Were you to propose to your boss that Egypt would be a mighty fine destination for outsourcing IT work, you'd likely get a forced chuckle or a reprimand. The country is, after all, suffering major disruptive political upheaval, and Egyptian authorities have demonstrated they're not afraid to cut access to the Internet, a critical business backbone.
Thus, Egypt's high ranking at No. 4 among top offshoring destinations on A.T. Kearney's study Global Services Location Index may come as something of a surprise to the casual observer. The study, released just today, analyzes and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centers, and back-office support.
In reality, Egypt's placement may be defensible, according to experts in the field, and the fact remains there are inherent risks in sending work overseas, such as the type of PR nightmares Apple has suffered for its business relationship with Foxconn. Those risks are among the trade-offs for enjoying lower wages and looser regulations overseas.
Notably, Egypt's high ranking on the list may be the biggest surprise in light of current events, but it's not the only one. According to A.T. Kearney, "An increasingly complex global economic environment has led to major changes in the ranking of the most attractive offshoring destinations."
Also of note: Companies are reportedly seeing declining savings from IT offshoring.
The more things change ...
India, China, and Malaysia continue to sit pretty in the top three spots, as they have since A.T. Kearney started compiling the report in 2003. However, the Baltic States, the United Kingdom, Mexico, and the United Arab Emirates have risen in the ranks, thanks at least in part to currency devaluation.
Broken down by region, Asia dominates the index, with India in the No. 1 spot, China at No. 2, Malaysia ranked third, Indonesia slotted seventh, Vietnam resting comfortably in eighth, and the Phillipines languishing in ninth.