Southern Africa Region
Southern Africa Region
Southern Africa is the southernmost area of Africa. There are various countries located in the southern Africa including South Africa, Botswana, Namibia, Swaziland and Lesotho. Southern Africa provides information technology outsourcing and business source outsourcing. Information technology outsourcing refers to the outsourcing of computer and internet related activities like programming to other firms. Countries located in the southern part of Africa are among the top outsourcing destinations in the world. For instance, South Africa and Mauritius are among the top outsourcing destinations for information technology. There are various factors that have made the countries attractive. The factors include financial attractiveness, skilled and cheap labor and favorable business environment. The cost of labor in Southern Africa is low, and this has attracted international firms and other firms from Africa to outsource their IT. The countries have cheap and skilled labor available compared to international countries.
The high rate of unemployment in southern African countries has led to increase in investments,in the region., This is because the countries attract foreign investments to create jobs(Vagadia, 2011). Moreover, the countries have a conducive environment for outsourcing investment. Southern African countries have developed economic policies and other policies that attract foreign investment (UN millennium project, 2012). The policies have created a favorable environment for doing business. The government commitment to improve economic growth and IT infrastructure has led to increase in outsourcing activities. Some of the countries in the southern Africa like South Africa have embraced the latest technology to improve investment. The technology development has attracted international firms to outsource their information technology. Apart from information technology outsourcing, southern Africa is good for business process outsourcing. Business process outsourcing refers to the outsourcing of business processes.
The cheap and skilled labor, good infrastructure and business environment has led to increase in business process outsourcing (United Nations Economic commission of Africa, 2009). The southern African countries have developed information technology infrastructure and thus promoted business process and IT outsourcing. The taxes and education attainment in southern African countries have increased outsourcing activities. Therefore, outsourcing information technology and business processes in southern Africa saves cost and increases revenue. On the other hand, outsourcing IT and business processes might have a negative effect if the IT and business processes do not meet standards. Also, outsourcing might be time consuming and affect the operation of an organization. Some of the activities outsourced include data centers, help desk, human resource, procurement etc. Some of the countries that offer IT and BPO outsourcing include South Africa, Mauritius, Namibia and Botswana (Angwafo & Punam, 2011).
Outsourcing IT and business processes to southern African countries has more benefits than risks. The countries have sufficient labor to provide outsourcing services. Also, the cultural environment is poses minimal risk to outsourcing activities. The political environment poses risks to US forms outsourcing to those countries. Political instability in the countries can affect outsourcing and hence profitability of US firms. South Africa is stable politically, and hence many foreign firms have invested in the country. Managers should consider the political risks when outsourcing though outsourcing in southern Africa has a lot of benefits. Some countries in the southern region are positioning themselves as IT and BPO outsourcing destinations. The countries have invested heavily in infrastructure (Leavy, 2004).
Reference
Angwafo, M., & Punam, C. (2011). Yes, Africa can. Success Stories from a Dynamic Continent. World Bank Publication
Click, R.L., & Duiening, T.N. (2005). Essentials of business process outsourcing. John Wiley& sons
Duening, T.N., & Click, R.l.(2004). Business process outsourcing. John Wiley & Sons
Leavy, B. (2004). Outsourcing strategies: opportunities and risk. Strategy and Leadership, 32 (6): 20-25.
Melby, B.M., & Halvey, J.K. (2007). Business process outsourcing. John Wiley& Sons
Nakkiran, F.S., & Nakkiran,S.(2004). Business process outsourcing. Deep & Deep publication.
Patel, A. (2005). Outsourcing success. Tata McGraw-hill education
Ramanathan, T.R. (2009). The role of organizational change management in offshore outsourcing information technology services. Universal publishers
UN millennium project. (2012). UN Millennium Development Library: Trade in Development. Earth scan
United Nations Economic commission of Africa. (2009). African Economic Outlook 2009 Country Notes: Volumes 1 and 2.OECD publishing
Vagadia, B. (2011). Strategic Outsourcing. Springer
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