IBM said South Africa is establishing itself as a preferred outsourcing destination, and is rapidly becoming a back-up site for India, the world's number one outsourcing provider.
Abdul Mohammed, IBM's business development executive in South Africa, said, "Although some Eastern European countries may be able to provide cheaper outsourcing solutions, the value of the Rand, the favorable time difference, as well as our proficiency in English, are shifting a considerable amount of work to our shores."
IBM claimed to be positioning itself as a leader in offshore outsourcing through a "best-shore" policy, where specific sections of accounts awarded to IBM on an international scale are outsourced to countries that fulfill the client's needs in the most cost-effective way.
The company is currently providing outsourcing solutions to American Express, JP Morgan, Ericsson and L'Oreal through IBM's internationally implemented standard policies and procedures. IBM said it provides its clients with a consistent level of service, regardless of whether the job is done through IBM SA, England or Europe.
"The implementation of service level agreements eliminates the threat of scope creep, a common concern when considering offshore outsourcing," said Mohammed, adding that the impact of culture clashes on outsourcing activities is a reality that companies have to deal with.
"The English spoken in South Africa, for example, sometimes differs slightly in meaning from that spoken in England, which could cause some confusion," he added.
One of the major challenges facing South Africa, according to IBM, lies in convincing Europe and the US that the country can provide consistent quality, although the lack of an adequate communication infrastructure is another stumbling block on the country's path to becoming a preferred offshore provider.
"Government needs to develop a communication infrastructure that is affordable and advanced enough to provide local companies with a competitive edge in the offshore outsourcing market. At this stage, our communication infrastructure is underdeveloped and comparatively expensive," said Mohammed.
In April, IBM launched its Integrated Delivery Centre in Sandton, Johannesburg, a facility through which the company aims to offer high value outsourcing solutions to clients in Europe and US, amongst other regions.
Written by Computing SA staff