DUBAI: The outsourcing sector is an important pillar of the UAE’s economic diversification and among the fastest-growing sectors in the country with a compound annual growth rate (CAGR) of 11.2 per cent, according to the ‘UAE Outsourcing Market Outlook 2016-2020’, a report by International Data Corporation (IDC).

The report estimates that operational management revenues of business process outsourcing (BPO) and cloud services in 2017 are at US$876.9 million (Dhs3.2 billion), with projections to reach $976.1 million (Dhs3.58 billion) in 2018 and US$1.195 billion (Dhs4.38 billion) in 2020.

IDC’s ‘UAE and Saudi Arabia BPO Market Size and Forecast, 2015-2021’ report points out that the spend on local business outsourcing has grown by 11.7 per cent - from US$324 million (Dhs1.19 billion) in 2016 to US$363 million (Dhs1.33 billion) in 2017. The number is expected to hit US$404 million (Dhs1.48 billion) in 2018 and be valued at US$562.8 million (Dhs2 billion) by 2021.

The report notes that key customers of the local outsourcing market are from the banking, financial services, transport, communications, media, retail, and support industries. In terms of competencies, call centre services account for the largest share at 65 per cent and are set to dominate the market for years to come. Human resources rank second with 14 per cent, followed by finance, accounting, and employment services that are slated for moderate growth, as companies continue to prefer handling these functions internally.

Ammar Al Malik, Executive Director of Dubai Internet City (DIC) and Dubai Outsource City (DOC), said, “For years now, the world has been moving away from traditional outsourcing, shared service models and business systems management. The UAE is now globally recognised as a thriving hub for business, an achievement which is aided by its rapid technical evolution and the ready availability of top talent.

Dubai Outsource City is home to around 140 companies operating in the sector that serve the UAE and the wider region. The country’s strategic location at the crossroads between Europe, Africa, and Asia enables our business partners to meet the requirements of these diverse markets.” He added, “The outsourcing sector in the UAE is maturing, driven by continuous improvement in the quality of services, technological developments, and the student part-time employment regulation by the Dubai Creative Clusters Authority which provide the opportunity for university students to work part-time.

WAM