IBS Journal May 2016


35


current level USD 30, and hence businesses are looking for cost optimisation and innovative operating models to sustain their profitability.


Transformation opportunities in the Middle East


The nature of services in IT outsourcing, business process outsourcing and shared services is likely to have a distinct flavour for each developing and developed market. Business process outsourcing is likely to stagnate because companies that faced constraints in adopting business process outsourcing are likely to continue experiencing the same constraints (such as local language requirements, regulatory hurdles and the lack of scale). However, IT outsourcing and shared services are likely to experience higher adoption, promising the benefits summarised in the picture below.


Factors favouring IT outsourcing wave


• Technology adoption: Customers’ expectations on service experience are changing due to the increasing number of channels such as mobile. Businesses are rapidly embracing technology to widen their channels of distribution and enhance customer intimacy. Technology talent is not easily available within the region and hence the region has to source talent from elsewhere.


• Regulations: In the past, the need for technology talent was met by hiring immigrant talent, but immigration rules are tightening in many regions and have made this more difficult, from both an economic and regulatory perspective.


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