AOL ENDS DIDATA DEAL
Didata, which provides technical and billing support to AOL customers in the US, says AOL decided it would not renew the contract because of changes it is making in its business. Martin Dove, global sales and marketing director at Didata subsidiary Merchants, which won the business, insists the termination had nothing to do with poor service levels. Dove says Didata won a number of internal awards from AOL for service excellence.
“Based on changes in AOL’s business requirements — reductions in call volumes it is experiencing globally — it decided not to renew the contract,” Dove says.
Though the contract is believed to be worth tens of millions of rand, Dove insists recent contract wins will more than offset the loss of business. He says operators will be redeployed to handle two call centre contracts Didata has won recently. One is a multimillion-rand deal with Carphone Warehouse, a large UK cellphone retailer.
Dove says the contracts will eventually each be worth more than the AOL deal.
This type of business process outsourcing, known as offshoring, is proving a big growth opportunity for SA based IT companies. Companies in developed markets are keen to outsource many of their business processes to markets where this can be done more cheaply.
Like Didata, IBM SA has identified offshoring as a key growth area and is investing hundreds of millions of rand in an integrated delivery centre at its head office in Johannesburg. The centre, which operates 24 hours a day, serves IBM clients in a number of countries in Northern and Western Europe. IBM SA plans to hire 900 people this year because of rapid growth in its offshoring business.
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