New locations emerging out of a downturn


Recent reports in the technology press have hinted at the emergence of new IT offshoring locations. Destinations such as Egypt, winner of destination of the year award at the NOA Awards this year, are emerging as important centres of ITO.

Recent talks between the Egypt based Information Technology Industry Development Agency (ITDA) and various big name companies (such as IBM and Oracle and Orange) further bolsters the concept that the outsourcing landscape is changing and both vendors and end users are looking at previously unconsidered locations as potential areas for captives or service centres.

It is interesting to consider that as the financial sector suffers, India starts to loosen its iron grip on the outsourcing world. India, whose main source of outsourcing revenue comes from financial sector BPO, may be keeping a close eye on these emerging locations.

The Philippines and China are hot on the heels of Indian service providers and the emergence of Egypt (as well as South Africa and Brazil) as ITO hot spots will certainly be occupying the minds of influential players in the industry.

I have mentioned in previous blogs that the downturn will not mean a drastic loss of revenue within the outsourcing industry. However I also pointed out that the recession could mean a change in the landscape of the industry. I think we are now seeing this.

Destinations such as Egypt are capitalising on offering arguably the same if not better services, with excellent multi lingual staff and software expertise, at potentially cheaper prices. Also The locality of such destinations means that EU end users may feel more comfortable knowing that there services are within a shorter distance and similar time zone.

As the nature of outsourcing deals change, the location of service providers may become a key factor in securing business, if the end users want closer service centres offering valuable expertise and value for money then I am sure the vendors will oblige.

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