Sharing similar timezones with Europe and commonalities in terms of language and culture are key reasons for South Africa being an attractive contact centre outsourcing location.

This is according to Darren Arnold, the services executive at Merchants.

In an interview with editor of ITWeb Africa Gareth van Zyl, Arnold also explains as to why East Africa is becoming an potentially attractive business process outsourcing (BPO) and why South Africa could have the edge over nations such as India in this regard.

GARETH VAN ZYL: Can you briefly describe to our readers as to what Merchants does exactly?

DARREN ARNOLD: We’re active in three primary areas. As a contact centre outsourcer, we’re the largest in sub-Saharan Africa with circa 4,000 seats. We augment this offering with strategic consulting, looking in a broader context at customer management strategies and translating them into operational strategies and developing roadmaps for our customers. And, we have introduced a contact centre as a service offering, giving customers access to contact centre services in the cloud.

GARETH VAN ZYL: Where does Merchants have operations in Africa?

DARREN ARNOLD: All our African contact centre operations are in South Africa. We host three off-shore clients, two from the United Kingdom and one from Australia, in Cape Town, which is the industry’s offshoring destination of choice. We also have operations in Johannesburg and Durban.

Internationally, we operate as part of a joint venture with Tsys Managed Services in the United Kingdom and, in the Middle East, in a joint venture with the Bahraini government, we provide an eGovernment service to Bahraini citizens as well as outsourcing services to the private sector in Bahrain and Kuwait.

GARETH VAN ZYL: Reports in the African tech press of late have said that Nairobi, Kenya could become a serious hub for the contact/BPO industry in Africa. What are your views on this? Do we need to watch out for any other possible contact centre / BPO nodes in Africa?

DARREN ARNOLD: Yes, Nairobi is developing the skills and infrastructure needed to offer contact centre and BPO services and we expect that both South African and international organisations, particularly those in financial services, that want to expand their footprint into Africa would take a look at an East African outsourcing hub. However, the BPO market in Africa is not yet fully mature so it’s a little early to be predicting where and how world class facilities will become available.

We undertake a number of engagements in Africa, specifically with strategic consulting engagements, but from a contact centre outsource perspective, our operating model is based on partnering with clients who are intent upon opening offices in Africa rather than opening facilities and waiting for customers to come.

GARETH VAN ZYL: What is the advantage of having a contact centre in Africa as opposed to India?

DARREN ARNOLD: As the Indian BPO market has matured, we’ve seen an increase in costs. So, the initial headline cost benefits India offered have been eroded. Also, a number of the hidden costs of supporting an offshore operation with a misaligned timeline have now become more apparent. By contrast, South African timelines are more attractive to our European clients and the cost differentials between South Africa and India have converged over the years. In addition, South Africa has a clear cultural and language alignment with countries like the United Kingdom and Australia. Feedback from clients shows that India remains attractive for low value transactional, process driven functions, where language and culture are less important. For value add functions, such as complex query handling, complaint management or up and cross selling, South Africa is better able to provide enhanced customer satisfaction. This is one of the reasons that South Africa was identified last year as the contact centre offshoring destination of choice for the United Kingdom and for Europe. Importantly, these accolades were awarded prior to the weakening in the exchange rate, proving that the preference is not just about cost.

GARETH VAN ZYL: Can you briefly explain as to how technology is changing the contact centre and BPO industry?

DARREN ARNOLD: We believe there are two key technology shifts that will impact the industry. The first is contact centre as a cloud technology, which provides a much broader, more flexible offering in terms of both scale and adoption of functionality. In the cloud, the customer can adopt new applications more quickly and at lower risk. Also, because the cloud is an on demand cost model, investment in proof of concept is significantly reduced. And, the on demand model slashes contact centre costs for customers with seasonal peaks and troughs.

The second technology issue is that of technology being driven by the consumer through the use of smartphones and smart apps. The consumer is becoming much more demanding, refusing to be restricted to telephony or email and expecting the immediate response times he experiences in his personal technology interactions.

One of the challenges this creates for operators is finding the most relevant way to integrate different contact channels so that the customer who chooses one channel today and another tomorrow doesn’t have to repeat himself and equally importantly, isn’t pushed from their channel of choice by the organisation.

Another challenge is measuring the cost to serve and customer satisfaction for channels other than voice and email. Whilst upwards of 90% of organisations are measuring these metrics on the traditional channels, fewer than 50% of operators are doing such measurement across newer channels and then not very effectively. We need to continue investment in and understanding of such metrics.

GARETH VAN ZYL: How does your company approach the rise of social media and even online forums as a way for firms to reach out to customers? For instance, social media in particular is creating some seriously fast response times if done correctly by firms.

DARREN ARNOLD: Although we believe absolutely in innovation as a means of keeping BPO relevant to the market, we don’t believe in simply jumping on bandwagons. So, we adopt social media very much on a customer by customer basis and we act as a critical friend, asking questions about whether social media is appropriate for that organisation and why uptake in a South Africa is lower than other markets. For instance, Merchants conducted some independent research and found that there is a much lower propensity in South Africa than anywhere else in the world for people to interact with organisations via social media. Why, then, would an organisation offer social media as a channel unless in response to customer demand?

Also, with social media, one has very limited ability to identify the nature of the query before it reaches an agent. This brings the industry back to the old problem of trying to create a super agent capable of answering multiple query types. So far, that objective has had limited success and the industry has resorted to creating specialised teams focused around particular query types.

In addition, with social media, the primary communications channel is the written word, rather than voice – and the audience is not always one on one but can be one to many. So, you’re asking your agents to respond across all product, service, and billing query types, in writing, in a public forum, immediately. That’s an extremely tall order and can only be realised through detailed planning, effective processes, highly skilled agents and strong technology underpin.

Considerable thought needs to go into implementing social media in the contact centre before we can say it has influential value for an organisation and this thought must be focused on the specific organisation and its customers.