Outsourcing IT will increase as firms attempt to cut cost amid
recession.
The new US administration will spread
offshoring destinations wider with Egypt likely to become an
important centre.
According to the Egypt-based
Information Technology Industry Development Agency (ITIDA), US
companies will increasingly look to Egypt as a destination for
outsourced IT services.
It said Barrack Obama's government will play an important role
in encouraging firms to take a global outlook to outsourcing.
Hazem Abdelazim, CEO at ITIDA, said IBM, Oracle, Orange Business
Services, Satyam, SQS and Vodafone are working with the ITIDA to
establish outsourcing operations in Egypt.
"We think that by the end of 2009 more than 20 Fortune500
companies will have key technology outsourcing bases in Egypt,
which will become a new frontier for technology innovation," said
Abdelazim.
Of all the countries in the Middle East, Egypt has the strongest
position in the outsourcing market. It possesses a well educated
workforce with strong multilingual capabilities, which makes it
attractive to European companies.
However, Egypt faces hurdles, including outdated communications
and transportation infrastructure, and the perception especially in
the United States that it is a risky place to do work."
Phil Morris, managing director at sourcing consultancy
Equaterra, says Egypt has all the ingredients for a good offshore
location for IT outsourcing. "I do not see a lot of demand at the
moment. But if Egypt can sort out some security issues related to
the country and the North African reason there is no reason why it
should not become an outsourcing centre."
In July the Yankee group asked if the Middle East could become
an outsourcing hub in a report entitled
"Can Middle Eastern Countries Fulfil the Eastern Promise?"