South Africa Launches Global Business Services (GBS) Masterplan
South Africa has launched its Global Business Services (GBS) Masterplan, a detailed blueprint and country strategy to create 500,000 cumulative international-servicing jobs in the sector by 2030.
Prepared by Genesis and commissioned by South Africa’s Department of Trade, Industry and Competition (dtic) and national investment promotion agency, InvestSA, the GBS Masterplan reveals how key stakeholders will work together to leverage off the export-orientated GBS market to achieve greater job creation and sector development in the country. The plan is also actively supported and endorsed by the industry association, Business Process Enabling South Africa (BPESA).
Since its launch, the GBS Masterplan has received widespread news coverage in IT Web, IOL and News 24, to mention a few.
Springboarding off a strong industry foundation
Recognised as 2021’s Most Favoured Offshore Customer Experience (CX) Delivery Location in the world and the largest GBS market in Africa, South Africa is already well-positioned to capture the increasing demand of international business outsourcing services.
Cumulative year-on-year new job creation growth of 24% since 2015 reflects South Africa’s strong foundation in delivering international GBS services. Youth form the bulk of new job growth, comprising 87% of new entrants into the international GBS market, of which 64% are women.
South Africa still has plenty of leg room for growth, fuelled by expanding global demand for offshore GBS. Global organizations are increasingly outsourcing more business functions, specifically in vertical specialised CX lifecycle management, in which South Africa is ranked the best in the GBS World Competitiveness Index.
Key objectives and targets
Core to the masterplan is the creation of 500,000 cumulative jobs, whereby 30% of those new jobs must be in complex and highly-complex job levels to optimise an annual export revenue of R24 billion.
In addition, the GBS Masterplan focuses on transformation by increasing black ownership, management control and linkages with black enterprises in the domestic economy.
Actionable steps
To achieve these outcomes, actions are broken down into three broad categories: demand-side, supply side, and transformation and sustainability. Acting as mechanisms in the GBS job growth engine, all categories need to move forward simultaneously to ensure growth targets are met.
The demand side considers what is required to successfully attract GBS operators and global business buyers to establish delivery sites in South Africa. Primary actions include ramping up marketing and investment promotion initiatives, as well as creating a conducive business environment by implementing financial and non-financial incentives.
Ensuring capacity for offshore GBS delivery is the supply side, which focuses on the sufficient supply of relevant skills in the country backed by enabling infrastructure. The dominant initiatives include a demand-led and sustainable skills pipeline, physical infrastructure, work-from-home (WFH) models, increased broadband infrastructure and global data policies.
Driving the deliverables is a renewed South African GBS stakeholder ecosystem comprised of role players symbiotically working together to meet the job creation objectives, including government, industry, labour and external partners.
Key findings
Despite South Africa’s relative cost competitiveness to source markets, it is not cost efficient compared to some competing offshore locations, such as India and the Philippines. As such, South Africa cannot rely on cost competitiveness alone to attract the required demand to support the targeted growth objectives. Rather, the focus will be on communicating its relative cost competitiveness combined with its compelling unique value proposition.
An area in the masterplan where a unique value proposition is being demonstrated by South Africa is its ability to improve customer lifetime value through excellent quality CX outsourcing. Analysis confirms that South Africa delivers an estimated 18% better CX quality when compared to competitor offshore markets, translating into higher customer retention each year. As a result, greater customer lifetime value (CLV) and bottom-line profits/benefits are realised.
Research approach
These findings were products of a mixed methods research methodology that was applied by the Genesis team.
Headcount and jobs forecasting data was based on the current GBS industry headcount, triangulated from four separate sources: 1) GBS Sector-wide Headcount Analysis 2) South Africa GBS National Quantification & Investment Report 3) GBS Sector Job Creation Reports and 4) GBS Operational Health & Safety Protocol Reports.
A series of online workshops enabled collaborative contributions to the direction of the masterplan between government departments, GBS businesses, industry bodies and other external stakeholders.
All sides were considered through private individual interviews with executive heads of global GBS operators that either have a presence in South Africa or do not, local government, investment promotion agencies and industry bodies. Responses were collated and aggregated, which were fed into the problem-solving and solutions analysis.
To evaluate South Africa’s current state of GBS capacity, a situational analysis of physical infrastructure, education institutions, Special Economic Zones (SEZs) and ICT infrastructure was also conducted.
The next steps
Going forward, several additional industry commitments are required from all GBS stakeholders to achieve the job and sector growth objectives of the plan. A list of actions is listed for each stakeholder group for each job creation scenario, which is reviewed every three years.
