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South African Client Requirements for Outsourced Business Data Services
Frost & Sullivan, Nov 2009, Pages: 112
Greater Efficiency and Access to Skills by Outsourcing Spur the Growth of the South African Outsourced Business Data Services Market
Business data services have gradually materialised to be crucial for businesses in South Africa. However, most business data services are complex, resource-intensive and expensive to operate in-house. Furthermore, stringent regulatory requirements in sectors like the 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 for outsourcing.
'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 the analyst of this research. 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.
Business Data Services Providers to Focus on Providing the True Total Cost of Ownership Benefits
As cost savings from outsourcing services have not been as forthcoming as the market participants initially expected and customer service has been below expectations, some providers are in-sourcing their data services operations. 'Companies have indicated that it is not always possible to justify the acquisition of a completely new system (through outsourcing) and as a result, they are often required to integrate new components with legacy equipment, posing issues in terms of interoperability,' explains the analyst. 'While strong inroads have been made by vendors to ensure this is possible, there still remains room for improvement to provide seamless integration and interoperability between new and existing systems.'
Business data services have become so mission-critical that companies are prioritising on true manageable total cost of ownership, rather than merely on return on investment (ROI) from business data services investment. Thus, service providers should focus more 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,' concludes the analyst.
Application Sectors
Expert Frost & Sullivan analysts thoroughly examine the following application sectors in this research:
- Software as a service (SaaS)
- Data storage and management
- Business continuity/disaster recovery
- Internet/broadband access/voice over Internet protocol (VoIP)
- Hosted IP
- Managed security services
This Frost & Sullivan research service titled South African Client Requirements for Outsourced Business Data Services provides an overview of the current status of the South African outsourced business data services market, including the market size, competitive environment and the key developments in service design and offerings. It identifies the key practices and achievements of selected market participants, and analyses the main criteria and requirements by companies that are opting for outsourced business data services. This research service also highlights the main investment areas by end users in business data services in the long term, and provides recommendations to outsourced business data services providers and companies looking to capitalise on the current and future market opportunity. In this research, Frost & Sullivan's expert analysts thoroughly examine the following applications: software as a service (SaaS), data storage and management, business continuity/disaster recovery, Internet/broadband access/voice over Internet protocol (VoIP), hosted IP and managed security services.
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