CAIRO: Worldwide demand for outsourcing is tilting towards Egypt as Europe now spends more on outsourcing than North America. According to Denise D’Elia, a Vodafone representative, outsourcing as an industry was valued at $13 billion last year.
Egypt has the third-largest talent pool in the EMEA region. This is largely due to the country’s rich pool of young talent — 50 percent of the population is under 25.
Although this is a positive development, for Egypt to play a major outsourcing role worldwide, it needs to build its capacity in several areas, D’Elia said.
Moreover, a provider must ensure that it is a reliable supplier and provides certification. Reducing “churn” — an industry term for lowering the rate of customer loss — is also critical.
D’Elia also highlighted the importance of education, which in Egypt is an area with promise. Indeed, the representative indicated that Egypt pumps out 330,000 university graduates per year — the third largest in the region — which will provide a steady flow of job seekers to the sector.
She noted that firms such as Vodafone, which have substantial outsourcing operations in the country, seek young graduates with specializations in engineering, commerce, and industry.
As it so happens, Egypt currently has a significant number of students whose studies focus on these three areas.
Furthermore, as an outsourcing center for Europe, D’Elia emphasized the importance for Egypt to maintain the population’s strong European language skills.
She said that it is the only country in the world that boasts an aptitude in various European languages — including some less widely-known languages, such as Polish — which thereby give Egypt a competitive edge.
A key area that must remain a focus is controlling cost, she said. According to D’Elia, firms are looking for increased revenue per customer, and this is an area where off-shoring can play a role.
However, in terms of cost, Egypt performs well in relation to other outsourcing destinations; Egypt even performs well in comparison to India and the Philippines, which are currently the two top choices for outsourcing worldwide.
D’Elia stated that cost in Egypt is competitive from both a personnel and non-personnel perspective (which includes infrastructure), according to data gathered by ITIDA and various consultancy firms.
She highlighted the efforts taken by the government to drive the sector, noting reforms in the areas of taxation and customs simplification. In addition, the financial sector has gradually become more privatized, and legislative and institutional frameworks fostered through “one-stop shops” have been established. Many of these legislative and institutional frameworks have even been implemented within 72 hours, which is quite faster than in previous years.
In terms of infrastructure, strides have also been made.
Smart Village was initially established to serve as a concentration of businesses specializing in information technology, yet due to its strong success it quickly became a headquarters for a variety of multi-national corporations.
Following its example, the new IT Maadi Park will be ready for operation in 2012. It is slated to house approximately 300,000 employees in over 40 buildings.
Last year, Egypt was ranked 13th in the field of global service delivery, according to an AT Kearny survey. Thanks to governmental efforts and the positive market dynamics already inherent to Egypt, the country was ranked sixth this year.
“Many countries would like to be in that position,” D’Elia said.