India to outsource into Egypt!
posted in Outsourcing News and Top Outsourcing deals |Source: http://web20.telecomtv.com/pages/?newsid=43000&id=e9381817-0593-417a-8639-c4c53e2a2a10&view=news
IT outsourcing capital India is now re-exporting its services outside the nation, particularly into Egypt. The new phenomenon comes as high-tech spending by both governments and the private sector has exceeded US$1.7 trillion in 2007causing IT services’ demand to exceed the supply of qualified labor in the country’s human resources market, said Business Today Egypt.
India has been dominating international IT outsourcing with a 2/3 share of the industry as India-based companies have been seducing call centers and IT departments away from the West. However, despite local successes, India is now facing talent deficit, forcing Indian IT companies to buy companies in America, Europe and Asia to support their extended operations and cater to more than half of the globe’s high-tech needs.
According to a study by A.T. Kearney, a global management consulting firm, which looked at 50 countries, Egypt has been ranked the thirteenth most attractive destination to set up an offshore service. The study was based on the evaluation of three main factors: financial structure, availability of skilled workers and overall business environment.
“In search of good, quality manpower, we found that Egypt has a large population with a high number of graduates with good computer skills,” said Virender Aggarwal, Satyam’s director and senior vice president for Asia, the Middle East and Africa. “[Egypt] can also serve as a good market for Europe, Africa and the Middle East because of the multilingual capabilities of the Egyptians. Many Egyptians speak French as well as other languages, like German.”
Moreover, the Egyptian government hopes that to transform Egypt’s image in the international IT market and market the country as a popular destination for IT outsourcing. The administration of Prime Minister Ahmed Nazif commitment in developing the ICT sector is said to be a serious one, having hired an international public relations firm to help sharpen its image.
“In terms of having a competitive edge, the main focus will be on both IT service outsourcing and business process outsourcing,” Abdelazim says. “We are implementing the strategy through three main pillars: one is attracting multinational [companies]; two is developing the capacity of the local Egyptian companies; and three is making the talent pool available and ready to serve the first two pillars,” Abdelazim said.
In addition, major companies like Microsoft, Oracle, ALCATEL, Ericsson, Vodafone and Teleperformance have all so far established operations in Egypt. Even Indian IT giants Wipro and Satyam have also come to Egypt.
“We gave them incentives like rental and training subsidies between 85 per cent and 100 per cent. The telecom infrastructures as well as furniture are also subsidized,” Abdelazim said.
There has also been some speculation that Indian companies, with their low-cost services, expertise and economies of scale, will end up dominating the local and regional markets. However, competition is not necessarily over local customers.
In fact, local companies encourage international players to utilise and develop the Egyptian market, which is considered both small and underdeveloped. “It is a difficult market even for the Egyptian players, as there is an [overall] lack of ‘e- readiness’, technology use, and e-literacy,” Amin said. “If the Indian companies are able to come to the market and make it profitable, this will benefit everybody, and raise the market’s level of maturity.”
