Outsourcing and shared services model has been popular amongst the developed nations since 1989. Owing to the various benefits such as reduced costs, lower work burden and cheap labour availability abroad, outsourcing has gained credibility across the globe. Global IT outsourcing market was valued at USD 527 B in 2021 and is expected to reach USD 682 B by 2027, registering a CAGR of 4.13%, during the period of 2022-2027. Over the years, outsourcing has evolved in the way businesses are conducted and now nearshoring is gaining prominence.
Nearshoring refers to outsourcing or subcontracting a part of or entire business to a nearby country. This involves doing business with a third part vendor mainly to cut costs, difficulty in hiring the right talent in home country, to save time and ease communication. Owing to closer proximity, nearshoring offers better products and services and enhanced supply chain operations, increased inventory and quality control and improved customer services .
ICT industry in the Middle East
Middle East is becoming a popular destination for outsourcing as the location and accessibility of the country is very strategic to the European and the UK. The pandemic has forced the region to shift its vision from an oil exporting economy to a knowledge-based economy. The region’s priority is to increase the contribution of the digital economy in the national economy, promote smart infrastructure, and enhance the digital readiness of the government to ensure business continuity. The region’s digital economy sector is focusing on creating a financial cooperation and freelance economy, digital markets, sharing economy, digital content economy, and information and data economy.
The ICT market in the Middle East is expected to reach USD 95 B by 2025 from USD 84 B in 2020, growing at a CAGR of 2.4%. 5G, classrooms of the future, eGovernance, next-generation healthcare, smart cities, smart mobility, nd smart tourism are key focus areas for governments and enterprises. Technology wise, 5G, AI, IoT, Cybersecurity, Gaming and eSport are expected to have greater growth prospects in the region. Also, the technology market for AR/VR, blockchain, industrial robots and 3D printing is expected to boom in the coming years.
Further, cloud computing adoption has risen within the region, and according to IDC, the total cloud spending by public and private entities is expected to reach USD 2.5 B by 2025. VR and AR markets are forecasted to contribute USD 4 B to the economy by 2030. IT services is emerging as the fastest growing segment in the region followed by the IT software segment. Software and Web Developers, Programmers, and Testers are the most sought-after jobs in the region.
Nearshoring in the Middle East
The Middle East is expected to be a preferred destination for nearshoring. It is building on the desired capabilities of robust IT infrastructure to complement the nearshoring business. Nearshoring in the region is expected to reduce risks associated with strict regulations while shortening lead time to market with increased capacity.
Key reasons for the Middle East gaining prominence for nearshoring are:
- Easily accessible: The Middle East is easily accessible from all the directions and has short flights to and from these countries. This allows one to visit the outsourced team and have real-time collaboration quickly and efficiently. Middle East’s strategic location enables it to work in similar time zones with the European and UK counterparts. Simultaneous working eases remote team collaboration and enables efficient communication. It further becomes easy to plan meetings and collaborate on tasks.
- Reduced costs: Wages are some of the highest expenses that companies must deal with and that is why nearshoring is preferred. The Middle East average salary for a developer or any ICT specialist is lower as compared to western European countries, UK, and the US
- Ease of doing business: UAE leads in the Middle East and Arab region in World Bank’s East of Doing Business
ranking 2020. It ranks 16th in the global ranking of 190 countries. UAE is making the starting of a business less expensive by reducing the fees for business incorporation, ease of paying taxes and making trading across borders easier by reducing the time to export by fully digitizing certificates of origin. Further, Saudi Arabia is the most improved economy in Doing Business 2020. The Kingdom’s “Vision 2030” plan for long-term development encompasses a variety of legal and structural reforms.
- Talent pool: Middle East is known for its superior higher education in technology and mathematics and has a huge talent pool of ICT professionals. Further, the people are fluent in speaking English, making it easy to do business.
Owing to the various benefits offered by UAE, Saudi Arabia, Qatar, the Middle East becomes an attractive destination for investment. The creation of Dubai Outsource City (the only business community in the Middle East dedicated to Outsourced Shared Services) has attracted many outsourcing players to bring their operations to the region. The region has over 50 outsourcing providers, offers ease of doing business, has a diverse pool of ICT experts and has government friendly investment options, making it a viable destination to nearshore
Way forward with Xebia
Xebia in the Middle East offers nearshoring capabilities to nearby countries. It has capabilities across a wide range of services such as AI, ML, Cloud Computing, and Data Analytics allowing one to optimize costs. It helps customers design and build low code software platforms and applications and covers a broad spectrum of software requirements including software development, digital assurance, testing, or security. It further provides a one-stop shop for full stack digital transformation covering platform engineering and continuous delivery, cyber security, product management and quality improvement solutions and services.
» Platform as a Service (PaaS) covers the development, testing, and deployment of business applications in the cloud
» Software as a Service (SaaS) allows you to access non-Microsoft applications like the Salesforce Customer Relationship Management (CRM) or Microsoft Office 365 through a web browser, without any local installation
» Infrastructure as a Service (IaaS) enables you to store, manage, process, and analyze data using virtual machines
Alongside this flexibility, Microsoft Azure also relies on open source standards, allowing your developers the flexibility to use the existing code base in a variety of languages. It offers the convenience of a subscription-based, pay-per-usage model, allowing you to pay only for the services consumed and bypass hefty capital outlays and recurring maintenance. It is especially beneficial for the small and mid-scale players that are targeting to affordably migrate their workloads to the cloud and compete at scale with their larger enterprise counterparts. Similarly, Microsoft Azure is ideal if you want to retain your mission- critical processes on-premise and offload the rest on the cloud using a hybrid approach. Presently, retail, healthcare, and financial services industries rely on Microsoft Azure Cloud transformation. Here are a few reasons why your business, irrespective of its domain, should do the same to reinvent IT and maximize its bottom-line performance.
Benefits of Azure Cloud Transformation
Benefits of Azure Cloud Transformation
Microsoft Azure offers powerful Identity Access Management (IAM) with Microsoft Active Directory services to ensure that only authorized users can access your business information. With IAM available in Azure, you can implement agile access control and ensure the confidentiality of your business data.
Microsoft Azure has provisions for using user-friendly frameworks like ASP.NET and popular languages like C++ and C# in developing your cloud applications. It is easy for developers to leverage their experience and past knowledge to work on the platform rather than lengthy reskilling.
Microsoft Azure is a highly scalable cloud platform, allowing you to develop, test and deploy applications and services for as little as 10 to millions of users worldwide. Azure Storage offers a secure and performance-oriented database for your applications in the cloud. Further, you can change the configurations on-demand to avail more computing power for your cloud applications.
Microsoft Azure supports NoSQL and SQL data services with an unmatched capability to deep dive into your business data and harness insights for your key decision-makers. While considering Azure’s role in building an enabling business intelligence culture for your organization, it is also a leading cloud provider in offering data-driven capabilities like Blockchain as a Service (BaaS), Machine Learning, and Cognitive Computing.
Azure is designed with Security Development Lifecycle (SDL) and best practices that support security assurance and compliance requirements developed in-house by Microsoft. It consists of the philosophy of protecting the confidentiality of your data, processes, and services in the cloud. Microsoft Azure comes with comprehensive coverage of over 50 compliance offerings and is used extensively by the United States (US) government agencies for delivering services. Further, Azure has been the first to embrace the International] Organization for Standardization/ International Electrotechnical Commission (ISO/IEC) 27018:2019 standards for Cloud Security. Microsoft is currently spending $1 billion on protecting your data in Azure speaks volumes about its commitment to safety.
Microsoft Azure comes packed with unmatched hybrid capabilities allowing you to transition smoothly between the on-prime and a cloud environment. With Azure, you can leverage a broad array of hybrid connections between domains, including Virtual Private Networks (VPNs), Content Delivery Networks (CDNs), Memory Caches, and ExpressRoute connections, to ensure maximum availability of your applications and services.
Organizations use a broad array of virtual tools and third-party applications in their day-to-day operations. Therefore, it is likely that most of them are operating in silos compelling the employees to access multiple system domains for a single task repeatedly. Microsoft Azure simplifies this by integrating all tools and digital resources around a cloud-native platform.
Microsoft Azure can be used as a cloud database for your on-premise applications. It supports open standards like HTTP, XML, and REST. Also, Microsoft Azure provides SDKs for Java, Ruby, and PHP for your applications written in those languages.
Why Outsource Azure Cloud Transformation?
While the cloud is a buzzword today, many want to achieve it, primarily out of hype. However, for you, moving to the cloud should be a conscious decision that will enable you to further your institutional goals and own your target market. Instead of improvising by using your in-house resources, you can consider outsourcing the job to a competent Azure Cloud transformation partner with the required experience, perspective, and skillsets to maximize your cloud dividends.
An Azure cloud transformation partner is an end-to-end service provider that can guide you through the various process stages, including discovery, solution architecting, implementation, rollout, post-implementation support, and change management. Today such service providers are available with highly customer-centric and value driven offerings.
For instance, Xebia, an Azure Cloud transformation partner, has been moving its customers to the Cloud since 2014. It offers a broad array of services, including Assessments & Audits, Cloud Readiness Scans, Cloud Accelerator Program, Cloud Control, and so on, to ensure that you are secured and compliant in all phases of your journey to Azure. Connect with their consultants to find out how they can help you unlock the outstanding benefits that Microsoft Azure offers.