South Africa’s contracting GDP, persistent inflation, high interest rates, and a weak Rand have created a challenging business environment. With 40% of CEOs citing inflation and macroeconomic volatility as top concerns, businesses must prioritise efficiency, cost-cutting, and adaptability to weather this storm.
This is according to Heide de Lange, Head of Operations at MVIA Insure, who notes that while generative AI has been positioned as a panacea for business challenges, its adoption rate among CEOs is surprisingly low at 35%. “While AI is capable of performing a multitude of tasks, it is no substitute for the human touch. Business process outsourcing (BPO) services, however, can bridge this gap.”
BPO: A boost for SA and its businesses
South Africa is becoming a global powerhouse in the outsourced business services arena. Its English-speaking talent pool and time zone have found favour with businesses worldwide. With the BPO market set to reach $1.89 billion this year and creating thousands of jobs annually, it is not only attracting foreign investment but also propelling its economy forward.
“While these gains bode well for the country’s economy, local businesses can also reap the benefits of the global trend by taking advantage of BPO services provided by South African providers,” shares de Lange.
She adds that outsourcing can be a game-changer for businesses facing economic pressures. “Delegating non-core functions to external providers can yield substantial cost reductions by streamlining operations and eliminating the need for additional investment in in-house infrastructure, tools and technologies. At the same time, it frees up internal resources, allowing businesses to focus on core competencies and strategic growth-driving initiatives.”
De Lange suggests that, in addition to the common practice of outsourcing IT, tax, and HR functions, businesses should also explore outsourcing administrative tasks like customer care, procedure management, and payment services. “This broader application of outsourcing could unlock returns for businesses both in terms of new capabilities and growth potential. Research shows that one in four businesses leveraging this strategy report revenue growth exceeding 10%, while 56% gain access to new value-adding competencies. By rethinking what stays in-house and what can be outsourced strategically, businesses can drive top-line growth while boosting their bottom line.”
Upsides of admin outsourcing
“One of the biggest benefits of outsourcing time-consuming, repetitive, or resource-intensive administrative tasks is the ability to significantly improve customer service levels,” she explains. “In an age where a customer’s experience determines future engagement, providing service that is prompt and efficient with minimal errors leads to greater satisfaction, which in turn fosters loyalty and retention.”
“Outsourcing also allows employees to concentrate on strategic priorities, revenue-generating activities, innovation and customer service which means the business can stay competitive,” notes de Lange.
She adds that when processes are outsourced to professionals who understand industry best practice, they can keep a firm hand on accuracy across all processes as well as offer business solutions and advice. “Additionally, tapping into their specialised skills and knowledge can differentiate a company in the market.”
In terms of risk, de Lange points out that BPO providers can help mitigate compliance risks by implementing compliance frameworks that can reduce the risk of legal challenges.
The future belongs to outsourcers
“Challenging and unpredictable market conditions demand new approaches. In these stormy economic seas, outsourcing is the compass guiding South African businesses towards a prosperous future,” she asserts. “By partnering with reputable outsourcing providers, companies can concentrate on core competencies while harnessing external expertise to navigate challenges and capitalise on emerging opportunities.”
“Outsourcing is evolving rapidly with the rise of nearshoring, cloud-based solutions, and automation. By staying abreast of these developments, businesses can make strategic outsourcing decisions that drive long-term success,” concludes de Lange.
