The offshoring industry in Morocco

In recent years, Morocco has emerged as a destination of interest for multiple buyers and suppliers. Morocco’s ICT market has grown rapidly from US$400 million in 2001 to US$700 million in 2007. The industry employs more than 41,000 personnel, and is starting to emerge as a competitive alternative for service delivery to Europe and the Middle East.

Offshoring is an emerging segment in Morocco, with the country attempting to become a leading offshore center for the French and Spanish markets. Call center offshoring, in particular, has grown rapidly in recent years, with more than 185 call centers supporting ~17,000 jobs. More than 95 percent of these call centers are located along the Rabat-Casablanca axis. Other cities such as Marrakech, Fes, and Tangier are also fast emerging as call center destinations.

Several major international customer relations organizations have established centers in Morocco including large global players such as Client Logic, Sitel, and Teletech. Many others have set up centers in partnership with local operators such as Transcom with CBI and, Arvato Services with Phone Assistance.

Other global players that have set up their operations in major offshoring zones include Atos Origin, TCS, Capgemini, and Accenture. In addition, French majors such as GFI Informatique and BNP Paribas have set up subsidiaries specializing in the development and maintenance of computer applications, mainframe, and ERP systems.

Exhibit: Morocco provides a less expensive option for call center services than other locations in Eastern Europe

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Key location developments

Market activity

• Asian countries continue to witness significant offshoring activity in recent months
• EDS, an HP company, announced the expansion of its India operations with a new 100- seat-center in Hyderabad to provide application support services
• Logica inaugurated a new facility in Chennai to offer BPO, application support, and RIM services. With an initial capacity of 100 seats, the supplier plans to ramp up to 1,500 over the next few years
• Satyam set up a fourth delivery center in Pune having a capacity of 4,750 seats
• JP Morgan Chase, as part of its expansion plans, opened a Call center facility in Taguig City with a capacity of ~14,000 seats
• International Financial Systems (i-Financial) opened a development center in Vietnam to support the development of its international banking software modules
• ACS expands global operations with a new facility in Pasay City, Manila, which will initially employ more than 1,000 people
• Other regions also experienced moderate offshore activity as players continued to expand or set up new operations
• JP Morgan Chase decided to expand its operations and triple the headcount from 40 to 120 over four- years in its IT center in Chile
• Cognizant opened a delivery center in Budapest, Hungary, to serve the IT and BPO needs of Global 2000 companies and service customers in Central and Eastern Europe

Location promotion initiatives

• Countries continue to refine their investment strategy by unveiling new plans/policies and making active efforts to improve their offshore competitiveness
• PIKOM revealed a five-year plan for the IT industry with the key aim to globalize the Malaysian ICT Industry, make ICT services available across the industry, improve partnerships between government and industry, and create a national ICT repository of market intelligence. In addition, the association aims to maintain 150 centers by 2010
• Indian outsourcing service providers like Genpact, HCL, Accenture, Citigroup, etc. collaborated to establish a body called Other Service Providers Association of India (OSPAI) in close association with STPI, DOT, TRAI, and the Ministry of Labour, etc. to actively promote the outsourcing market and assist in policy changes based upon market requirements
• Nasscom, along with a technology and an e-learning company, decided to conduct vocational training to ~30,000 degree students of Pune University. The training model kicked off in October will provide IT and BPO skills in insurance, retail, etc. and will be expanded to cities like Bhopal, Mohali, and Lucknow after Pune

Overview of Location Optimization

Everest Research Institute provides actionable insight and visionary research on a wide range of offshoring issues through its Location Optimization practice (LO). Our Location Optimization research covers multiple regions and issues relating to offshoring locations, with a focus on helping companies assess the trade-offs of choosing between alternative locations. Our Location Optimization team combines deep subject matter expertise with broad analytical skills and insight into the global sourcing market, all of which are based on years of experience working in the offshoring industry.

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