The $1 Billion Outsourcing Industry in Saudi Arabia

The outsourcing and shared services (OSS) industry made a huge impact in the Middle East when it was introduced in the 80s. This disruptive technology changed the course of how businesses operate in Saudi Arabia and supported many companies in their expansion into the Kingdom.

Saudi Arabia is the second most popular destination and fastest growing market for outsourcing and shared services providers in the MENA region. With approximately a quarter of all shared service centres in the region and the majority of outsourcing providers based out of the Kingdom.

According to analysts, the OSS industry in Saudi Arabia is worth US $1 billion; comprising of information technology outsourcing worth US $807 million (2018) and business process outsourcing worth US $194 million (2018). The market is forecasted to experience rapid growth, with key drivers for companies being cost reduction and the ability to focus on core competencies.

Beyond this, companies are finding that they must do more to achieve a competitive advantage. This includes, improving performance speed and quality, reduced capacity gaps, increased agility, access to intellectual capital, the ability to reach new markets and accelerated innovation in the company. Through outsourcing and shared services, companies are able to tap into economies of scale, pooling of resources and greater expertise to achieve this competitive advantage.

Companies now have access to technology they wouldn’t have had the scale or budget for before, such as cloud computing, robotic process automation and artificial intelligence. The technology and services companies are able to access through OSS help improve their products to consumers and reach a competitive advantage.

These technologies can be utilized in multiple ways and across departments with most companies choosing to outsource immigration, IT, finance and HR although essentially any function can be outsourced.

Companies starting their journey with outsourcing can use it as a way to enter new markets and test the waters. Marketing outsourcing can be used for market research and sales outsourcing can be used as a way to reduce the time to market. For companies looking to expand into or grow in Saudi Arabia, outsourcing and shared services could be the component that gives them a competitive advantage.