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Egypt unrest threatens status as rising outsourcing star

Stephanie Overby | Jan. 28, 2011
It's been touting itself as an offshore IT services alternative to other countries

Most offshore outsourcing hot spots carry some degree of geopolitical or location-specific risk, such as the 2008 terror attacks in India and the current narco-violence in Mexico.

Yet many offshoring customers do a poor job of monitoring IT service supply risks on an ongoing basis, says Vashistha. "We recommend ongoing monitoring of country, city and supplier risks."

"The concern [over geopolitical risk] has started to increase in last two years or so," Ramesh says. "The terror attacks in India were a big wake-up call especially for organizations with a large offshore headcount."

Steps to Ensure Continuity Now

For those companies with operations in Egypt, the biggest challenge is ensuring service continuity over the next few days. "We're heading into weekend so the impact may be less severe because demand would naturally die down," Ramesh says. "It's important to have robust disaster recovery and business continuity planning--not just the documents, but knowledge of how to execute against it, at what point to pull what trigger."

Some steps for affected customers to take in the short term include:

  1. Ensure the safety of all employees in the country.
  2. Prepare for work stoppages. Related labor strikes could last as long as a week, says Vashistha. In addition, the government could impose curfews or other restrictions on movement. "Most companies have some sort of network back-up, whether it's a second line or satellite so that's not a dramatic concern," Ramesh says. "In the services industry, the biggest concern is can you get people to get in center to do the work."
  3. Move, or prepare to move, mission critical work to an alternate location temporarily.
  4. Review disaster recovery and business continuity plans and begin to take the appropriate recovery steps outlined.
  5. Update future plans with lessons learned. Once the situation has stabilized, put processes in place to regularly track geopolitical risks of all offshoring locations and stress-test disaster recovery and business continuity plans.


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