Moving it out
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 shared-sourcing model and over time migrate to full outsourcing."
A recent report released by South African-based BMI-TechKnowledge 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 AltX-listed 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.
Finweek
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