Egypt: Can outsourcing survive these turbulent events?

Multinationals must weigh up risks of their increasingly global back-office operations...

Events have unfolded fast on the streets of Cairo. As the country feels its way towards a new political future, global firms with operations in Egypt are asking what the uprising means for them and for offshoring in general, says Paul Morrison.

In the past decade, Egypt has soared up the global outsourcing league tables. Strategically placed between Europe and Asia, with a large, young, educated population, it has offered fertile soil for over 100 multinationals such as Infosys, Oracle and Vodafone.

But with the stones and tear gas still flying, global outsourcers and back-offices operating in Egypt are faced with a crisis - in what is euphemistically known as business continuity. In short, can global companies keep their datacentres, call centres and service centres open for business, and if not, what next?

The two foundations of global service delivery are people and infrastructure. With millions exercising their democratic muscles on the streets of Cairo, many staff are either unwilling or unable to get into work.

Egyptian government's disruption of comms

At the same time, with the government flicking the switch on internet and mobile communications, basic office technologies have been disrupted - although older technologies such as telephone and VPN lines remain intact.

Riots in Egypt

The upheaval in Egypt and the Mubarak regime's response to it have already had a dramatic impact on Egyptian outsourcing
Photo: Globaltechfirm

This disruption has already had a dramatic impact on Egypt's outsourcing and technology community. Disaster and continuity plans are in full swing, and although still open for business, the priority is on keeping employees safe and routing critical work to other countries. Vodafone is reported to have routed a number of activities back to the UK.

Microsoft has redirected call-centre work out of the country. HP is asking staff to work from home. Wipro and Infosys have evacuated their Indian nationals. Global IT, call centre and back-office work has fundamental safety and infrastructure requirements to function, and at the moment, Egypt cannot provide them.

To tell whether this situation is critical for outsourcing and back-office work in Egypt, the key question is duration. At present, the crisis is one of short-term business continuity. Brand Egypt may be somewhat tarnished, but the...