TOP executives from Fortune 500 companies are gathering this week in New York to discuss how to manage one of the world’s fastest growing industries, business process outsourcing—colloquially known as BPO—and one of the big surprises is likely to be the entrance of a new player in the global $2.1 trillion industry, the United Arab Emirates.
The UAE’s entry into the field is particularly—and pleasantly—surprising because some of its neighbours, such as India, Pakistan, Egypt and Sri Lanka, are among the world’s biggest providers of BPO services.
India, for example, commands nearly 70 per cent of the international BPO industry. Potentially, getting more into the BPO represents not only an enhance revenue stream for the UAE, it also plugs its “knowledge economy” sector into the global mainstream.
Typically, large corporations outsource back-office operations—such as record maintenance, or legal documentation—to third parties in order to save on in-house staff; when such outsourcing is assigned to companies in foreign countries, it’s called off-shore outsourcing.
Because many of the world’s largest corporations have outposts in the Gulf, and, in particular, Dubai and Abu Dhabi, back-office work generated in these satellites is outsourced to countries such as India, and even as far away as China, Mauritius and the Philippines. But now a number of canny entrepreneurs based in the UAE are recognising that they can tap into this income stream.
After all, the UAE has one of the highest literacy rates in the world, and, in addition to nationals, many techno-savvy expatriates are available to expand the BPO industry.
The industry is only likely to grow as more and more corporations—especially ones based in Western economies that have been severely affected by the global financial crisis of the last two years—trim their internal budgets.
“It’s far cheaper to outsource back office work to developing countries,” says Babulal Jain, a founding president of a three-year-old entity called the World BPO Forum, which is organising the New York gathering this week.
Now the Forum hopes to set up a chapter in the UAE, not the least because of the nascent BPO industry here. Are Indian BPO companies worried about the UAE’s entry into the BPO? Not the least, says Jain. That’s because the overall global industry is expanding that new players such as the UAE would be assets.
Moreover, because of the emphasis put on developing the knowledge economy by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice President and President of the UAE, and Ruler of Dubai, on encouraging entrepreneurship—especially in leading-edge industries—the development of the BPO sector would certainly receive strong governmental support.
And it is a special kind of revenue source, particularly because no new investment would be needed to expand existing call centers and back-office facilities.
So it isn’t as though this week’s global gathering in New York will create some sort of smashing breakthrough for the UAE’s BPO industry, which is still in its infancy. But the UAE now will certainly be considered a player to be reckoned with.
Source:http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=/data/opinion/2010/July/opinion_July179.xml§ion=opinion
