The Big Gaint Indian Companies Plan To Outsource

India, one of the most preferred BPO service providers in the world, is now outsourcing software and back office projects Egypt as its vendors. Wipro technologies, a corporation based in India has planned to outsource their domestic work to more populous state in Arab country to leverage lower costs and availability of skilled labor.

Wipro has some top customers like Bharti Airtel,Dena Bank, and Unitech Wireless said that, Egypt is emerging as one of the most attractive location for offshoring due to 10 to 15 percent lower costs , availability of technical skills across different programming language including Windows and Unix.

Anand Sankaran, senior VP and business head, India and Middle East Business, Wipro said that ,the company wants to outsource 20 percent of their work to Egypt. Presently,the company is offshoring jobs from middle east and India to Egypt.

The attractive subsidies of Egypt that create local employment that includes incentives like waiver on training costs and salaries for new recruitment is compelling companies like Wipro to offshore work to the country.

The government is providing different subsidies towards the training programmes of new hires. Wipro is planning to hire 400 new professionals in Egypt within a span of two years. Wipro presently hires 100 professionals at its Cairo centre. Every year almost 30,000 out of 3,30,000 students graduating from Egyptian universities are from computing and engineering background.

For businesses, lower corporate tax rates along with other facilities make Egypt one of the thriving destination to invest. Last year, Egypt attracted FDI worth USD13.2 billion, and by 2010, the country aims to have FDI of around USD10 billion. Hazem Abdulazim, chief executive of the Information Technology Industry Development Agency ITIDA, Egypt said that, country has already reduced taxes from 40 percent to 20 percent and ITIDA does help multinationals with incentives like subsidizing the training of professionals.

At a time when vendors and customers are seeking alternatives to rising costs, outsourcing policies in Egypt will help many companies who want to outsource work. The low wage inflation of Egypt which is 5 percent compared to 10 to 15 percent in other emerging locations and the low currency fluctuation of Egyptian pound compared to US dollar will help to keep the operation costs in the region stable.

Wipro is one of the largest companies in India which has its presence in Egypt, other companies like TCS are also planning to start their operations in Egypt.

According to a research firm Gartner, Indian customers need to look beyond the limits of their geographical boundaries much like their western counterparts.

Gartner predicts that Indian companies will increasingly offshore work and it will a priority on their outsourcing strategies. This will result in outsourcing deals offered by some Indian companies that include high end services like design,architecture and business consultancy.

However, Egypt does not pose as threat to India for being a global service provider. When it comes to IT/ ITes sector, India and Egypt complement each other and utilize their strengths to open new avanues. This will help India to build partnership with the Egyptian companies.