Could Egypt violence could leave its and other countries' offshore IT reputations in ruins?

| 1 Comment
| More

The recent events in Egypt have dominated the news over the last couple of weeks.

Before that we had the pro democracy protests in Tunisia.

It seems the globalisation of IT delivery makes many world events relevant today.

Egypt has been promoting itself in recent years as an alternative to traditional offshore IT locations such as Brazil, Russia, India and China, collectively known as the BRIC countries.

The Egypt Information Technology Industry Development Agency (EITIDA) even commissioned the London School of Economics (LSE) to carry out a survey of the best places to offshore IT outside the BRIC countries.

The 14 countries looked at were: Belarus, Bulgaria, Costa Rica, Czech Republic, Egypt, Mexico, Morocco, Philippines, Poland, Romania, Slovakia, Tunisia, Vietnam and Venezuela.

Egypt did pretty well.

But now we here that Wipro and Infosys have evacuated staff from Egypt and foreigners have been forced to leave.

Wipro said: "... our expatriate employees have come back (to India). With the curfew in Egypt continuing, we are urging our local employees to leave office early to ensure their safety. The BCP processes are also in place wherever required. We hope the situation is resolved soon so business can continue peacefully."

Robert Morgan, director at sourcing broker Burnt-Oak Partners, says political insecurity is rarely considered when businesses consider offshoring work.

The troubles in Egypt, which is seen as a good place to offshore, could change this.

"Many of the offshore locations offer helpdesk services which is at the forefront for a business. Workloads can be moved around if there is a problem in one place but it needs to be in a disaster recovery plan."

He says smaller offshore destinations such as Egypt, with a small number of places providing services will find it more difficult to shift workloads.

He says businesses largely ignore political considerations when agreeing offshore contracts but this should change. The political unrest in Egypt could happen in many countries, he says.

 

1 Comment

Outsourcing has become a very popular alternative for a number of very valid reasons. Outsourcing initially emerged as a way for companies to cut costs by having processes such as manufacturing and assembly done in overseas locations where costs were much lower. Lower wages and operating costs both contributed to these reduced costs.

Leave a comment

Have you entered our awards yet?

About this Entry

This page contains a single entry by Karl Flinders published on February 9, 2011 11:23 AM.

IT services ready for growth, growth and growth. Day one Nasscom. was the previous entry in this blog.

Cloud dominates Indian shindig. Day two Nasscom. is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

 

-- Advertisement --