By Stephan Fricke, CEO & Head of Advisory Board at German Outsourcing Association and German Process Automation Association
Deciding for a location for shared services or to source IT and business process services from is not a trivial undertaking. The choice of the destination plays an important part in the success of a shared service organization or buyer – service provider business relation.
Looking at traditional location for Shared Services and BPO, Egypt enjoys a unique blend of qualities, putting it in the same ranks as Bucharest (RO), Budapest (HU), Krakow (PL), Prague (CZ) and Warsaw (PL).
The one aspect that sets Egypt apart from other nearshore destinations in Europe, as well as on a global comparison, is the possibility to implement service centers on a meaningful scale, like the Philippines and India.
This provides especially for European businesses that are looking to expand their SSC or outsourcing operations / contracts great opportunities in a reasonable proximity and even in a similar time zone to facilitate productive business interactions.
From Rapid Growth to Maturity
Since the early 2000’s, the government has opened up the economy and the Egyptian service industry has gone through rapid growth, establishing itself as a reliable and much needed partner not only for European but also US, African and Middle East markets.
Currently, the ICT sector in Egypt is the fastest growing sector and largest contributor to GDP growth. IDC projects that the sector’s exports is forecast to grow from $3.26 Billion in 2017 to $4.7 Billion in 2020 and that the outsourcing industry’s workforce will reach 240,000 FTEs by 2020. See Graphic 1.
According to Frost & Sullivan, Egypt’s BPO market is experiencing a shift in its services portfolio as providers move from multilingual contact centre services to high-value niche services, such as product development and R&D.
Moreover, Everest Group, reported that the unique geographical position of Egypt together with its very attractive value proposition puts Egypt on the track to become a major hub for business operations in EMEA.
The talent pool is one of the corner stones of Egypt’s very unique position among the global BSS destinations.
It is the aspect that provides organizations that operate ITC/BSS centers in Bratislava, Bucharest, Budapest and other established SSC locations in Europe the opportunity to scale further.
With about 500,000 annual graduates from over 50 universities and 100 institutes the Egyptian ITC and BSS industry offers a unique perspective for larger operations, in proximity to the European
Every year, about 220,000 students in business process services related fields and about 50,000 students in IT-related fields graduate, ready to deliver advanced processes and knowledge services in over 20 languages across more than 100 countries.
With these numbers, Egypt is positioned among Poland and the Philippines, traditionally strong sourcing destinations. See Graphic 2.
While UK and France are the better examples here, as the graduates with English and French language knowledge are the highest in number, German graduate numbers are still significant, especially compared with other sourcing destinations in CEE and the growing demand and costs.
Read this and other insights on the conditions and opportunities of co-operating with Egypt based technology and business process partners and see who to contact locally with questions and support at the Outsourcing Destination Guide Egypt 2.0: https://www.outsourcing-destinations.org/outsourcing-guide-egypt/ (available as free download).