Bridging the Gap between Offshore Outsourcing Strategies and Execution

Offshore Outsourcing now a day is no longer considered a tactic. High performing companies consider offshore outsourcing to be an important strategy required to gain the competitive edge needed to win in today’s aggressive markets. Usually those companies would have a well defined outsourcing strategy that is intended to align the actions of all individuals, teams and business units to achieve the corporate goals related to offshore outsourcing. But when it comes to execution they can run into trouble – especially during the significant times of business change that happened during the launch of the offshore outsourcing initiative. The reasons for this gap vary by organization, but typically include the following:

• There may be insufficient executive’s sponsorship for the offshore outsourcing strategies and the outsourcing initiatives, or an organizational culture that does embrace measurement – leading to insufficient measurement of the performance of the outsourcing projects initiates.
• Outsourcing strategies that are not communicated in a way that employees understand – so they don’t see how offshore outsourcing can benefit them and help there company grow while allowing them to maintain their jobs. Also middle management doesn’t know how to evaluate their business processes to find out which one is most suitable for outsourcing.
• It’s is unclear who is accountable for ensuring execution of the software outsourcing initiatives, projects and tasks.
• Incentives systems are not linked to strategy, so individual’s goals are not aligned with the company’s goals. Consequences and rewards for employee’s choices are inapt.

To close the gap between outsourcing strategies and execution, companies need to build strategic alignment across all levels of business. Symbyo Technologies offers IT Outsourcing Consulting services to help you bridge the gap between outsourcing strategy and execution and help your company align its outsourcing initiatives to your corporate goals.

DotNetNuke Development

DotNetNuke is a popular open-source Web Application Framework based on Microsoft Technologies. DotNetnuke can be used as a web application framework for building content based and database driven websites.

Portals built with DotNetNuke use proven practices that have been tested on thousand of websites around the world. DotNetNuke incorporate many of the proven practices and patterns of building Web client applications and it provides a very reliable and tested modular based architecture. DotNetNuke contains a collection of reusable components and libraries, as well as a large catalog of third party Dotnetnuke modules.

By using the DotNetNuke as a framework for building web based applications, architects and developers can focus their efforts on business opportunities and create Web client applications that effectively address the needs of their organizations instead of spending there valuable time on other common web applications development challenges (such as logging, validation, data access, exception handling, and many others) since these functionalities are available through dotnetnuke.

DotNetNuke also helps architects and developers build modular systems. A DotNetnuke module is a functionally complete and independent component. Modularity allows independent teams to work on different aspects of the application - there own DotNetnuke module - and also improves security and testability.

Dotnetuke also have a growing echosystem of programming professionals, service providers, DNN module developers, and DNN skin designers. The number of Dotnetnuke modules available for sale is growing rapidly as more and more .Net developers are starting to use DNN as a framework for building there websites.

DotNetNuke is provided as open-source software, licensed under a BSD agreement. In general, this license grants the general public permission to obtain the software free-of-charge. It also allows individuals to do whatever they wish with the application framework, both commercially and non-commercially, with the simple requirement of giving credit back to the DotNetNuke project community.

Symbyo Technologies provides Custom DotNetNuke module development services as well as DotNetNuke Skin customization. for more information about our custom DNN module development services please contact us.

Outsourcing To Egypt

Evidence in favor of Egypt as an offshore outsourcing location is compelling. Investors from Western Europe and North America are likely to be impressed with Egypt’s opportunities on several fronts, including:

• Workforce: Egypt’s labor pool is ample and it is educated. It is clear that young Egyptians are enthusiastic employees, westernized in the commercial outlook and value the ability to speak numerous languages. This provides Outsourcing companies with an excellent opportunity to recruit the type of employees with whom they can be confident of serving foreign clients effectively.

• Business culture: Egypt possesses a commercial atmosphere that is decidedly westernized, and that has attracted numerous multinational corporations. Management level executives are
multilingual, and foreign workers are commonly found. Such an atmosphere helps facilitate confidence in foreign investment in contact center services and an understanding of what clients and end-customers expect.

• Stability: In the middle east, Egypt is a hallmark of economic and political stability. As discussed earlier economic growth has been consistent and inflation has remained low. As well, elections are regular and democratic. Combined with efforts to strengthen transparent business practices, Egypt’s stable investment climate should build confidence among prospective offshore software development investors.

• Industry development: With the establishment of a local industry association, and support from the government, Egypt is rapidly gaining a reputation for quality infrastructure that is reliable and modern in terms of software outsourcing providers.

These key reasons are the foundation for growth in the Egyptian offshore outsourcing business. Given the enthusiasm shared by existing players and customers, it is very likely that this industry will continue its already rapid growth.

The Future of IT Outsourcing in Egypt

Although Egyptian IT industry is between 15 and 20 years behind India in its development cycle and its outsourcing IT services. However, there is growing interest from Middle Eastern countries in BPO and Software outsourcing to Egypt instead of India or Europe; this is particularly the case in the Gulf countries.

Indian companies even acknowledge that the skill base of Egyptian IT engineers meets the technical standards demanded by their Indian counterparts. Furthermore, Egyptian IT engineers are multilingual. This gives them an advantage over India, because India has primarily English speakers. The lack of multilingual capabilities in India makes it difficult for the EU countries to send some outsourcing work to India, which could make Egypt look appealing.
So, Egypt is off to a good start. However, there are structural problems in need of urgent attention before Egypt can leverage the progress it has made to date or before it can be a top five location for IT outsourcing during the next 5 to 10 years.

What Egypt Needs to Maintain Momentum

The Egyptian pitch is currently too focused on Cairo, which is one of the most polluted cities in Africa. Like Los Angeles, Cairo has its own smog problem, but Cairo also suffers from infrastructure problems such as a half-completed Ring Road. Although, the smart village outside Cairo has state-of-the-art infrastructure and has attracted a number of global IT players, it is only one location, whereas India offers at least six or seven different locations.

Therefore, the Egyptian government needs to replicate the ICT infrastructure of the smart village in other parts of the Egypt. To do so, the Egyptian government needs to tackle the following:

• Quality of life: When compared with the quality of life in the Gulf states, the quality of life in Egypt is significantly lower. Therefore, to attract foreign nationals to come and live in Egypt and work in the developing IT industry, the government needs to demonstrate that the quality of life in Egypt is on a par with Kuwait City, Saudi Arabia or Dubai. This includes convincing foreign nationals that they are safe walking along Egyptian streets.

• Development of road and rail infrastructure: According Egyptian government statistics, only 78% of roads in Egypt, are paved (2003 figure). Most main roads are adequate; however, local routes tend to be in a poor state of repair. A number of major routes are incomplete (e.g., the Cairo Ring Road). The Egyptian government has estimated it needs to spend $1.7 billion on major road construction and expansion projects (including $258.0 million on the completion of the Cairo Ring Road). Cairo also suffers from heavy congestion on its road, which prioritization of the third Cairo metro line (the Egyptian government has estimated the cost of phases 1 and 2 at more than $1 billion) may ease. Egypt’s railways have suffered from long-time neglect and under-investment for the last 50 years. According to the Egyptian government, only 47% of the railways’ locomotives are serviceable, and only 15% of the rail network is electrified. The number of fatalities also illustrate the dangerous state of the Egyptian railways; in the last decade, more than 500 people have died in accidents on the Egyptian railways. All this adds up to a dire need of investment required in the Egyptian rail infrastructure. The Egyptian government plans to invest more than $2 billion on the rail infrastructure. Prioritizing investment in the road and rail infrastructure will not only assist internal transportation, but it will also make life easier for the outsourcing industry. However, the Egyptian government must exploit private financing methods such as build, operate, transfer (BOT) if it is going to meet its ambitious targets.

• Data and building security: There are some concerns about terrorism and geopolitical stability in the region. For companies considering sending sensitive work such as BPO, convincing them that their data would be protected is extremely important. Of course, there are concerns about sending BPO work and even ITO work to India because of data and other security concerns as well. For instance, in 2005, four former workers of outsourcing provider MphasiS BFL Group were arrested for stealing more than $426,000 from Citibank customers. However, this and other security lapses have led Indian companies to enact stringent security measures such as closed-circuit cameras watching employees and data-masking technology. Egypt would do well to tackle the reality of data and building security needs, as well as the perception problems that exist in some parts of the West.
  

• The education system: Ensuring an adequate educational system that will turn out well-trained employees—at a high rate—should be a paramount concern for the Egyptian government and business groups. If the outsourcing market continues to grow, pressure will build on companies to hire faster. In addition, the labor market will tighten, wages will go up and attrition will rise—just as has happened in India. Broadening educational access and ensuring high quality will help Egyptians by raising the standard of living and will provide an adequate worker pipeline for outsourcing service providers.

Egypt in 5 Years: Two Possible Scenarios

A broad range of factors will come into play in Egypt’s development as an outsourcing locale, but one test of Egypt’s ambitions is its ability to learn from the mistakes made by the Indian IT outsourcing market during its development. Symbyo Technologies believes that there are two main paths by which Egypt can develop in the IT outsourcing market:

• Learning from Indian mistakes: Egypt has similar challenges in workforce creation and infrastructure to those of India. But if Egypt keeps in mind the spectacle of India wrestling with these problems after its outsourcing market exploded, and attempts to rectify these problems as it builds its market before the market takes off, it could succeed. And it could essentially succeed at a faster rate, potentially leapfrogging India in some areas. By focusing on its infrastructure woes, educational system and security issues, Egypt could become a significant player in the outsourcing world.

• Not heeding the lessons learned in India. Egypt’s pool of technical graduates is starting to come under pressure because of the success of the Egyptian government in attracting global IT players. Staff attrition rates are rising as the talent pool cannot meet demand. This is the start of the upward spiral of rising staff and business costs. Poor planning in India means electricity and water supplies are inadequate, there are road construction delays and badly designed roads create traffic snarls and hours-long commutes. If Egypt fails to heed the lessons learned in India, it will be the end of any opportunity Egypt had of threatening India’s dominance.

Based on its current efforts and plans, Egypt appears on track for the first scenario, learning from India’s mistakes. However, the Egyptian government needs to continue to focus on its primary goal and to learn the lessons from countries with more developed IT service industries.

The Egyptian Business Environment for Software Outsourcing Businesses

Egypt’s relative familiarity with Western culture and business values makes it a viable location for outsourcing growth.

However, success in the software outsourcing market will depend—at least in part—on overcoming some perception problems, especially in the North American market. Although US-based companies have grown increasingly comfortable with software outsourcing and offshore development (often more so than European-based companies, where labor laws are stronger and controversies about offshoring can be more intense), they still hesitate to send their
work—especially the highly sensitive data inherent in BPO work—to untested offshore locations. BPO, which includes human resources (HR) data and finance and accounting work, is something many North American companies still want done in nearshore locations—or at least in a company with a nearshore presence as part of its global delivery network.

Two of the biggest multinational service providers, IBM and Accenture, say they currently do not see Egypt as part of their BPO delivery networks because they are not seeing a need for such from their customers.


Egypt has a much better shot at building momentum with European-based companies. And it is taking steps to remove other impediments to growth as well. Reforms of the labor laws in 2003 created a very powerful, flexible workforce and removed many of the previous impediments to recruiting staff in Egypt. Reforms have focused on creating a balance between employees’ and employers’ rights. Specifically, the reforms address areas such as the right of an employer to
fire an employee and the conditions pertaining to this, and also grant employees the right to carry out a peaceful strike according to controls and procedures.

One of the biggest worries facing investors in an emerging market such as Egypt or China is the protection of intellectual property. In Egypt, intellectual property protection was introduced in 2002 under Law 82, indicating the Egyptian government’s commitment to protecting investors’ intellectual property.

In December 2004, the Egyptian government amended the investment Law 8 of 1997 by introducing Law 14/04. This made the General Authority for Investment and Free Zones (GAFI) the sole authority to which investors have to turn to have their proposed projects approved, making it a one-stop shop. The one-stop shop encompasses delegates from different governmental agencies under a single roof.

GAFI’s one-stop shop has streamlined the number of procedures and has simplified the investment law. For example, it has profoundly reduced the time necessary to establish a new company from 4 months to a maximum of 3 days. However, reducing the time to establish a new company was just one of six steps: registration, tax card, industrial project approval, building permit, industrial registration and operating license. Previously, the International Finance Corporation (IFC, the private sector arm of the World Bank Group) says the whole process took 277 days; now it’s 135 days and four steps. Soon it will be only 45 days and three steps: pre-approval and land assignment, final approval and building permits, and industrial
registration and operation licensing.

Since 2004, the Egyptian government has worked hard to increase the attractiveness of Egypt’s business environment. This includes the introduction an anti-trust law and a unified tax law. The latter increased the transparency of the Egyptian tax system and reduced corporate and personal taxes by half.

Within the ICT sector, the Egyptian government also offers incentives to attract international companies to set up call/service center and BPO-type operations in Egypt. These incentives include the Egyptian government (via the Ministry of Communications and Information Technology [MCIT]) paying for the training of staff to bring them up to the required standard to deal with the clients from the multinational companies they support. Orange Business Services is an example of a company that established a major service center that has received support in training its resources.

Egyptian Government Initiatives for the Outsourcing Market

To compete with China, India and other outsourcing destinations, Egypt needs to create a pipeline of highly skilled and trained, business-savvy graduates who will enable the country to compete successfully against the outsourcing giants.

The MCIT has a number of initiatives in partnership with the United Nations Development Programme (UNDP) under the banner of the ICT Trust Fund. These initiatives are backed by some of the global players in the ICT market, including:

• Egyptian Education Initiative (EEI): The EEI is to looking to use ICT as a vehicle to improve
education throughout the country via a public-private partnership model. It aims to benefit trade and industry by improving the standards of information and communications technology in the country’s schools and colleges through partnerships with private firms. CA, Cisco, HP, IBM, Intel, Microsoft, Oracle and Siemens each signed a letter of intent supporting the initiative. Phase 1 targets 820,000 students at more than 300 colleges.

• E-Learning Competence Center (ELCC): The ELCC was established in 2004 as a partnership between the MCIT and the Cisco Academy Program, a nonprofit arm of Cisco. ELCC is focusing on delivering elearning to universities and public and private (particularly SMEs) sector companies. Microsoft and Oracle have already signed agreements with ELCC.

• Illiteracy Eradication Initiative (IEI): The IEI is looking to create easily accessible digital media
(accessible via CDs or the internet) to teach written Arabic (both words and characters) and basic mathematics. The aim it to make this digital media available at Egypt’s numerous IT clubs. The ICT Trust Fund has partnered with the National Council for Women, several nongovernmental organizations

and the General Authority for Literacy and Adult Education (GALAE) for this project.
• Mobile IT Club: The ICT Trust Fund kicked off its Mobile IT Club project initiative to serve
communities in remote and rural areas in October 2005. The Mobile IT Club is a bus or a caravan equipped with a generator, air conditioning and satellite internet access, plus digital cameras, printers and a scanners. On average, the mobile units can accommodate 10 to15 visitors at a time and are accommodating between 40 and 150 visitors per day, depending on whether the unit is a bus or caravan.

The MCIT is implementing the National Telecommunications and Information Technology Strategic Plan aimed at building a strong IT industry in Egypt. This includes a number of initiatives focusing on developing the necessary high-quality human capital needed to drive the IT industry forward.

Key to this plan was the establishment of the Nile University (NU), which opened in early 2007. NU is focusing on applied IT research, looking to create solutions to industry challenges via strong linkages between the university and industry. NU has three main centers specializing in research and development (R&D), entrepreneurship and incubators, and innovation and intellectual property. These centers act as catalysts to drive and harness the technological capabilities of local industry, thereby improving Egypt’s international competitiveness.
In addition, the Egyptian government is constructing “smart villages”/technology parks as part of its efforts to entice ICT companies, targeting the Middle East market, to base their operations in Egypt. The first smart village was constructed outside Cairo.

Although Egypt is competing with other established centers of outsourcing such as India and China, the Egyptian government is setting up a number of intercountry initiatives. These cover education, assistance in building ICT workforce capacity and knowledge exchange.

Examples of these initiatives include pacts signed by the Information Technology Institute (ITI) of Cairo with NIIT (Asia’s largest IT trainer) in November 2006. NIIT will provide IT education programs to assist in building a pipeline of skilled ICT professionals. In September 2006, Cairo University signed a letter of intent with a Chinese educational delegation to set up a Confucius Institute to promote Chinese language and culture.

Most of the initiatives focus on creating the basic knowledge platform that will sustain the technology graduate pipeline supplying the IT sector. Yankee Group sees the important part as the specialist centers established within the Nile University to nurture R&D, incubators and innovation; these centers should lead to a sustainable IT industry.


However, what appears to be missing is the ability to teach business or IT process development, in which Egypt has no history. These skills should come from the links with NIIT and the Indian government, but the Egyptian government should not be overly reliant on external sources to assist with its IT capacity-building initiatives.

There is a dangerous overreliance of the Egyptian government to develop initiatives. The Egyptian government must ensure that bureaucracy and red tape do not strangle these initiatives. Therefore, it is imperative for the Egyptian government to encourage increasing levels of private sector involvement, which is one area where India is extremely successful.