By Dan Berthiaume
Eleven cities from the Middle East and Africa (MENA) region were included in the Tholons 2012 Top 100 Outsourcing Destinations Report. As explained by Tholons President for Research Manuel Ravago, some of the most notable city-related BPO developments in MENA occurred in Dubai, United Arab Emirates (UAE) and Nairobi, Kenya.
Dubai Delivers BPO Promise
Despite actually dropping spot in the Top 100 list, from 93 in 2011 to 94 in 2012, positive developments in Dubai’s outsourcing sector during 2011 included two major locators establishing delivery centers in the Dubai Outsource Zone (DOZ). “Intelenet put up a 200-seat facility aiming to provide end-to-end onshore services to clients in the telecommunications and BFSI (banking, financial services and insurance) sectors,” says Ravago. “Genpact also established an 80-seat facility providing BPO services such as claims processing, customer service, collections, and treasury operations, among others, targeted to the regional MENA market. Genpact targets to grow the delivery center to 500 persons in the next three years.”
According to Ravago, the DOZ has cemented Dubai’s reputation as a gateway to the MENA region as more locators continue to establish themselves and explore outsourcing opportunities in the UAE.
Nairobi Comes on Strong
Nairobi, Kenya enters the Tholons 2012 Top 100 Outsourcing Destinations Report this year at 97th place. “Since the implementation of Kenya Vision 2030 (an economic development program aimed at making Kenya a middle-class country by 2030), and its mandate to solidify country efforts in the IT-BPO space, notable strides have been seen in strengthening the industry ecosystem,” explains Ravago. “Such positive developments have included improvements in infrastructure, human capital development, and marketing & promotions initiatives for the country’s ITeS (information technology enterprise systems) sector.”
Most MENA Top 100 Cities Show Negative Movement
Excluding Nairobi, which was a new entrant on the Top 100 Outsourcing Destinations in 2012, most of the MENA cities which made the list dropped in their standings compared to last year. Six of the 10 declined in their rankings, most notably Cairo, Egypt, which fell 35 spots from #49 to #84. The biggest gainers were both in South Africa. Cape Town jumped two spots from #73 to #71, while Johannesburg, which is the highest-ranked MENA city, also rose two spots from #26 to #24.
Cairo and Alexandria in Egypt, as well as Istanbul in Turkey, underwent the three largest drops on the top 100 list this year. “This is attributed to the highly unstable and risky political landscape stalling business investments and expansion efforts by service providers,” comments Ravago. “While recent developments point toward a slightly better picture for these cities in the coming year, companies will remain cautious until concrete changes are made in the political landscape. To compound matters, these destinations will face a challenging road to recovery as the list of competing and emerging outsourcing destinations continue to expand across other global regions. Service providers are not compelled to wait and cannot wait for the Middle East and Africa region to sort its troubles out. They will simply move on to the next best (and safer) service delivery destination.”
MENA as a Whole Poised for Outsourcing Growth
Looking more broadly at MENA’s BPO potential, Ravago points out that the Dubai Outsource Zone estimates that IT-BPO revenue for the MENA region will experience an 8% CAGR (compound annual growth rate) for the period 2009-2016, reaching $2.69 billionUSD by 2016. “A majority of service providers will be focusing on service lines such as contact centers and low-end BPO targeting clients primarily in the Western European region,” he states. “Contact support services and low-end back office processes will remain as the two lower hanging fruits for the region’s service outsourcing future.”