Offshoring in countries vulnerable to political instability is always a risk; concerns about offshoring in South Africa have been raised by recent news headlines. To find out more, visit: http://www.sourcingmag.com/
Offshoring is clearly an attractive option for contact and call centres – primarily because it is cheap. But the old saying, ‘if it’s too good to be true, it probably is’ comes to mind. Offshoring can certainly be a cost effective move for the contact centre sector, but political instability needs to be a factor to consider.
Offshoring: The Uncertain South African BPO Sector
And the benefits of offshoring have been recently put into stark question as a result of the political uncertainty in South Africa. The break-away faction of the ANC has launched a new political party, the Congress of the People. It’s a step that follows the removal of the South African President, Thabo Mbeki and the resignation of a number of his cabinet colleagues. And the instability and uncertainty is now being considered as a factor in discouraging offshore business process outsourcing investors (BPO).
ANC Political Crisis Impacts on South African Offshoring
However offshoring in the country shouldn’t suddenly be pulled because of the political upheaval; Datamonitor, the independent market analyst has cautioned companies not to suddenly divest their offshore business process (BPO) outsourcing. Datamonitor advised that South Africa still has strong value proposition. But the firing of Thabo Mbeki by the African National Congress is surely one of the most tumultuous upheavals South Africa’s political system has faced since Apartheid fell. And political and economic instability go hand in hand. And the concern remains that BPO and offshoring companies in the region may be reconsidering their future, as well as their existing, investments in delivery from South Africa.
Offshoring Future in Question after ANC’s Bloodless Coup
South Africa has so far proven to be one of the most desirable locations on the BPO map, offering the perfect location for a multiple of third-party support services, such as contact and call centres. But there’s no doubt that the recent political turmoil will impact on business confidence in the region. Offshoring may be called into question by some firms who currently have deployments in South Africa. The bloodless coup by the ANC has put forward a presidential candidate, Jacob Zuma. And Zuma is unlikely to inspire the business community to invest in offshoring in the region thanks to his extreme left-wing stance, compared to the centrist Mbeki.





