Demand for Skills Drives the South African Outsourced Business Data Services Market, Observes Frost & Sullivan

CAPE TOWN, South Africa, March 18 /PRNewswire/ -- Business data services have increasingly emerged as business-critical in South Africa. However, the majority of business data services are complex, resource-intensive and expensive to operate in-house.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

Furthermore, stringent regulatory requirements in sectors such as financial services, retail and hospitality have resulted in operators opting for specialist expertise by outsourcing these services, to ensure that their systems are legislation-compliant. While cost cutting has historically been the main reason for outsourcing, in the case of business data services, improved efficiencies and access to skills are the key drivers.

New analysis from Frost & Sullivan (http://www.ITservices.frost.com), South African Client Requirements for Outsourced Business Data Services, finds that the market earned revenues of $158.00 million in 2008, and estimates this to reach $327.00 million in 2015.

If you are interested more information on this study, please send an e-mail to Patrick Cairns, Corporate Communications, at [email protected] with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

"The critical shortage of relevant skills for business data services, the high cost of retaining dedicated in-house staff, and rising legislative and regulatory demands are encouraging companies to outsource their data services processes and systems," says Frost & Sullivan Research Analyst Spiwe Chireka.

Most of the data services in South Africa have reached the maturity stage or are nearing maturity in terms of adoption and usage. These include Internet services, data storage services and disaster recovery/business continuity services. Consequently, the outsourcing of these services has followed a similar trend.

However, cost savings from outsourcing services have not been as forthcoming as the market initially expected. Additionally, customer service has been below the customers' expectations, resulting in some providers in-sourcing their data services operations.

"Companies have indicated that it is not always possible to justify the acquisition of a completely new system and as a result, they are often required to integrate new components with legacy equipment, posing issues in terms of interoperability," explains Chireka. "While strong inroads have been made by vendors, there still remains room for improvement to provide seamless integration and interoperability between the new outsourced and existing in-house systems."

Business data services have become so mission-critical that companies are prioritising it on the true manageable total cost of ownership, rather than merely on return on investment (ROI). Thus, service providers should have a greater focus on providing the true total cost of ownership benefits and reduce their effort on promoting outsourcing as a means to cost savings.

"Customer service strategies that enhance value for the customer – access to a wide support network, deep and wide technical solutions, and applications that facilitate knowledge sharing – will provide a strong competitive differentiator for operators in the future," concludes Chireka.

South African Client Requirements for Outsourced Business Data Services is part of the IT Services & Applications Growth Partnership Services programme, which also includes research in the following markets: Communications Market, Analysis of Channel Partner Strategies in the Kenyan Telecommunications market, and East African Mobile Communications Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

South African Client Requirements for Outsourced Business Data Services

M4EA

SOURCE Frost & Sullivan