After opening the global technology company’s first office in Cape Town, HGS Whole-time Director Partha DeSarkar spoke to Opportunity magazine from New York. He says that the South African expansion is part of the HGS “follow the sun” strategy which allows it to service clients in multiple time zones.
Between October and December 2024, 6 290 net new international jobs were created in South Africa’s Global Business Services (GBS) sector. Export revenue in that period totalled R1.8-billion.
These impressive statistics appeared in the BPESA GBS Sector Job Creation Report, a quarterly publication. Business Process Enabling South Africa (BPESA) is the national trade body and industry association, covering the Global Business Services (GBS) sector which includes Customer Experience (CX), Business Process Outsourcing (BPO), Digital, Professional and Shared Services.
Six years have delivered 150 000 new GBS jobs in South Africa, 80 000 of which came in the last four years. GBS is a newish term covering the broader sector described above, but most of the new jobs have come in BPO, which mostly covers call centres and back-office services.
The fact that a large international firm such as HGS has chosen to open a branch in Cape Town confirms the growth trend and adds impetus to it.
Six years have delivered 150 000 new GBS jobs in South Africa, 80 000 of which came in the last four years.
With 18 000 employees in 10 countries, the company runs 33 delivery centres and earned revenue in 2023/24 of $614.4-million. It has research laboratories at two sites in the US, Bangalore in India and in the Philippines, which is the location of the company’s largest operation. HGS is part of the Hinduja Group.
Why South Africa?
South Africa attracted HGS for a number of reasons. Says HGS Whole-time Director Partha DeSarkar, “South Africa is in a unique space.” He notes the diversity of languages, and its “interesting” time zone. Opening an office in South Africa chimes with HGS’s “follow the sun” strategy.
As DeSarkar explains, “In the Far East we have the Philippines and India, then comes South Africa so as the sun rises in different time zones of the world, so we are able to offer clients the ability to have conversations in their time zone. South Africa neatly fits into that.”
In addition to that, the country has a pool of “very talented” young people who are well educated, can speak a variety of languages and are good conversationalists, a key skill in the outsourcing world.
The South African outsourcing sector is going to grow exponentially.
The broader attractions of South Africa helped the investment proposition. “Cape Town and South Africa is a place which excites many of our clients in the UK, US and Canada because it is such a well-known tourist destination as well. People are eager and excited to come,” notes DeSarkar, who was on hand to officially open the new Woodstock facility in March 2025.
The CEO believes that the South African outsourcing sector “is going to grow exponentially”. Recent interest from American companies represents “just the tip of the iceberg” after the country was for many years seen as being a UK-specific destination. Once more clients from North America “taste the success”, DeSarkar predicts that it will drive further growth.
The sector could soon become the biggest employer of young people entering the workforce in South Africa. The employment potential could triple its current size by 2030 because, says DeSarkar, “South Africa has just cracked the market.”
The Cape Town facility is currently offering call-centre and back-office services. HGS is exploring digital and software engineering options but that will depend on the “digital talent” being available, something that is not as abundant in South Africa as it is in India or the Philippines. DeSarkar says the company is, “Open to everything so long as that skill is available in South Africa.”
HGS is making its own contribution to skills development by partnering with a digital-skills training organisation and a company called Shadow Careers, which runs training courses at the HGS facility in Woodstock. The Shadow Careers curriculum runs for three months and is focused on preparing people for employment.
DeSarkar notes that the employment impact of an office such as the HGS facility in Woodstock goes beyond the direct employment of employees of the firm. “If you look at the supply chain, you need drivers to transport people and to pick up people from central points because some of the working hours include night shifts. You also need people who provide housekeeping services, food and canteen services, security people and so on,” he says. The people-oriented nature of the sector creates a complete supply chain that “opens up as these industries grow”.
HGS is “well on our way” to have 300 staff in its Woodstock office by the end of 2025 and to scale that up to 400 “if things fall in place”. Beyond that, any expansion would probably mean that a new site would have to be found.
Digital solutions for a digital world
According to DeSarkar, the emergence of large-language models and ChatGPT, Cloud and artificial intelligence-based models has “opened up a new world of possibilities for all of us who are in the professional services field”.
HGS has a relative advantage because the company can be more adaptable than businesses with “hundreds and thousands of people”. With the really big companies being too big to move quickly, the new and disruptive technology has created a level playing field, with “smaller, more flexible players like us” potentially having an edge, DeSarkar says.
With the deconstruction of existing business models, HGS is building its own disruptive digital-transformation strategy. “This technology is so new and so exciting that we are trying to use it in all kinds of ways,” DeSarkar notes.
One way of doing that was to acquire some “small boutique technology firms which came with technological capabilities”. That has been blended with HGS’s traditional business-process-outsourcing strategy with the result that the company now has a comprehensive suite of AI solutions, analytic solutions and Cloud solutions which it is taking to market.
DeSarkar is excited by the possibilities: “When you bring in generative AI it opens up a whole new realm of what we can do with this technology.”
A client advisory board curates all of the company’s offerings and advises on possible paths for the innovation to take. Some projects are co-created with other companies using a “sandbox” approach, before pilots are deployed in live environments. Training of the company’s entire workforce is underway so that the technology can be rolled out across all markets.
When you bring in generative AI it opens up a whole new realm of what we can do with this technology.
HGS is developing its AI products in multiple locations. There are AI labs in New York, Austin (Texas, US), Bangalore and in the Philippines. The American labs tend to drive the pilot projects. Once the wireframe is designed, then the final coding of the development is often completed in the Philippines or India.
“The good thing is we are seeing success,” reports DeSarkar. “The process we have followed is proving to be quite successful.”
In terms of which sectors are the fastest adopters of the new technologies, DeSarkar makes that point that banking has always been in the front line of adapting technology to its needs. He says it is “an industry that has evolved and become almost unrecognisable from those days when you had to go to a bank teller with your cheque book and withdraw cash”. With banking now completely transformed, insurance is following the same path of change.
DeSarkar sees “cross-verticals” where fast-growing and disruptive technology is playing a big role. He notes, “That could be in travel, technology, services, e-commerce or retail so it is difficult to put them all together in one industry. They are all using technology to disrupt like Amazon did to JC Penny and there are several examples of that in the UK.”
For DeSarkar, the three broad industry categories where adaption to change is happening most rapidly are customer-packaged-goods (CPG)/retail, financial services and technology/media/telecoms.
AI and customers
HGS Whole-time Director Partha DeSarkar outlines what AI means for customers.
How are you integrating AI and automation to enhance the customer experience?
It starts with automation for backroom processes, whether it is imaging or using conversational AI to understand written text or the spoken word. Imaging (using AI to recognise images) allows for the automation of some backend processes whereas the text and spoken-word technology creates workflows which allow bots to respond to emails and chats. All of that is now possible through technology. It’s been the most wonderful development in the last three years.
How is Agent X transforming contact centres?
We have invested between $5-million and $6-million in our AI-driven platform, which has been developed over the past three years. It encompasses all of the functionalities mentioned: image-recognition, voice-recognition, written correspondence and voice conversations.
All of those features have been built in on top of models like Cloud and ChatGPT. We have written hooks which use the functionalities of foundational models in a very seamless manner. If you start speaking to our bot, you won’t figure out that you are not speaking to a human being. There is no lag and there is now a fair amount of ability to understand humour and sarcasm. Sarcasm is not easy to teach. I won’t claim that we’ve cracked the sarcasm element, but the bot can have a good conversation with you. So long as you are not using sarcasm, I think you will be okay.
Please give a practical example of an enhanced customer experience?
If you call a bank, the first thing that they will ask is for your identifier information, what’s your date of birth, what’s your mother’s name, what’s your social security number? All of those are processes through which they identify you.
Now we have a process through which we can do voice authentication. This means I will not ask you all those questions. The first time we speak, I will ask you to speak and that will get recorded in a sound signature. Once that is read it is processed and then it creates a voice signature. Next time when you call me, I will match the way you speak to your voice signature. It’s a productivity enhancer and I believe that it also takes some of the boredom away from the call.
Find out more: https://hgs.cx/locations/south-africa/
