support of the       development environment.

                                                                                                                                    25
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