Offshoring to South Africa – a beneficial engagement

There are several benefits that South Africa can offer over other offshore destinations or to organisations looking to offshore from the United States, Europe and Australia.

One of the main benefits is the financial gain. Typically, offshore locations such as South Africa, India and the Philippines have a lower cost of living than the United States, European and Australian markets and therefore, development resources are often cheaper in those countries. Obviously, cost-saving at the expense of quality is not recommended and this is the critical point.

Whether an organisation outsources software development to a local provider or an offshore provider, it still has to ensure those with whom it is dealing are capable of the task. Offshoring to a highly competent, professional software development company with a proven track record of delivery, and a team of developers who are highly qualified and experienced is the only way that an organisation can achieve the financial benefit associated with offshoring without sacrificing quality.

In most cases, to be successful, the software development process needs to be iterative with high levels of communication, trust and collaboration between a client and the provider. Thus the two major areas of concern when offshoring are communication and trust.

Although tools such as Slack, Skype and Google Hangouts have made global communication much easier, there can still be barriers around language and culture that hinder the success of a project. Working across different time zones and perhaps even to different working hours can exacerbate these problems.

In terms of trust, if a company can physically see its outsourced development team and can work directly with them, trust is built up quicker and collaboration becomes easier. Obviously, this is more difficult in an offshore model but there are measures an organisation can take to mitigate this and develop trust. These include talking to the development team members regularly and meeting with them in person before the project starts. Starting small is a good tactic – if the software company uses an agile approach, the engagement can be ended relatively quickly if that becomes necessary. Exploring references around how a company’s software teams operate is also critical to building trust.

While there are many companies across the world to choose from, there are many advantages to utilising the world-class software developers and software development companies in South Africa.

On any project, cost is important and although South Africa’s development resources are generally at a lower cost than others, this cost saving does not result in a lower level of service and output quality. While South African software development may be more expensive than that from India and other parts of Asia, there are a number of factors that still make it a stronger proposition in terms of the ability to deliver quality.

The business language in South Africa is English and thus communication problems associated with offshoring software development elsewhere do not apply. While in some countries companies often have to shield their developers from clients because of the language barrier, many South African software companies can have integrated technical and account management teams, where the whole team has strong enough business communications skills to deal with the client personally and obtain project information directly.

The South African business culture is also very Westernised in that it is similar to that found in the United States, the United Kingdom or Australia. Proof of this lies in companies such as Entelect (www.entelect.co.za) whose offshore customers have all commented on the company’s compatibility with their own work environments and cultures, as well as on the company’s professionalism and ability to deliver complex technical solutions at a relatively low cost.

South Africans are resourceful and entrepreneurial, and South African developers generally thrive on solving business problems rather than producing code for the sake of it. They are usually willing to give input and challenge thinking and do not need detailed instructions to complete simple tasks. Generally, they are capable of communicating, showing initiative and taking responsibility. These are common issues associated with outsourcing to India (the most common offshore software development destination). A quick Google search on the topic indicates that there are some fundamental cultural differences that impede quality of service in Indian offshoring, primarily around developers there not showing initiative as a result of the country’s more hierarchical and instructional culture. A by-product of this is lower attrition rates and better retention of knowledge.

South Africa has a relatively central time-zone (GMT+2) and therefore has some, if not most, of the work day overlapping with foreign markets. It also directly shares a working day with Western Europe. This means that communication delays are less impactful. The country also has a solid legal system that respects privacy and intellectual property rights.

With all these advantages, one would assume offshoring to South African software development companies is common practice. However, South Africa is not currently seen as the preferred software development destination. This may largely be because people outside of the country do not know that there is a great deal of software engineering talent in South Africa. An assumption is also made that in South Africa, and Africa in general, there is poor ICT infrastructure, which is no longer true.

In certain other areas, there is a ‘tech bubble’ that has resulted in a vast number of people flooding the market as software developers and they are not qualified or trained well enough to develop software. Although South Africa does have a small talent pool, this is not necessarily a bad thing. In this case, a small market means high levels of specialisation and dedication to the craft. South African software developers usually have to be very good at what they do, to stay in the market.

A large part of why there is a skills shortage in South Africa is down to the country’s history and demographics. However, the number of people enrolling in software-related courses at South African universities is increasing each year. There are also several local private-sector companies that are investing a lot of time, effort and money into further widening this pipeline through bursaries, scholarships and raising awareness around the industry.

There are many South African success stories and possibly the most notable example is that of software developer Mark Shuttleworth. Shuttleworth founded Thawte (one of the largest certificate authorities on the Internet) and Ubuntu (an open-source operating system). Another success story is Amazon Web Services’ Elastic Compute Cloud (EC2), which a team in South Africa under the leadership of Chris Pinkham and Chris Brown built. Sites such as Reddit, Foursquare, Pinterest and Netflix all run on this technology. Amazon Web Services Q3 2015 revenue is listed as US$2.1 billion, and Amazon still retains a sizeable development team in South Africa.

Lesser-known success stories include WooThemes (a Wordpress toolkit) that turns over millions of dollars in revenue annually and Clicks2Customers, which is a digital marketing organisation based in Cape Town. It boasts Vinny Lingham, who is now CEO of Yola Inc., as its founder.

South Africa has also developed a number of technological enhancements over the years, such as the CT/CAT scan, the world’s first digital laser, the full-body X-ray scanner, the speed gun used in sports (including cricket and tennis), APS therapy systems and computerised ticketing – all of which have significant software development components to them.

While there may be a reluctance to invest in South Africa, it should certainly not be as a result of a lack of technical ability, communication barriers or cultural differences. The success stories speak volumes in highlighting the immense talent found in the country’s software development companies.