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High outsourcing costs drive away international firms

International companies are still looking to India, Egypt and Jordan to oursource their call centres as Dubai’s comparatively high telecom and labour costs make the emirate less competitive, industry insiders at the Middle East Call Centre exhibition said yesterday.

“Is the country attracting demand like India or Egypt? It is not,” said Nidal Abu Ltaif, vice-president for Emerging Markets at Avaya, a global business communications systems provider.

It is three times more expensive to outsource call centres to Dubai than to main players like India or Egypt, Dominick Keenaghan, president of show organiser Insights, said.

The biggest cost for Dubai is labour, he noted. A call centre agent at the Dubai Outsourcing Zone (DOZ) costs $4,000 (Dh14,692) a month compared to $300-$400 in Egypt.

“It’s not cost effective for Dubai to compete with international outsourcers,” he added.

In addition to labour, the costs of real estate and telecoms in Dubai and the Gulf are major setbacks to competition, he said.

“The GCC cannot compete with India, South Africa and Kenya on these.”

Dubai will not be on the outsourcing map anytime soon, said Brownell O’Connor, a customer interaction expert.

“VoIP is over-controlled and where does Dubai get it’s labour anyway? The subcontinent.”

A call centre project in Dubai that O’Connor worked on a few years ago valued at $4 million to $6 million (Dh14 million to Dh22 million) was scrapped because of the telecom costs, he added.

Jordan is increasing its investments in ICT, including the outsourcing of call centres, said Nidal Qanadilo, director of ICT investments at the Jordanian Ministry of Information and Communications Technology.

Companies can cut one-third of their operating costs by outsourcing to Jordan — where it costs $300 to hire a call centre agent — compared to $1,200 in Dubai, he said. CTS, a Dubai-based contact centre whose clients include HSBC and HP, said that call centre outsourcing services in Dubai were pricier by 20 per cent to 30 per cent.

“Are we [Dubai] the number one choice? No, but we’re getting there,” said CTS sales and marketing director Sajjad Hamed.

Price adjustment

The company was forced to slash its prices by 30 per cent to compete with major outsourcers like Egypt, he added.

However, for local and international companies based in Dubai, it makes sense to set up their call centre facility here or hire local outsourcers as many multinationals base their Middle East headquarters in the emirate, industry representatives agreed.

There are over 25 call centres at the DOZ, according to Ammar Malek, Director of Operations at the zone. Emirates airline, the Jumeirah Group, ADCB, Mashreq Bank, Dunia Finance, AXA insurance, Aetna Health Services, Now Health International Services and du all have call centres there, he added.

“As market dynamics change, companies are also looking at new destinations for outsourcing their key business activities. The top priorities remain costs, greater efficiency, better quality and access to talent,” he said.

Source: Gulf News

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