The decision of Stream Global Services to expand its offshore footprint into Egypt validates Ovums longstanding view that this country has a significant role to play in the delivery of customer-facing services to Western end users. However, to attract critical mass similar to that of India and the Philippines, Egypts BPO leaders must emphasize its value to the North American market, which has proven a tough nut to crack.
Egypt remains competitive in price and labor skills
There is no question that Egypt has proven its mettle as a location of choice for offshore contact center outsourcers, most recently Stream Global Services. Its labor pool scalability, language skills, and government support for the sector have been crucial to this development. However, it is important to continue promoting Egypt as a delivery center for North America. To date, Egypt has mainly focused on Western Europe.
Stream Global Services decision to move into Egypt for contact center delivery highlights the significant value that this market has to offer. We have touted the potential benefits of Egypt in a delivery strategy for some time, and believe the countrys fundamentals still serve it well. With a population in excess of 80 million (including a large number of university graduates), Egypts labor pool cannot be ignored in an era in which quality offshore labor is hard to find. Complementing this are the excellent language skills that can be found in Egypt, most notably in Cairo. These advantages have enabled a large number of firms to house pan-European delivery sites in this geography, with agents handling volumes of calls in English, French, Italian, Spanish, and German.
Government support has also been an important part of the development of the CRM outsourcing sector in Egypt. It has come in the form of long-term incentives for suppliers, such as tax breaks, training programs, and the development of wired-up business parks. The results are palpable in terms of Egypts list of global contact center outsourcing tenants, which, in addition to Stream, include Teleperformance, Sykes, and large local players such as Xceed.
Promote Spanish and stability to leverage North American business
Despite our view that the fundamental base exists in Egypt to promote itself as a leading offshore destination, there remains much to be done to lure more contracts that service North American end users, which constitute the majority of offshore business and are likely to do so for the foreseeable future. Most Egyptian offshore contracts service end users in Western Europe and, while this remains a lucrative market, it will be important to promote more US and Canadian investment to ensure revenue diversification as a risk-mitigation strategy. However, to accomplish this, Egypts government and private sector must work together to achieve two important goals.
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