South African companies that want to succeed in the offshore market for software integration and development services should focus on offering scarce, niche skills, and a high quality of service, rather than trying to compete solely on the basis of cost.

John Ziniades, CEO at self-service specialist, Consology, says that Consology’s experience has shown that companies in the US, and particularly in Europe, are keen to tap into SA’s skills base because of the quality of its IT professionals, despite the fact that the country’s IT professionals are more expensive than those from India and other parts of Asia.

“Most developing countries are eager to move aggressively into First World markets for offshore IT development and integration services. Considering the competition that SA faces, local companies need to think carefully about what their unique selling points are,” says Ziniades.

India still leads the pack, although countries such as Poland, Russia, China, the Czech Republic, and Mexico are also all trying to grab a big slice of the revenue that the offshore outsourcing market generates each year. SA skills are expensive compared to those from India and other parts of Asia, so local IT companies should not be trying to compete in the low-value software development market, says Ziniades.

Ziniades points out that companies in Europe and the US looking to outsource strategic development work to offshore suppliers look at many factors besides cost when choosing a supplier. Risk is perhaps the most important factor: whether they feel that the offshore company’s culture, skills and environment will enable it to deliver on complex requirements on time and within budget while delivering a quality solution.

“This is where SA scores highly: we have a stable economy and political environment, solid infrastructure, excellent English language skills, a sound legal system that respects privacy and intellectual property rights, and a business culture similar to First World countries,” says Ziniades. “In addition, we have people skilled in complex and high-value niches of the IT industry, such as high-end integration and consulting.”

SA IT professionals understand the client’s business requirements and have the ability to communicate effectively in terms of the First World's business language – elements that are both critical for success when they will be doing development work in a country thousands of kilometres away from the client.

Indian companies often have to shield their developers from clients because of the language barrier, but SA IT companies tend to have integrated technical and account management teams where all members have strong enough business communications skills to deal with the client and get their technical briefs directly, says Ziniades.

Says Ziniades: “Our offshore clients like our compatibility with their working environments and cultures, and the fact that we are able to deliver on complex integration and development projects at a relatively low cost. Our people can easily fit in with the client’s team, whether they are working from SA or on-site in another country.

“We have focused most of our energy on the European market, because we have found that sharing a time-zone with Europe also gives us an edge against competitors from India.”

Many SA end-user organisations are on the cutting-edge of technology, which means that local IT professionals can offer companies in Europe and the US real-world experience in the latest tools and technologies, says Ziniades. For example, Consology has worked on advanced self-service deployments at customers such as MTN, which is recognised as one of the most advanced self-service deployments in the world, he adds.

SA customers benefit from the exposure that employees of outsourcers have to the latest international best practices and technologies. International exposure offers unique life experience for ambitious people who are hungry for growth and development, notes Ziniades.

ICT World