Egypt s ICT strategy framework follows a holistic approach to support all enablers of industry growth

Transcription

1 Destination Egypt ITO-BPO Value Proposition

2 Contents Why Egypt Egypt s Offerings in O&O Egypt as a Top O&O Destination 2

3 Contents Why Egypt Egypt s Offerings in O&O Egypt as a Top O&O Destination 3

4 Egypt s ICT strategy framework follows a holistic approach to support all enablers of industry growth A Human Capital B Infrastructure Availability of talent and special aspects of talent (e.g., creativity, risk appetite). & Connectivity Availability and quality of transportation, communication and utility infrastructure. F Organization Organization structure t and its people for future. Egypt s ICT Strategy C Financial Capital Availability of public and private funding. E Demand Creation Investment flourishment and support D Business Ecosystem/Legal Efficiency & effectiveness of business processes and legislative structure in the country Egypt has achieved USD 1.1 Billion in Exports revenue in 2010 SOURCE: ITIDA 4

5 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 5

6 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 6

7 Quick facts about Egypt s talent pool 1 4 Nobel prize 2 Working pool of winners; 2 for peace, chemistry and literature million out of which 49% working ki iin services sectors. 3 High cultural 4 3rd largest English speaking country in O&O industry affinity to the US and Europe due to liti l history hi t political and tourism. 5 60,000 professionals are working in the BPO-ITO sector out of which 30, are working on offshore accounts Talent 7 Prominent graduates from 6 January 25th revolution was initiated by Egyptian youth using technology. SOURCE: ITIDA, CAPMAS, IDSC, Ministry of Economic Development Egyptian universities include Mohamed El Baradei, Queen g Mahfouz,, Rania,, Naguib Omar El Sherif, and Ahmed Zewail. 7

8 History leads to a multilingual, culturally diverse society Talent Assyrians Ptolemaic (Greek) Islam Turks Mohamed Ali Independence 670 BC 332 BC 642 AD 1517 AD 1805 AD 1922 AD 525 BC 30 BC 1260 AD 1798 AD 1883 AD Persians Romans Mongolian s French British Colony SOURCE: ITIDA 8

9 Egypt s graduating pool of 426,000 students is one of the largest among low cost offshoring destinations Talent Number of university graduates p.a. across offshoring destinations Thousands, 2009 China India Russia Brazil Poland Egypt* Philippines 860 1,870 pp 410 g g Malaysia Romania Hungary Czech Republic Morocco Tunisia Jordan ,245 5,600 Second largest talent pool amongst offshoring destinations in EMEA region. Largest talent pool amongst Arabic speaking countries. * Graduates from Public and Private Universities and Higher Institutes SOURCE: CAPMAS; IDSC; UNESCO Statistics 9

10 Egypt produces hundreds of thousands of graduates annually Talent Egyptian Education Higher Institutions, Headcount Enrolment, and Outputs* # of Institutions Enrolment Output 1,972, Universities 1 93, Private Higher Institutes and Academies 357, ,277 Undergraduates 48,552 Post Graduate * Graduates for the year 2008/ Public Universities and 18 Private Universities SOURCE: ITIDA, CAPMAS, Supreme Council of Universities, IDSC 10

11 Egypt s annual graduating talent pool are diversified among various disciplines Relevant pool for BPO* Commerce/EPS Arts/Languages Education Tourism Commerce & Business Administration 101,350 Annual Number of Graduating Students Commerce, Business Administration, and Economics & Political Sciences Thousands (09/10) Arts, Languages, and Alsun Talent Relevant pool for ITO* 9,200 Sciences 14,600 Economics & Political Sciences Education 1, Arts 49,800 3,300 Tourism 44 3,700 Law Alsun/Languages 3, ,500 Translation 1,125 Medical Sciences , Sciences 1,700 Computer Science Education 52,800 Engineering 4,600 Archeology 1,100 Other ,000 Tourism & Hotels 8, , ,900 54,000 * Industry hiring pattern shows students from these faculties are qualified to do BPO/ITO job with minimal training. 1 Other includes Arabic & Islamic Studies, Agriculture, Mass Communication, Domestic Management, Humanities (Music, Art, Ballet, etc) 2 Specialized Disciplines include Marine, Petroleum, Mining, Chemical, Nuclear, Bio/Medical, Optics, Textiles, Metals, Aeronautics, Electro Physics, etc. SOURCE: MCIT data; CAPMAS Sciences CS Engineering Information Technology & Systems Computer Science Specialized Disciplines 2 Electrical Quality Control Communications Computer & IT Mechanical Civil 11

12 Students graduate annually from universities with multilingual capabilities in 16 different languages Talent Annual University Graduates by Study Language 1 Italian Spanish German 1,200 1,400 Annual Suitable and Willing Graduates Pool for Outsourcing Industry 2 Number of graduates (08/09) English ~26,000 French 4,150 6,000 Other 2,400-3,200 English 88,000 95,000 French ~ 3,000 Italian ~ 1,500 German ~ 800 Spanish ~ 300 OTHER LANGUAGES Hebrew, Siamese, Chinese, Persian, Russia n, Turkish, Japanese, Greek, Korean, Urdu, and Czech Total suitable talent pool ~ 31,000 1 Medium of teaching in graduation is in the respective languages. 2 Berlitz level 4+ indicates ability to function in common personal and professional situations Note: Greek & Latin language is available however hasn t produced any graduates for the year 08/09. SOURCE: MCIT data; CAPMAS; IDSC; AC Nielsen language study

13 Multiple initiatives to enhance the talent pool, tailored to the BPO & ITO industries, are underway Talent XX Estimated number of trainees (2010) Programs Launched BPO Programs EduEgypt (BPO program) ~ 6,000 1 European language program ~ 300 ITO Programs EduEgypt (ITO program) Etisal ITIDA program ~ 1,000 ~ 350 ITI program ~ 800 Programs in Design Phase Advanced management and professional training program Service Science Management and Engineering Program (SSME) ~ 600 ~ SAP Academy Program ~ 150 MCIT professional training program ~ 5,000 MCIT customized training program ~ 500 In addition, several ITO focused training programs are under design 1 Includes 3rd and 4th year students 2 Scaling up to 10,000 students over the next 4 years to cover all students in faculties of commerce, engineering and computer science. SOURCE: MCIT; ITIDA; ITI 13

14 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 14

15 Egypt s fully-loaded operating cost is competitive compared to other locations across all service lines (1/3) BPO Cost Costs per FTE for Call Centers* USD/year, ,770-41% 24,230-35% Personnel 1 16,360 15,830 15,010 Non- Personnel 2 Poland Morocco Philippines Egypt India * Large Call centers (from 500 1,000 FTEs) 1 Includes agent compensation, supervisor compensation, support staff costs, training and recruitment 2 Includes IT & telecom costs, rent, maintenance, SG&A SOURCE: MCIT/ITIDA; industry expert interviews 15

16 Egypt s fully-loaded operating cost is competitive compared to other locations across all service lines (2/3) Cost ITO Costs per FTE for Remote Infrastructure Management USD/year, 2010 Cost per FTE for Technical Support Services USD/year, ,950-49% 28,960-36% Personnel 1 20,750-15% 17,690 13,895 22,160 21,745-15% 18,510 15,865 14,780 12,180 11,210 Non- Personnel 2 6,800 6,965 6,330 4,655 Poland Jordan Egypt India Poland Jordan Egypt India 1 Includes agent compensation, supervisor compensation, support staff costs, training and recruitment 2 Includes IT & telecom costs, rent, maintenance, SG&A SOURCE: MCIT/ITIDA; industry expert interviews 16

17 Egypt s fully-loaded operating cost is competitive compared to other locations across all service lines (3/3) Cost ITO Costs per FTE for Application Development & Maintenance Services Cost per FTE for Package Implementation Services USD/year, 2010 USD/year, ,915-52% 64,250-35% 495 Personnel 1 49,495 26,205-15% 22,180 17,100 53,805 38,515 41,680 31,705-16% 33,222 24,300 Non- Personnel 2 10,445 10,980 9,975 8,922 Jordan Poland Egypt India Poland Jordan Egypt India 1 Includes agent compensation, supervisor compensation, support staff costs, training and recruitment 2 Includes IT & telecom costs, rent, maintenance, SG&A SOURCE: MCIT/ITIDA; industry expert interviews 17

18 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 18

19 Egypt has dedicated BPO/ITO parks with a capacity of 135,000 employees Smart Village Maadi Park Infrastructure Built over 32 million sq ft Already occupied by 120 companies & 20 MNCs Technology park with state-of-the-art infrastructure Located in Cairo metropolitan area Current capacity of ~ 40,000 professionals. Expected to host more than 500 companies and more than 100, employees by BPO/ITO delivery park built over 2 million sq ft of prime real estate in the center of Cairo. Capacity for 35,000 employees in over 40 buildings Good connectivity to metro network. 3 buildings are finalized and operating (11,000 sq m) 4,000 direct jobs through 2,000 seats Government has committed to building an additional 60, m 2 Phase 1 will become fully operational by SOURCE: Smart Village Company; MCIT Press Release 19

20 Egypt s strategic location allows easy access and connectivity to several international submarine cables Infrastructure Selected undersea cables passing through Egypt Primary internet backbone between South East Asia, India, Middle East, and Europe passes through Egypt Route of fsea-me-we 4 cable Cable Capacity (Gbps) FALCON 2,262 Route (landing points) Mumbai-Middle East- Suez (Suez) SEA-ME-WE 4 1,331 SEA-ME-WE new cables to be completed in 2011 with additional capacity of 20 Tbps Singapore-Middle East- France (Suez) Australia-Japan-India- Middle East-Germany 1. Marseille, France (Alexandria, Suez) 2. Annaba, Algeria 3. Bizerte, Tunisia 4. Palermo, Italy 5. Alexandria, Egypt 6. Cairo, Egypt (overland) 7. Suez, Egypt (overland/return) 8. Jeddah, Saudi Arabia 9. Fujairah, UAE SOURCE: Telecom Egypt; Web searches; Reliance Globalcom; Kidorf Innovative Methods; SM3 20

21 Egypt is gearing up to be a multicenter offshore location Infrastructure Cairo Population: 17 million University Grads: 162,280 16th largest city in the world Largest BPO/ITO hub in ME Excellent infrastructure and access services High quality talent pool (AUC 1, GUC 2, Cairo Univ.) Alexandria Population: 4.3 million University Grads: 35,900 2 nd largest city in Egypt BPO/ITO hub for Western Europe market. Innovation hub for US Excellent connectivity (2 international airports, 2 ports) Focus of Egypt's commercial, industrial & maritime expansion. Population: 5 million 3 University Grads: 33,400 Was home to a large Greek community ITO hub for ME Economy depends on trade, agriculture and the recently discovered natural gas. Seat of a university associated with the University of Cairo and of a college of technology El Mansoura Assuit Population: 3.6 million University Grads: 19,000 City has an international airport. Home to the University of Assuit, one of Egypt s largest universities 1 American University in Cairo; 2 German University in Cairo; 3 Population of Dakahlia Governorate SOURCE: MCIT/ ITIDA; Central Agency of Public Mobilization and Statistics, Statistical Year Book, September

22 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 22

23 Egypt is strategically located as a hub between Europe, Africa, Asia, and the US 5 hour flight radius Business Env t New York 12 hours London Frankfurt Munich Moscow Amsterdam Paris Rome Madrid Istanbul Cairo Egypt Dubai Riyadh Tokyo 12 hours Near-Shore Location ~3 hour flights from target regions in the Middle East ~4-5 hour flight time to major European cities (Paris, Frankfurt, London, Madrid) ~6 hours flight time from India Johannesburg 8.5 hours Mumbai 5.5 hours Singapore 10 hours Time Zone Proximity to EMEA Similar to CET 1 Business Continuity to Asia & US Follow the-sun approach 1 +1 hour during Winter time SOURCE: Team analysis 23

24 The pace of reforms has accelerated over the past years making Egypt attractive for foreign investment Business Env t Tax Highest personal tax rate cut from 32% to 20% Corporate tax rate cut from 42% to 20% Adopted streamlined collection procedures Customs Reduced tariff from an average of 14.6% to 6.2% Simplified and reduced tariff bands from 27 to 6 Adopted streamlined customs procedures Financial Sector Stable Banking system; resilient to financial crisis and revolution Relative stability of currency Privatization of public banks initiated Introduction of Nilex, the region s first small cap stock exchange Legislation and Institutional Framework Reduced the cost to start a business. Incorporation time slashed to an average of 72 hours. One stop shops introduced at multiple locations throughout the country. New commercial court system - Anti-money laundering and Antitrust laws implemented. Continuously improved ranking in IDC Global Software Piracy Study from 69% in 2003 to 59% in 2009, well below other BPO locations such as India, Morocco, Philippines, Kenya, Tunisia, China and Bulgaria. SOURCE: World Bank/IFC; Doing Business 2011; GAFI 2010; IDC Global Software Piracy Study 2010, Central Bank of Egypt; WEF Global Competitiveness Report 2010; UNCTAD World Investment Report 2010; AT Kearney FDI Index 2010 Egypt is 3 rd most preferred location for future investment in the Middle East after Dubai and Abu Dhabi. Four economies come close to ranking among the top 20 FDI locations in this year s Index: Chile, Egypt, Singapore and Turkey. A.T. Kearney FDI Confidence Index 2010 Egypt has succeeded, for the fifth time within six consecutive years, to improve its ranking, enhance its investment climate and business environment. The country jumped 71 positions from 2006 to rank 94 th in the overall ease of doing business ranking. Doing Business 2011 IFC Egypt is now 70 th in the rankings, up from 81 st in 2008/2009. Egypt jumped 11 places in the World Economic Forum s Global l Competitiveness i Report 2009/2010 as a result of the recent liberalization efforts in the country. WEF Global Competitiveness Report 2010 Egypt was ranked 1 st in North Africa and 2 nd in the African continent, after Angola, in terms of net FDI inflows. World Investment Report UNCTAD

25 Egypt provides unique advantages as an offshoring location for IT and business process outsourcing Abundant & Multi-lingual Talent Supply Competitive Cost of Operations Government Support Quality and Scalable Infrastructure Conducive Business Environment 25

26 ITIDA is a one-stop shop for dedicated investor assistance and offshoring industry development Gov t Support ITIDA's Responsibilities ITIDA Information Technology Industry Development Agency Executive IT arm of the Ministry of Communications and IT with a public-private partnership model Guides and promotes investments in the BPO/ITO sector Supports and fosters development of BPO/ITO industry in Egypt Supports R&D in the ICT sector and implements its output Affiliates & Partners 1 General Authority for Investment SOURCE: ITIDA Description Industry Development Investor Assistance Dedicated initiatives to develop a qualified, sustainable and deployable talent pool. Collaboration with universities, leading companies in outsourcing training and multinational clients. Encourage development of dedicated state- of-the-art parks for BPO/ITO delivery. Support requests for information and due diligence visits. Complete set-up assistance and liaison i with GAFI 1 ; facilitate incorporation, work permits, customs clearance and technical approvals. Subsidies granted for training and telecom. Provide strong connections with local industry and ecosystem. Governmental Bodies Training & Certification Incubating Centers Ministry of Higher Education 26

27 Contents Why Egypt Egypt s Offerings in O&O Egypt as a Top O&O Destination 27

28 Strategic focus areas for Egypt in ITO and in broader play in BPO BPO Broader play across: Industry functions (e.g. F&A, help desk, HRO) Verticals (e.g. Banking, Telecom) ITO Application Development Technical support Package implementation Testing Remote infrastructure management Innovation Embedded Systems Research & Development Engineering Services Mobile Application SOURCE: ITIDA 28

29 Egypt is home to several Fortune 500 companies and hundreds of multinational and regional players BPO ~12,500 Offshore Employees ITO ~ 15,500 Offshore Employees Innovation ~ 1,400 Offshore Employees SOURCE: ITIDA 29

30 Geographies and Languages Served from Egypt North America USA, Canada (Quebec) Europe UK, France, Italy, Spain, Germa ny, Switzerland, Portugal, Gree ce, Austria, Belgium, & Luxemburg Middle East KSA, UAE, Qatar, Bahrain, Yem en, Kuwait, Iraq and Israel Asia India, Pakistan, Malaysia, Ban gladesh Africa Sudan, Chad, Kenya, Tanzania, Nigeria, Morocco, Libya & Algeria Australia & New Zealand English American and British accent European French, German, Spanish, Italian Portuguese, Turkish, Greek, Swedish, Dutch, Hungaria n, Czech Asian Hebrew, Persian, Urdu SOURCE: ITIDA 30

31 Contents Why Egypt Egypt s Offerings in O&O Egypt as a Top O&O Destination 31

32 What the World thinks about Egypt in O&O Cairo has once again been recognized as one of the world s Egypt further strengthens its top offshoring cities, ranked 4th position, ranking 4th on the emerging city. Alexandria, also showed marked improvement jumping to 47th having only entered the top 50 last year. Top100 Outsourcing Cities Global Services-Tholons, 2010 Index. A.T. Kearney Global Services Locations Index, 2011 Egypt named outsourcing destination of the year. European Outsourcing Association 2010 National Outsourcing Association 2008 Egypt was ranked as the number 1 outsourcing destination in Africa. Commonwealth Business Council and CyberMedia, 2009 SOURCE: Analyst reports 32

33 Egypt ranks 4 th in the A.T. Kearney Global Services Location Index 2011 Ranking 2009 Ranking 2009 vs India China Malaysia Egypt Financial attractiveness Skills availability Business environment 5 Indonesia Mexico Thailand Philippines Egypt has improved by 9 positions in 4 years. 15 UAE Poland Czech Rep Morocco Note: At Kearney GSLI 2011 has been issued before January 25 th Events SOURCE: A.T. Kearney Global Services Location Index 2011, 2009 AT A.T. Kearney ranks Egypt number 1 Global Service Delivery location in the EMEA region 33

34 Testimonials Today Egypt is one of Microsoft s fastest growing subsidiaries. Our entirely Egyptian local staff shares my pride in this accomplishment. - Bill Gates, Chairman, Microsoft, 2008 I am optimistic about Egypt s future because of the way it is nurturing its talent, its human resources and its technical potential. These initiatives mark IBM s commitment to strengthening that process of growth and opportunity, and extending the long and highly successful partnerships we have enjoyed in Egypt. - Samuel J. Palmisano, Former Chairman, President and CEO, IBM, 2009 I think the geographical factor is important. I really do think of Egypt as right in the middle of the action. For the whole of the European operations, it s just an easy option. And even when you have the complete opposite like Australia and New Zealand it is even better for us because we run the UK during the day and in the same seats we will run Australia and New Zealand at night, so the efficiency of the building is massive. - Richard Daly, Former CEO, Vodafone Egypt, 2007 Since the opening of our Cairo service center just over a year ago, Stream has seen tremendous growth and success in the region. The excellent language skills, labor pool scalability and exceptional government support has enabled us to provide un-paralleled service programs for our clients. We are thrilled to continue our work with the ITIDA to ensure that we quickly and effectively ramp up training and support efforts in Cairo for these clients. - Scott Murray, Former Chairman and CEO, Stream Global Services, 2010 SOURCE: ITIDA 34

35 Sample Success Stories The fastest growing Contact center in Egypt. In less than 2 years it has hired ~ 700 employees and renewed its agreement to employ a total of 4,000 employees by Serves USA, Canada, France, Belgium, Switzerland, Luxemburg, Spain, UK, Germany, Italy & Middle East. The first contact center established in Alexandria. Signed agreement in 2010 for hiring 1,000 employees in the next 3 years, and in less than a year it has ~400 employees. Provides technical support services to the North American market. First major international call center operator in Egypt Doubled their headcount since 2009 with currently over 1,500 FTEs with future plans to grow to 3,500 in Was fully operating during the revolution and attracted t more business post revolution. One of the largest call centers in Cairo with current headcount of more than 1,700. The biggest center ever for Vodafone UK clients outside Britain. Provides telemarketing services provided to UK, Australia and New Zealand. Signed an agreement in January 2011 to expand call center services and employ 2,730 employees in 3 years. SOURCE: ITIDA High-end embedded software design center mainly for automotive industry. Cairo was chosen in direct competition with Central European locations, decision i taken based on superior quality in Egypt. Currently employs 280 engineers and signed a second agreement to hire another 220 graduating engineers. 35

36 Thank You Information Technology Industry Development Agency (ITIDA) Smart Village, Building B121, Cairo Alex Desert Road, Giza, Egypt Tel: Fax:

37 What World Leaders & Media say about Egyptians We must educate our children to become like young Egyptian people. Barak Obama President of the United States Today we are all Egyptians. Jens Stoltenberg Prime Minister of Norway We must consider teaching the Egyptian revolution in schools. David Cameron Prime Minister of United Kingdom The people of Egypt, are the greatest people on earth; and they deserve the Nobel Prize for Peace. Heinz Fischer Austrian President There is nothing new in Egypt. Egyptians are making history as usual. Silvio Berlusconi Prime Minister of Italy For the first time, we see people make a revolution and then clean the streets afterwards. SOURCE: ITIDA, Web searches 37

38 Attractiveness of Egypt as an O&O location has increased, with several multinationals setting up centers in the past years BPO Deals ITO Deals Description Employees 1 BPO F&A for EMEA 1,500 Description Global delivery center (package implementation) Employees 1 1,100 Contact center & KPO serving UK, GER, NZ 2,500 Technical support/ Infrastructure management 230 BPO F&A 1,200 Embedded Systems 440 Contact center 4,400 Contact center Contact center 1 Total number of employees over 3 years SOURCE: MCIT/ ITIDA First Contact center in Alexandria ~ 13,000 Employees 1,400 1,000 1,000 Technical support in English and Arabic Testing and quality assurance in German Engineering services to Middle East, Europe, North America, and Singapore R&D services (nanotechnology centre) ~ 2,500 Employees

39 Several multinational and local companies have established large contact and BPO centers (1/2) Companies Description Services provided by Esnad include Finance & Accounting outsourcing, Contact Center outsourcing and Market Research outsourcing. Employees Offering service to counter party link ltd. in order to equip providing complete and accurate reference 88 data to the securities industry community globally. Customer support mainly for telecom industry serving the Middle east region in English and Arabic language. Regional call center and credit card processing center serving HSBC's customers in the Middle East, Gulf area, and France. Business Process Delivery Center offering Back office and transaction processing operations, along with call center and technical support services. The fastest growing Contact center in Egypt. Established in June 2009 and aspiring to grow to 4,000 employees by , The first contact center established in Alexandria. Serving the North American market, having 140 aspiration of 1,000 employees in the next 3 years First major international call center operator in Egypt with plans to scale up to several thousands agents. 1,500 Largely serves the local lmarket along with ihtelemarketing services provided d to Western 1,700 Europe, Australia and New Zealand. 1 Total number of employees including domestic and export work (June 2011) SOURCE: ITIDA 39

40 Several multinational and local companies have established large contact and BPO centers (2/2) Companies Description First center to open BPO operations in Cairo 9 years ago. Serves mainly clients from North America and Canada. Employees Contact center supporting customers fromnorth America, Europe and Middle East with Arabic, 1,800 English, French, German, Italian and Spanish. Provides call center, non voice and technical support services to the US, UK, and Australia. 200 Contact center supports customers in English, French, German, Spanish, Italian, with 50% staff supporting international customers. Provides call center and BPO services to major multinational local clients and serves USA and UK markets. Contact center supporting customers from France, US, UK, Italy, Spain, Belgium, Luxembourg, Germany, Portugal, Greece, the Gulf, in their respective local language. 1,700 1,700 1,800 1 Total number of employees including domestic and export work (June 2011) SOURCE: ITIDA 40

41 Several multinational and regional companies have established IT centers in Egypt (1/3) Companies Description A global IT leader in systems integration offering deep expertise in the implementation, upgrade, maintenance, and training for the Oracle applications and technologies and ICT applications. Employees/ service line 1 The first ESRI branded Company and the GIS leading Professional Services Provider in the 260 Middle East and Africa. Full range of business consulting, application development and maintenance, software testing. 1, Plan, design, implement and integrate operating and business solutions Provide functional, performance and security testing for global clients Serve Egypt, Saudi Arabia and Middle East; supports Arabic, English and French Kuwaiti based integrated information technology solutions and software services provider. Serves Middle East, Africa, and Asia Pacific Operates as an offshore center for the Gulf region, specialized in package implementation and application development. Plans to increase to 100 employees serving Europe and North American region Global Care Center (GCC) has been capitalized to provide technical support for both fixed and mobile networks in the MEA region Mahindra Satyam (formerly Satyam) opened its 1st center in Egypt in July 2007 with programmers (ADM) Main region serviced is EMEA 1 Employees serving export and domestic markets (June 2011) SOURCE: ITIDA; Interviews 41

42 Several multinational and regional companies have established IT centers in Egypt (2/3) Companies Description Part of Oracle Solution Support India Centre Oracle package implementation supporting Middle East, Western Europe, Singapore, Australia and Latin America Employees/ service line 1 Provide experienced coordination of projects from start to finish, using Orange proprietary 300 Synergy project management methodology. Offers a portfolio of integrated, enterprise scale analytical solutions covering applications such 60 as data warehousing, customer management, finance and performance management, and demand and supply chain management. Serves North Africa region. Provides software solutions for process modeling and simulation, integration, process 60 automation with human review, business activity monitoring and collaboration. 48 The company operates as an offshore center for Quality Management, Software development and testing activities. Serves Germany, Austria and Switzerland Remotely managing Vodafone Global Live! portal platform, including Unix machines, load balancers and database servers. India s third largest IT firm opened its global delivery centre to service existing client base in EMEA region (ADM) Employees serving export and domestic markets (June 2011) SOURCE: ITIDA; Interviews 42

43 Several multinational and regional companies have established IT centers in Egypt (3/3) Companies Description Employees/ service line 1 Egyptian systems integrator providing design, implementation and service solutions for the Middle 363 East market, specializing in the hospitality sector. IT and communication solutions providers and system integrators, with more than 400 major customers in the Middle East Egyptian systems integrator and solution provider to the Middle East market Serve telecom, oil and gas, manufacturing, utilities, government and financial services sectors Egyptian software professional services firm Offers Portals, Business Intelligence, SOA, and ADM services to global companies (Middle East, North America, and Europe) Development, deployment and support of portals, intranets & e commerce solutions, Enterprise 330 Integration & Microsoft Dynamics CRM implementations, Helpdesk Solutions. Develop and deploy customized packages in the field of Hospital Management Information systems and ERP systems based on Oracle, Microsoft and Sybase ServeEgypt, Saudi Arabia and Middle East Employees serving export and domestic markets (June 2011) SOURCE: ITIDA; Interviews 43

44 Egypt has developed considerable expertise in global technical support centers (1/2) Companies Description Employees 1 Responsible for the delivery of services to customers in the MENA region 330 Center of excellence Delivering call centre and high end h technical services, as well as opportunities for product development 250 The Global Care Center supports fixed and mobile networks in MEA region. 250 Serves over 100,000 customers across 140 countries in English (Translation hub for non English speaking front end customers (Arabic, French, German, Italian, Spanish, and Greek) Provides 24x7 global technical support for internal organization Target tis to reach 2,000 engineers in the near future 400 1,420 Technical support for US network hardware manufacturer. 40 Contact center serve the company's clients in Europe, the MEA region and US in the six 210 languages of English, French, German, Spanish, Italian & Arabic. Provides technical support for a global PC & Notebook manufacturer. Centre started in June 2005 with 20 engineers Serves high value customers ofvodafone in Australia and New Zealand Total number of employees including domestic and export work (June 2011) SOURCE: ITIDA 44

45 Egypt has developed considerable expertise in global technical support centers (2/2) Companies Description This center offers technical support for hardware, professional services, and networking for Middle East, Europe, and Africa. Technical support team serving Micron Technology, leading manufacturer of semiconductor devices Employees It is a technical support center which serves USA for companies like Microsoft and Cisco Total number of employees including domestic and export work (June 2010) SOURCE: ITIDA 45

46 Egypt is emerging as an engineering and R&D services outsourcing destination Companies Description Egypt IBM Nanotechnology Research Centre Main fields of research are in areas of simulation and modeling software, alternative energy sources (thin film silicon photovoltaics) and energy recovery for desalination Provides offshore engineering and services to Invensys Operation Management for the delivery of automation and information technology, systems, software solutions, services and consulting to the global manufacturing and infrastructure industries systems to different sectors. Design center opened 12 years ago, contributes to product development at the headquarters Growing faster than any other worldwide Mentor Graphics center One of two Microsoft global innovation labs, alongside Aachen in Germany, specialized in applied research and prototype development Development of global solutions for the group, ergonomics for products and services on the multinational & local market, voice services and content access in Arabic, usages & services for the region. Employees 1 High end embedded software design center 280 Cairo was chosen in direct competition with Central European locations, decision taken based on superior quality in Egypt Total number of employees including domestic and export work (June 2010) SOURCE: ITIDA 46

47 ITIDA s strategy framework from 2005 till 2010 ITIDA responsibility Essential enablers d system an nters education search cen National e res Local market demand Export growth Enterprise capacity building IT industry intelligence Innovation, research and development Human capital development Real estate (infrastructure) Telecommunications infrastructure Insourcing and mega companies (FDI) Legislative environment Multinatio onal suppo ort Unique focus placed on ensuring vibrant links with the education system SOURCE: ITIDA 47

48 Students graduate annually from universities with multilingual capabilities in 16 different languages Talent Annual University Graduates by Study Language 1 Italian 400 Spanish German ,200 1,400 Latin & Greek 414 French 4,150 6,000 Other Languages 2,400-3,200 English 88,000 95,000 1 Medium of teaching in graduation is in the respective languages. Note: Greek & Latin language is available however hasn t produced any graduates for the year 08/09. SOURCE: MCIT data; CAPMAS; IDSC; 48

49 Egypt ranks among top in global O&O standing in incremental headcount Increase in O&O FTEs Thousands, 2010 estimation CAGR Percent 2009 rank 2008 rank 1 India Philippines China Egypt 36 Russia Poland Malaysia Romania 9 Czech Republic 10 Hungary 11 Slovakia 1 SOURCE: McKinsey/EESTCom

50 Egypt s current ITO-BPO services revenue is USD 1.5 billion in 2010, driven by exports and ITO services Egypt s O&O Market Size Total O&O jobs in Egypt USD billions, 2010 Thousand jobs, 2010 Domestic 194 Export Indirect Direct 5x BPO/ Transactional Services ITO Services High-end product development and R&D Total Domestic vs. export jobs 50: SOURCE: Nasscom report. Team analysis 50

51 Egypt is the pioneer in ICT in the Arab World Government push to ICT sector by commissioning IDSC 1 over-seen by PM office. 1980s ICT export revenues of ~USD 250 million. 1990s 2000s Establishment of the Ministry of Communications & Information Technology (MCIT) 1 Information Decision Support Centre Strategy is currently under revision; $ 6 Billion is not fixed and may change SOURCE: ITIDA team; MCIT; industry experts 2010s Egypt aspires to achieve $ 5 Billion in exports revenues 2. Achieved goal of USD 1.1 Billion in exports revenue Egypt's key success factors for becoming a No.1 IT location 1970s First Arabic terminal ICT innovation hub since the 1960s. world-wide designed by Pioneer in localization IBM for an Egyptian (Arabization) gateway to the customer. Arab world. Establishment of IBM Early and substantial commitment research center. of Egyptian government to IT sector. 51

52 Egypt a great place to live and work Egypt has all these Cultural Diversity wonderful things. The climate At the crossroads of Africa, the Middle East, and the is gorgeous, apart from July and Mediterranean, Egypt is a great cultural mix. Its unique August. The things to do are great. heritage stretching back over 5,000 years combines with a The culture is interesting. The modern, forward-looking and progressive outlook. people are very open and friendly, Sights, Shopping, and Night life and they re fun- they are sort of Sights includes seven ancient wonders such as the pyramids, European facing. sphinx, also over 100 museums, mosques and historical -Joe Pape, BP buildings. Availability of various shopping malls that Schools and Universities are home to world class brand names. Egypt has 65 international schools teaching American, British, French, and German curriculums. Vibrant and varied nightlife - Operas, There are also eight international universities such as the theatres, cinemas, dozens of high-class American University in Cairo, German University in Cairo, restaurants and many bars and clubs. British University in Egypt and L Université Française d Egypte. All the schools and universities are internationally accredited. The schools offer a full range of qualifications, i from A levels l to International Baccalaureate. The universities offer bachelor degrees, master s, and PhDs. Even though in Cairo I m in a city of 20 million people, p I can walk around at any time of night in any area and I d feel absolutely safe. - Chris Larter, Hill & Knowlton Climate Winters tend to be mild, with sunny days and cool nights. Summers are sunny and hot with often cold breezes. Egypt is blessed with natural calamity stability from volcanoes, major earthquakes, and tsunamis. Quality and Cost of Living Cairo s cost of living i is well below that t of Eastern European cities. According to the latest Cost of Living Survey from Mercer, Cairo ranks the 87th city in 2010 index. The Mercer Quality of Living Survey 2006 and 2008 ranked Cairo higher h than any other city in Africa or India. 52 Business Env t

53 ITIDAs strategy framework (1/4) PRELIMINARY Pillar Initiative Description/examples Human capital development Innovation, research & development Management training High level IT professionals training Excellence centers Existing Under design Simulate multinational training programs for managers Cover broad disciplines (sales, marketing, business development, finance) Based on skill gap analysis and market requirements Ramp up every year based on market demand Simulate multinational training to train IT professionals on high demand jobs (e.g., ITI 9 month program) Potential for implementing specific you hire, we train program (at 80% hire rate) for specific skills required by companies Specialized in certain high potential domains (e.g., Data Mining and Wireless technologies) Incubators and Incubators for startup companies to assist with different issues in strategy and venture capital operations Venture capital funds to provide equity funding to young Egyptian companies Innovation Business plan competition Innovation community events in Smart Village 53

54 ITIDAs strategy framework (2/4) PRELIMINARY Pillar Initiative Description/examples Capacity building Local market demand Export growth Existing Under design Enterprises Tailored consulting for Egyptian IT companies, using local and foreign experts Clustering Encouraging M&A for Egyptian companies (partnership with investment banks) Financial Allow IT companies access to bank loans through loan default insurance support mechanism, provide cost subsidies for local companies SECC Certification programs for key areas (e.g., CMMI and COPC) NGOs Capacity Building for industry NGOs, co operation and relationship with ih different bodies (i.e., Etisal, Elabs, CIT, Itec) IT awareness Raise companies awareness of available IT solutions and educate industries on the value of IT to international competitiveness Ri Reimbursement Product cost reimbursement of % of SW to buyer after purchase is completed ltd SMEs Government support; government tenders to favor bids with high SME portion Promotion Develop relationship with top global consulting firms and analysts to position Egypt on global lmap Product Support and provide additional promotion for best products on the market champions Expatriates Engage Egyptian expats to help promote exports Outpost business Awareness programs for selected commercial attaches on Egyptian IT products, trade missions to select geographies 54

55 ITIDAs strategy framework (3/4) PRELIMINARY Pillar Initiative Description/examples Insourcing & mega companie s Multi national support Targeted insourcing Mega companies and FDI promotion Existing Under design Develop pipeline of target multinational companies Proactively market Egypt to these companies as an insourcing destination (including incentive packages) Targeting all industries not just ICT Establish specialization areas for Egypt Incentive system for foreign and local investors to create large companies to enable global market entry Know how and Multinational l experts assigned dto local lcompanies to transfer knowledge, transfer especially on management and system sides Promising Egyptian managers internship inside multinationals for one or two years Promotion and Participation in Egypt road shows and other promotion events marketing Egypt Day in multinationals HQ and other key locations to raise internal awareness Co exhibitions in regional trade shows with Egyptian business partners 55

56 ITIDAs strategy framework (4/4) PRELIMINARY Pillar Initiative Description/examples Industry and market information IT information Provide information and statistics on local IT industry centre local Implement export measurement system industry ICT industry skill database & talent pool statistics Local market sizing IT industry profiling Database of companies, products and contacts International market intelligence Existing Under design Data on market sizes and growth rates of different segments and geographical markets Global world trends and hot growth areas New technologies and offerings on the market Database of brokers and other sales channels MCIT task Task force to define methodology to identify and prioritize problems facing IT Legisla force stake exporters tive holders & reform Strengthen role of Conflict Resolution committee Subject Define best of breed country laws per selected area Experts 56

57 From an Arabic ITO centre, Egypt has developed into a global IT delivery hub BACKUP First Arabic terminal (screen) commissioned i by IBM, designed in Egypt Government commit-ment to ICT by com-mission of IDSC Development of Arabic speech recognition Establishment of Information Technology Institute (ITI) Formation of SECC (Software Engineering Competence Center) under MCIT MCIT launched IT strategy program IT research center established Formation of 1st IT venture capital company Formation of IBM research cen- ter (2nd one globally) Developme nt of bidirectionaediting software (IBM) Arabic OCR (Optimal Character Recognition) (IBM) Establishment of Ministry of communications and information technology (MCIT) Development of dedicated technology park (Smart Village) Establishment of ITIDA IT export revenues exceeded $300 MM Formation of public/ private partnership (Nile University) Formation of 2nd IT venture capital company (Technology Development Fund) Foundation for localization (Arabization) opportunity in Egypt SOURCE: MCIT; ITIDA; industry experts 57

58 Several initiatives are underway to enhance talent pool for the ITO and BPO sector (1/2) Existing Target groups Programme structure/skills covered Scale European language program MCIT professional training program New hires (entry level) Fresh university graduates Training on European language skills Enhances availability of suitable entry level talent for technical support with proficiency in French, Spanish, German, and Italian Launched in partnership with leading language institutes in Egypt (French cultural centre, Cervantes, Goethe Institute) Raises technical level of engineering graduates by enhancing basic IT skills ~300 trainees in 1st year across 2 languages Plan to expand to all languages and ramp up by 3 4x in subsequent years Two 3 year phases completed Phase 1: 5,000 trained; Phase 2: 3,000 trained MCIT customized University graduates Tailored programs based on proposals from companies Ad hoc based on each training and entry level on specific skill sets company s hiring program professionals Areas to be covered include Oracle financials, Microsoft ERP, Medical transcriptions, and soft skills requirements 3rd and 4th year University elective course 3,000 trained this year, EduEgypt Etisal ITIDA program university students Employees of ITO companies Experienced professionals from general labor market Curriculum covering English language skills, soft skills and IT technical skills (such as ERP and Microsoft technologies trainings) Modular program structure for employees of ITO companies, program for experienced professionals from general labor market Oracle technology and functional tracks (50:50 split), resulting in certification of trainees scaling up to ~10, for 2010 ~200 employees of ITO companies ~150 experienced professionals from the general labor market SOURCE: MCIT, ITIDA, ITI 58

59 Several initiatives are underway to enhance talent pool for the ITO and BPO sector (2/2) Target groups Programme structure/skills covered Scale Under design Existing ITI 9 month program Fresh university graduates, primarily of engineering background 9 month full time program covering soft skills, basic and specialized IT skills, kll certifying trainees as professionals in difference disciplines (including ERP, ES) Content directly sourced from and delivered by technology providers Currently ~800 trainees per year Advanced management program Industry professionals Industry relevant advanced management training and development services to multinationals and local companies in the ITO and BPO, to enhance capabilities and competencies of middle managers Planned for 2010 ~600 trainees in year 1, scaling up over 3 years SSME University students Collaboration between ITIDA, the Supreme Council of Universities and IBM to include services related sciences in Egyptian universities Elective courses in selected universities and faculties at the graduate level ~800 trainees Scaling up to 10,000 students over the next 4 years to cover all students in faculties of commerce, engineering and computer science. SAP program Employees of ITO companies Experienced professionals from general labor market SAP technology and functional tracks resulting in certification of trainees ~150 trainees SOURCE: MCIT, ITIDA, ITI 59

60 Package Implementation Remote Infrastructure Management Applica ation Deve elopment Egypt s Multinational l & Regional Industry Players in diverse IT service lines Technic cal Suppo ort Testing Engineering/R&D 60