Outsourcing market to hit $479bn by 2016
Dubai, June 6, 2011
The outsourcing industry is embarking on a growth path with global revenues projected to touch $479.3 billion by 2016 from $370 billion at present, according to a report issued by Dubai Outsource Zone (DOZ).
The report, prepared in collaboration with global business research and consulting firm Frost & Sullivan, further revealed that the global outsourcing markets will register a compound annual growth rate (CAGR) of 8.35 per cent, while Mena region is expected to witness a CAGR of eight per cent during the forecast period (2009-2016).
According to the report, the UAE outsourcing market will record a CAGR of 10 per cent during the same period.
Titled ‘Outsourcing Opportunities in the Mena Region’, the release of the report marks the fourth anniversary for Dubai Outsource Zone.
Focusing on the current status and future prospects of the industry at a global, regional and local level, the report points out that the international outsourcing industry has witnessed a major shift in the past five years.
Malek Al Malek, managing director of Dubai Internet City and Dubai Outsource Zone, said: "As DOZ celebrates its fourth anniversary, the growth witnessed by the cluster in such a short time signifies the role it has played in developing the emirate’s outsource industry."
“DOZ offers a blend of benefits including state-of-the-art infrastructure, hi-tech and latest telecommunication experience. It also offers a better lifestyle, reducing workforce attrition and a multicultural personnel base."
Al Malek said DOZ was eyeing the bigger markets such as India and China as an option to complement an organisation’s BPO in markets around the world.
The DOZ-Frost & Sullivan research revealed that both the UAE and the Mena region were considered attractive destinations due to their better quality of life, high levels of international compliance and availability of foreign language professionals.
The industry’s growth trend is also attributed to a change in business practices, largely due to the financial crisis that has encouraged organisations to outsource.
In the Mena region, the UAE is the second largest outsourcing market, after Egypt. Dubai has particularly emerged as a preferred destination due to its prime location offering easy access to the entire Middle East, Africa and Asia.
Lindsay McDonald, consultant, Mena-ICT, Frost & Sullivan, said: "The entire outsourcing industry was based on low cost activities. But now clients are ready to pay a premium if they are assured of high quality services."
"Due to this trend, governments of well-established outsourcing destinations are in the process of re-aligning their outsourcing industry and its development strategies," she noted.
The UAE, she stated, had shown a similar development cycle that is experienced globally in the past by venturing into specialized services such as customer care and management services.
This is a primary reason for DOZ’s success in attracting companies with a business focus on the Middle East, India, Africa, as well as Central and Eastern European nations such as Poland, Russia, Hungary, Czech Republic and Croatia, she added.
DOZ provides a comprehensive purpose-built infrastructure to both captive and non-captive companies looking to set up in the region, control costs and gain efficiencies by leveraging the talents, technology and expertise in the UAE.
DOZ currently hosts a number of companies in diverse sectors such as banking and finance, accounting, IT, payroll processing, engineering, research and development as well as design.
Current companies operating in DOZ include Nokia Siemens Networks, Emirates airline, AXA Insurance, du, Mashreq Bank, Arab Bank, First Data, Cupola, Larsen & Toubro, Infotech Ltd, Al Futtaim Willis, and the Jumeirah Group.-TradeArabia News Service