| 29 Apr 2010 |
|
Outsourcing firms boot up
- Text size
Outsourcing companies in the Gulf are moving up the value chain from providing mere back-office operations to IT and business process services.
Traditionally outsourcing companies have provided service for back-office operations. But countries such as the UAE, Egypt, Jordan and Morocco have been making efforts to build up infrastructure, people and funds to grow the sector. And industry experts believe the outsourcing industry has been growing at 20 per cent annually in the Middle East.
Amin Khaireldin, Strategy Advisor and Board Member at Egypt-based Information Technology Industry Development Agency (Itida)Information Technology Industry Development Agency (Itida)
, said: "In Egypt we put resources in a business park-like Smart Village. From the premises services such as financial analytics are conducted by 200 analysts for a Dubai-based company. Technical as well as packaged implementation services (PIS) are the focus."
Business process outsourcing (BPO) is another area gaining relevance in the region. BPO involves the contracting of operations and responsibilities of specific business functions (or processes) to a third-party service provider. "Gulf-based companies are now considering taking BPO services from outsourcing firms in the Gulf. And Itida has been making investments towards acquiring international standards in this segment," said Khaireldin.
IT service companies such as Patni Computer Services (PCS) have noticed this change in this region. Derek Kemp, President (Emea), PCS, said: "The Gulf economies have been building resources for a three-tier model. This is mainly onshore, nearshore and offshore. They are trying to inject the culture for IT services. However, not all countries in the GCC are human intensive as the scale is not available. But the growth potential is immense, for instance, a country like Egypt has been able to grow in its GDP because of outsourcing. The opportunities from oil, gas, telecom and financial services are immense."
According to Kemp, long-term contracts in outsourcing have started happening, which was not the case earlier. "Traditionally the market in the Gulf depended on buying rather than a service model. Therefore, now even companies based in the Gulf are looking at working on an outsourced model. This attitude change will raise the profile of the region."
He also explained that although the market size is small the ICT (Information and computing technology) spend in the region would help other sectors grow. "The ICT spend in the region is the same as in the UK. Markets are flat in the UK currently and US is starting to pick up while continental Europe has picked up in offshoring."
Khaireldin said the UAE is not human intensive, but it provides high-end financial services. "For low- and mid-level services human capital is essential along with low labour costs and incentives."
Gulf states are looking at upgrading skills of graduates in the BPO and PIS segments. "PIS is expected to hit $3 billion (Dh11bn) by 2020 from the current ?$200 million in the region," Khaireldin said.
By Nancy Sudheer
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Loading ...
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.