The Outage and The Impact

Despite the extensive efforts that the Egyptian government made in the past years to develop and promote the adoption of technologies, the shutdown of communications services for a full day and the Internet for the first five days during the Egyptian revolution had a great economic impact on most services nationwide. The Organization for Economic Co-operation and Development (OECD) estimated at least $90 million USD in losses in the telecommunication sector alone during the five days of the internet shutdown. This amount refers to lost revenues due to blocked telecommunications and Internet services; averaging $18 million USD per day.

Egypt has other sectors that depend on Internet and communications, including tourism and banking. Although it is difficult to conclusively determine the losses in the tourism sector, the banking sector suffered huge losses. All online banking and e-commerce services went down, ATM machines were almost non-functioning, and credit card payment facilities at local stores and
markets were totally suspended.

The IT outsourcing firms in Egypt are a good litmus test of the state of business continuity management in the region. The IT outsourcing business line grossed $1 billion USD in revenues in 2010 (or around $3 million USD per working day). Most IT outsourcing companies were affected in two different ways: medium-sized call centers, mainly representing non-governmental and/or non-critical domestic services, went totally offline. Other critical operation call centers were fully operational, such as ambulance and fire service and
military services. What follows is a comparison between two different crisis response approaches of two big names in the IT outsourcing field, each with two different geographical locations.

Serving national vital operations, Company A decided to continue operating from its headquarters and main branch by keeping employees literally living onsite, with food and sleeping
facilities in place. As the company is located at Egypt’s prime Communication and Information Technology Cluster and Business Park, the area was totally secured and governed by the military forces during the days of the revolution.

As for Company B, a giant international company, the company headquarters was equipped with a backup satellite Internet connection to serve its international overseas customers during crisis. However, the company decided to shift its main operations to other branches in different countries. The business continuity plan stated that key employees should be ready to travel to other countries should the headquarters becomes inaccessible. The plan was updated to include the addition that key employees should be ready to travel to other countries at any moment if communication went down for a certain period of time.

In brief, the long-term impact of the Internet and communications shutdown on Egypt’s economy is hard to assess. However, this incident reminded business owners why proper business continuity
management is a crucial driver in this region for both international and local business entities. Additionally, it urged the Egyptian government to form a committee to prepare an Egyptian business continuity standard, which is considered to be a step forward in increasing the BCM awareness in Egypt and within the region.

 

References:
Egyptian Cabinet- Information and Decision Support Centre
OECD—Organization for Economic Co-operation and Development

 

Waleed Hammad is the President of DRI MENA, he is also the Co-founder & Managing Director of PROXC Consulting (a leading business continuity management company in the Middle East). He has more than 12 years experience, delivering consultancy
and training to professionals in the Middle East in the areas of business continuity management, risk management, and project
management. He also is a member of the committee responsible of preparing the Egyptian BCM Standard.

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