Africa & Middle East

Egypt’s outsourcing ambitions takes a hit

Egypt’s recent unrest that finally paved way for the resignation of Prime Minister Hosni Mubarak can easily undo its recent excellent efforts to attract global companies to set up outsourcing facilities in the country. In recent times, Egypt has reaped the benefits of its outsourcing strategy shaped up by its dynamic enabler agency - Information Technology Industry Development Agency (ITIDA).

Vodafone New Zealand is one organisation that has had to rethink its call centre operations following the outbreak of violence in Egypt. Vodafone has strengthened its call centre operations in Auckland at the height of the crisis.

Ovum lead analyst Peter Ryan said the largest question remained whether Egypt could recover its credentials, regardless of a change in government.

"Many service providers, as well as clients, are re-evaluating whether Egypt is still the right location for outsourcing deployments."

During the crisis, Microsoft said in a written response to a query that it "is constantly assessing the impact of the unrest and Internet connection issues on our properties and services. What limited service the company as a whole provides to and through the region, mainly call-centre service, has been largely distributed to other locations”.

Another tech firm with a presence in the country’s designated Smart Villages is Hewlett-Packard, which has asked its employees to stay at home during the crisis.

Interestingly, A.T. Kearney released its annual Global Services Location Index in early February naming Egypt the fourth most attractive location in the world for offshore services outsourcing – up two spots from its sixth-place ranking in 2010.

"We did our research before the unrest began," explains Johan Gott, manager of the A.T. Kearney's Global Services Location Index.

"Emerging markets in general tend to be more risky than developed markets. You had the Mumbai attacks (of 2008) that at the time created uncertainty around India as a offshoring destination. In Thailand, there were the riots around Bangkok last year. These things happen. We don't want to minimise the impact in Egypt. Short term, it's a very serious issue. Long term, it's too soon t