Born in the UAE

Injazat, the Abu Dhabi based IT outsourcing company, is setting itself up to become one of the largest employers of Emirati IT professionals. Colin Edwards talks to its chief executive officer, Ibrahim Lari, about his plans.

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By  Colin Edwards Published  March 12, 2006

|~|lari200.jpg|~|Lari: Within a couple of years the company will employ 1,000 with 70% of them being nationals.|~|A year ago, Injazat, a joint development between global outsourcing giant EDS and Mubadala Development Company (MDC) - the Abu Dhabi Government's investment vehicle - started life with a handful of people.

Today, it has more than 300 employees, 50% of whom are Emiratis. Within a couple of years, Injazat's CEO, Ibrahim Lari, expects the headcount to top 1,000, with 70% of them being nationals.

But he dismisses any threat that such an emiratisation strategy could have on the business's competitiveness at a time when the company is beginning to flex its marketing muscle. Injazat is planning to expand beyond its existing government and quasi government user base and move into the private sector both within the UAE and in other GCC countries.

Such competition is particularly strong from India and China, where average entry-level outsourcing salaries, according to analysts neoIT, are around US$5,400 compared to US$31,500 in Ireland and US$14,100 in Hungary.

"We are competitive and we will remain so even though competition is growing. For us, development of UAE nationals and training nationals is important, and we believe it's an approach that will deliver a better service and differentiate us in the market while keeping our costs competitive," he says.
Neither does he intend to sub-contract development work - specifically coding - to the sub-continent, preferring to keep such tasks local.

"Outsourcing development projects to somewhere like India is not being considered. We are using the workforce within our department and we have no intention at this time to go outside the country for development. However, we will work with local companies as a complement to our own resources. There are a lot of companies locally available to provide services such as development whether it is a big project or a small development," adds Lari.

Injazat's focus in the months ahead is to get major private sector wins under its belt. Buoyed by just having rolled out the region's largest outsourcing deal - the Dhs400 million-plus (US$109 million) Abu Dhabi Water and Electricity Authority (ADWEA) contract - Lari is confident that private sector negotiations in the pipeline will soon come to fruition.

"If we are government or quasi government focused currently, it is because there is a requirement for our services in this sector. We don't want to be seen as a government service company. We want to have a very wide portfolio in the market. We have, via our partners (EDS), huge expertise in different sectors - finance, energy, transportation, healthcare. Today there is a lot of market demand coming from the government area, but we are looking at a lot of other contracts in the private sector and we have some very strong interest currently."||**|||~|lari200a.jpg|~|Lari: EDS was considered the best option to work with.|~|While it claims Dolphin Energy as a 'private sector' win, the fact is Mubadala, which owns a 60% share of Injazat, has a 51% stake in Dolphin. But Lari says the experience the company is getting by providing IT support services to Dolphin - the management, maintenance and monitoring of the entire IT infrastructure - is standing it in good stead.
The company is also planning to expand beyond the UAE. Initially, according to Lari, this will be in Oman and then Qatar.

"As in the UAE, we will be employing local nationals wherever possible. We see this as differentiating ourselves from our competitors. So, wherever we expand in the region we will adopt the same strategy. If we go to Oman we will employ Omani nationals. In Qatar it will be Qataris."

Much of this proposed expansion is being enabled by its partnership with EDS, whose expertise, specifically in the energy sector, Injazat can leverage.

"EDS owns 40% of Injazat, and brings 40 years of IT knowledge to the company giving us access to the expertise of 120 000 employees worldwide. EDS has a huge knowledge base in the energy and power sector that we can draw on in addition to the EDS specialists currently based at Injazat," says Lari.

Even so, its alliance with EDS was considered a bit of a leap of faith when the creation of Injazat was being investigated in 2004. As a company, the once global leader of the outsourcing market had hit its nadir and was struggling with cash flow, bad debt and major client problems to such as extent that Moody's Investors Service had rated the company's bonds as 'junk'.

The company has managed a phenomenal financial turnaround over the past year with the value of signed contracts leaping 83% and the company moving into profitability again.

Lari says, "When MDC originally looked at IT outsourcing and forming a company, it investigated the market to see who has a wide knowledge base and could work with MDC to build this company. An evaluation of different companies was carried out. The result was that EDS was considered the best option."

Forrester Research's Euan Davis comments in a recent report that EDS continues to recapture market momentum. "The firm's multiyear recovery plan launched in 2004 has clearly helped to restore confidence in its brand. Forrester gives the company credit for executing the first two steps of a three-year recovery program, but this year will truly test how much growth the company can achieve."

Much of its resurgence is attributed to what is called its Agility Alliance strategy whereby it trades with a group of vendors that essentially do not compete with it in the outsourced systems management arena. The group consists of Sun Microsystems, Microsoft, Dell, EMC, Oracle, Cisco, SAP and Siebel. In other words - not IBM and HP. It is not necessarily a strategy that Injazat will be following.

"If a client requests a certain brand of hardware or software, then we have no problems with that. We will go with what our clients want. We want to build a company with its own identity and culture and way of doing business - a standalone company with its own identity and services," concludes Lari.||**||

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