Dubai Outsource Zone eyes multiple growth potential

The economies of the six Gulf Cooperation Council (GCC) countries are on an accelerated growth path due to sustained high oil prices which have also encouraged governments to launch massive diversification efforts. As a critical industry vertical, information technology and communication are the focus areas for these countries. Dubai Outsource Zone stands to gain from this scenario.

Hesham Amiri - Director of Sales for Dubai Outsourcing Zone, said:

"Global and regional trends point towards encouraging growth prospects. Leading research indicators affirm the region's IT spending has seen manifold increase. International market research firm IDC's 15 per cent growth forecast for this year on top of a remarkable 19 per cent expansion, offers us great potential."

An IDC report reveals, though spending on information systems outsourcing started from a small base in the UAE, it exploded by nearly 7.5 times. Services related to hosting infrastructure also made striking advances, rising by nearly 69 per cent in 2005. The firm predicts outsourcing spending, which amounted to around 15 per cent of the total IT services market, will reach approximately 23 per cent of spending by 2010.

Amiri cites these factors as favourable trends coupled with other advantages offered by Dubai Outsource Zone. "Our strengths include a business-friendly environment; advanced infrastructure accountability; high level of language skills; access to a large selection and cost-effective talent, safety and security, and market access," he assured.

"While Dubai is geographically positioned to offer us high quality talent from the nearby region, the world's first 'free zone' dedicated to outsourcing has built a reputation among companies that provide mid to high-end IT and business processes outsourcing (BPO) services," Amiri added.

DOZ has already increased its master plan to 11 times its original size due to heavy demand from local and international outsourcing companies. The zone has seen its total area increase from three million sq ft to 33 million sq ft.

Among the new entrants to the zone are integrated IT focused international business engineering outsourcing service provider Futech and Emirates airline. The Dubai-based carrier has announced plans to invest up to US$54.5 million to set up a call centre at DOZ with 500 employees. The 100,000 sq ft facility is due to be ready in 2008.

Apart from Emirates airline, the UAE's second telecom operator du, Dutch ABN Amro bank and Mashreq have also announced plans to set up call centres at DOZ.

Futech, on the other hand, plans to set up its regional headquarters at DOZ to support worldwide operations. It will provide consultancy and advisory services in business and IT outsourcing strategy, offering a no-frills approach to modernise enterprise and banking solutions.

Already a leading outsourcing destination in MENA region, DOZ aims to become one of the global top 10 in the near future. According to a report from global growth consulting company Frost and Sullivan, revenue from Offshore Shared Service Operations (SSO) is expected to touch US$85.1 billion this year compared to US$58.2 billion in 2006. SSO is a mode of outsourcing, which offers a range of tailored benefits for customers.

DOZ also serves as a centre for disaster recovery facilities for call centres located offshore elsewhere in the world. It caters to offshoring requirements from Europe, the US, Middle East, Asia and Africa, making it a vital link in the world of outsourcing.

Offshoring from Dubai has also proved to be beneficial to outsourcing companies based out of India, which makes up approximately 80% of the world's offshoring industry.

Jehangir Makhdum, General Manager of Back Office, a boutique outsourcing company based out of Dubai Outsource Zone said: "To have a disaster recovery location for India-based Business Process Outsourcing (BPO) firms is vital to us. In the event of a natural disaster, contingent plans must be considered in which the same tasks must be passed on to an already trained workforce in Dubai without disruption.

"Dubai's proximity to India serves as the ideal disaster recovery centre, allowing outsourced functions to be taken over by a qualified team instantly."

DOZ has so far registered about 72 companies and expects up to 400 firms to commence operations at the zone within the next few years.

With strengths that include world-class infrastructure, a range of business process services, access to skilled talent, cost effectiveness, business-friendly regulations and a strategic geographical location, Dubai stands as one of the best offshore hubs for outsourcing in the world.