Riding the Indian outsourcing wave

An Egyptian delegation recently visited India to promote Egypt as sub-outsourcing destination. The country is looking to tap the call center and business process outsourcing opportunities that have grown to a phenomenal level in India. Indian outsourcing companies are directing their efforts towards moving up the value chain, establishing global presence and increasing the spectrum of services. Egypt hopes to fill the gap by taking up services which are towards the lower end in the value chain.

As global distances contract further and business is faster, real time outsourcing demands are on the rise. With the concept of near-shoring gaining ground, Egypt is showcasing itself as a viable option for European outsourcing needs. With workforce skill sets that include knowledge of English, French, German, Italian, Spanish, Greek and Portuguese languages, the Indian outsourcing vendors could use this as a new opportunity. The approach of the Egyptian government indicates a categorical shift from competing to co-operating with the Indian outsourcing industry.

 
Showcasing Egypt

The Ministry for Communication and Information Technology (MCIT) is working to provide state-of-the-art national telecommunication and improve Egypt’s global competitiveness. The government is targeting $1.1bn of the global outsourcing market by 2010. AT Kearney has ranked Egypt at 12^th position in the list of top offshore outsourcing destinations.

Some of the other benefits that the country has to offer are a workforce with good IT skills, good telecom facilities and infrastructure comparable to the western countries. Some of the companies that are utilizing services from this country include Cisco, Microsoft, Oracle, Neuf Telecom (France) and General Motors.

Egypt also has the advantage of lower wages as compared to the continuously rising Indian wage rates, which have become a cause for concern. The continuing strength of Indian Rupee has reduced profitability as well. Need for new destinations is continuously on the rise as multi-country model, risk management techniques and proximity to clients’ gain importance.

 
A long way to trudge

The country has had a slow start and is lagging not only the stalwarts in the outsourcing industry but has also been beaten by some other smaller destinations as Morocco and South Africa that have gained a head start over it.

The graduate output of the country is pegged at 250,000 per year and it will be difficult for it to meet the people intensive demands of the call center industry. One of the other factors that will have a huge impact is the political uncertainty.

The idea of sub-outsourcing appears be a novel concept that Egypt has chosen to dwell on. Hitherto, it was only competition with India that other countries have looked at. Dubai Outsourcing Zone did come up with the approach of providing only state-of-the-art infrastructure and an invitation to use it. This is a new opportunity that will allow both countries to work in tandem. While Indian companies rake in the benefits attached to a new destination, without concerns of interference, testing out viability on their own, etc., Egypt gets a direct entry in to the big league of the Indian outsourcing industry.

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