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More IT to Be Outsourced in Dubai

Dubai : 03 April 2011

As the global recession fades into memory, Dubai’s IT industry is looking to continue with further expansion, although the threat of increasing competition from the surrounding region and further afield needs to be dealt with. The industry is actively seeking to draw in new clients and more investors.

The government has been focusing on IT expansions for a long time, knowing that these developments will help to build a stronger economy based on knowledge. Officials recognize that a sturdy backbone of ICT (or information and communication technology) is vital to the development of a modern economy with healthy diversity.

In Dubai this recognition has resulted in more spending on the IT infrastructure. Continued expansion in the network of fibre optics as well as the push for faster, more reliable Internet services has seen many new segments of technology being developed. Outsourcing is one area in particular that has strong growth potential. Businesses will be in a better, more focused position when they can reliably outsource non-core activities, like data processing and electronic storage. This reduces or eliminates the time spent on this back office work.

Dr Petra Elgass, partner at Management Partners business consulting firm, stated that momentum is growing around the Middle East region reshaping the form of IT management in corporations. Elgass said that consultants are witnessing more initiatives targeted at change in IT and business itself, focusing on centers that share services and encouraging outsourcing. As Management Partners opened a new office in Dubai this March Elgass stated that the initiatives being seen would impact business performances significantly, as long as they are designed and managed with care.

After recognizing this shift back in 2004, Dubai established the Dubai Outsource Zone (or DOZ) in order to benefit from the growth potential seen in this segment. More and more businesses in Dubai and across the UAE are looking at ways to tap into the power of outsourcing, aiming to reach larger cost savings and increase the value of their business. Dubai Internet City (or DIC) issued a report this past January entitled “ICT in the UAE” stating this trend. The DIC partnered with Al Timimi and Co, a regional law firm, on the report.

Since there has been shift in the investments made in IT, businesses are choosing to partner with outsourcing services for mission critical applications and in order to become more efficient in operations, according to the report. In particular, managing director for both the DOZ and the DIC Malek Al Malek noted that the DOZ has seen growth and benefits as the local enterprises swell and shift their IT services investments into outsourcing.

Al Malek added that the patterns of buying in business have shifted as the value in outsourcing is recognized. This is true not just in terms of cost, but when compared to the processes within the business as well, according to Al Malek. He added in an accompanying statement that as more shared services are adopted and customer profiles change, this industry shift has been noted.

Al Malek feels that outsourcing has a strong outlook for the future as more and larger industries are realizing that adopting shared services add to their profits. IT networks have been investing in upgrades to infrastructure in order to keep up with industry standards in their own framework. Regional IT firms, however, have been forced to increase their levels of service in order to meet standards and trigger an evolution in the attitude of consumers.

It appears that those changes have worked based on a report issued in early March by AT Kearney, international management consultants. The Global Services Location Index (or GSLI) reported that the UAE is quickly becoming an ideal location for offshore IT services. Although China, Malaysia and India are still the highest standards in IT support and services, based on the GSLI numbers for back-office support and contact centers the UAE has moved into second place throughout the Middle East and into 15th place globally, quite a significant jump from the 29th place previously held. This upward drive is mainly a result of Dubai growing stronger as a center for outsourcing.

Even so, Dubai will need to battle strong competition in the bid to secure investments and clientele, as other nations within the region – Egypt, Tunisia and Jordan namely – also fell within the top 25 international locations. Also, India and Malaysia have been actively seeking the business of Gulf companies, a key market for Dubai. Dubai should continue to build on the good position it holds within the outsourcing industry and across the wider IT sector thanks to the faster, better services being rolled out to bolster the emirate’s ICT backbone.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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