MOV­ING IT OUT

Finweek English Edition - - Communication & Technology - SI­MON DIN­GLE si­mond@fin­week.co.za

OUT­SOURC­ING IS be­com­ing an in­creas­ingly ap­peal­ing op­tion for busi­nesses looking to do more with less in the cur­rent eco­nomic cli­mate. As com­pa­nies lay off in­ter­nal staff and re­place them with out­sourc­ing part­ners, there’s also a knock-on ef­fect for skills avail­abil­ity.

Robert Suss­man, joint CEO of the In­tergr8 Group, says the com­pany is ex­pe­ri­enc­ing grow­ing de­mand for ser­vices it of­fers in call and IT nerve cen­tre out­sourc­ing. And whereas In­tergr8’s full time re­cruit­ment of­fi­cer was chal­lenged to find skills in a short-mar­ket be­fore, now the re­sumés are rolling in.

“The in­flux of CVs is astro­nom­i­cal,” Suss­man says. “Every­one is looking at out­sourc­ing again and re­al­is­ing the ben­e­fits of­fered by im­prov­ing ef­fi­cien­cies with a part­ner. It can be a good move for busi­nesses that suc­cess­fully ad­just their pro­cesses and per­haps start with a shared­sourc­ing model and over time mi­grate to full out­sourc­ing.”

A re­cent re­port re­leased by South African-based BMITechKnowl­edge Group re­veals out­sourc­ing is the fastest grow­ing com­po­nent in the lo­cal IT mar­ket.

An ex­am­ple of a com­pany that ben­e­fits from out­sourc­ing in th­ese dif­fi­cult times is AltXlisted IT com­pany Simeka Busi­ness So­lu­tions. Its turnover is up 27% and af­ter-tax profit up 33% to R47,5m.

Grant Bod­ley, GM for Di­men­sion Data Mid­dle East and Africa, says out­sourc­ing is pre­dicted to con­tinue to ac­count for the largest por­tion of the to­tal IT ser­vices mar­ket, re­flect­ing the fastest growth rate over the next five years with a com­pound an­nual rate of 7,7%. Out­sourc­ing now ac­counts for 44% of the to­tal IT ser­vices mar­ket in SA, he says, but adds that now’s not the time to be cut­ting bud­gets for IT. Says Bod­ley: “IT in­vest­ments of­ten de­liver more value to a com­pany’s top and bot­tom lines – by cre­at­ing ef­fi­cien­cies and in­creas­ing rev­enues – than any sav­ings gained from tra­di­tional IT cost-cut­ting.”

He agrees SA’s skills mar­ket is im­prov­ing, but says re­ten­tion will still be key. At­tri­tion rates for IT com­pa­nies av­er­age 21%, whereas Bod­ley says Di­data has man­aged to achieve 13%. He says the SME sec­tor is more ac­tive in terms of seek­ing out­sourc­ing part­ners, while large com­pa­nies still pre­fer the in-house ap­proach – al­though that’s start­ing to change. Sa­sol, for one, is ten­der­ing for an out­sourc­ing part­ner.

Grant Bod­ley

Robert Suss­man

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