Intelligence

Destination Outsourcing

“Listen first, then sell,” writes Timi Nadela, in her book, Get To The Top: It’s About The Heart Sell, Not The Hard Sell. And bearing in mind her experience as a senior business development professional working with Fortune 100 companies such as American Express, JP Morgan Chase, Delta Air Lines, she seems to know her subject.

Do emerging Europe locations listen to the needs of prospective investors? My observation is that they more frequently talk at those business people than they talk to them. Just imagine a location pitch at a conference — the same power point presentation regardless of the sector discussed or of the country those investors represent, always emphasising the strategic location as one of the country’s strengths.

A bit confused

David Haigh, the founder and CEO of Brand Finance, tells me that audiences from other geographies often lack clarity on what differentiates emerging Europe’s nation brands from each other. “Governments, agencies, and trade bodies in charge of managing nation brands from the region need to rigorously evaluate their countries’ strengths and weaknesses as well as the resources they have available to market their nations’ unique selling propositions effectively,” he says.

On top of that comes confusion regarding whether to promote a region, a city or the entire country. I spoke to Elias van Herwaarden, EMEA service leader for global location strategies at Deloitte’s Brussels-based Centre of Excellence for Corporate Site Selection and Foreign Direct Investment Services. He says that from an investment promotion agency’s perspective, each investment project counts and individual regions are as crucial as the entire country. “But of course, there might be huge differences between the cities, and their value propositions should reflect that,” he tells me, citing the examples of Bratislava and Košice or Prague and Brno.

“There are cases when the potential investor is interested in getting an analysis of up to three countries in the CEE cluster and then select cities. There is also an approach, which is becoming more popular, to start the location analysis with a selection of cities within the CEE cluster or even compare cities from the global selection. The main driver though, is the overall strategy on target operating model considered,” says Violetta Małek, managing partner at Gekko advisoryNOW and formerly director, management consulting at KPMG Poland.

What really matters

Globalisation and advancements in technology are making it less of an issue (in terms of geography) in which country the work is placed, as communication channels are ever-improving — as long as the primary safety factors such as the lack of earthquakes or military conflicts are ticked.

“What is critical is access to ongoing resources like graduates or ably-qualified people, the steady supply of future skills like IT, design-thinking, programming etc. On top of that, considerations like how easy it is to do business in the country, how supportive is the local municipality — even looking at capabilities like do they have an international airport with regular daily flights, or fast broadband,” says Tom Quigley, director of outsourcing at Emerging Europe.

Till Hahndorf, managing director at German BW Business Bridge, which identifies and certifies high-quality ICT product and service offerings for the German market, shares Tom’s view. “For a potential buyer, it generates little value to meet a group of companies whose only common capacity is that they all came from the same country. Let’s value domain focus over geographical focus or the actual solutions’ content over where the solution comes from,” he tells me.

Still on the rise

Interestingly, emerging Europe keeps on strengthening its position on the outsourcing map.

“Our clients are still very bullish on CEE,” says Charlie Aird, global leader at PwC Shared Services and Outsourcing Advisory and Business Services Transformation. Avinash Vashistha, the founder and board member at Tholons, admits that the region might not be the cheapest but its strength is the talent and the quality delivered.

And increasingly more countries see their potential as an outsourcing destination, as far as business process outsourcing and shared services or research and development centres and ICT are concerned. Over the last six months, I have spoken to at least half a dozen government representatives who tried to convince me that their location is excellent for business services.

“The main part is advertising and making people understand that the capability is there,” Charlie tells me.

“Perception is key because people don’t like what they don’t know,” Elias says, and gives an example of Poznan in Poland, which was unknown several years and is now one of the leading BPO/SSC destinations in the country.

Consistency needed

“But that requires work. You need to take part in conferences and seminars, and before you can sell your location, you need to elicit from potential investors and consultants what they know about it, what their concerns are and what they are looking for. Most importantly, listen to them. Then you need to sit down and look at your strengths — how you can use them for your benefit, and at your weaknesses and see how you can mitigate them,” Elias adds.

David tells me that the recipe is simple: work out what you can promote, who you want to target, and how to do it cost-effectively. “The difficulty, however, lies in garnering the universal support of different political, social, and business stakeholders within the country to ensure that all identify with the strategy and adhere to it in their marketing and communications activities,” he adds.
And if you are service providers, join your efforts with other vendors to change the perception or raise awareness about your capabilities.

Kerry Hallard, president of the Global Sourcing Association, shows Ukraine and Romania as examples. “Few people know that Ukraine is a significant player, the potential it has as a destination to set up in, nor the strength of Ukrainian service providers. There are some key service providers, all battling one by one to raise the profile of Ukraine. Certainly, there is a general awareness of Romania as an outsourcing destination, amongst the most critical section of the sourcing community — the buyers, but the fact is that the country lacks real presence in the UK in this area on a macro level,” she tells me.

Better together

Avinash advices taking this joint approach to another level. “There would be a lot of power of having a more regional collaboration,” he tells me.

Tom Quigley thinks it makes sense as buyers or investors will typically look at a region first, and then country and then city. the reason for this is that they want to understand the political, economic, social and technological environment of the broader region. “The region is stronger together and countries can complement one another, thus serving buyers and investors better with your service or location,” he tells me. “I was at the World Economic Forum in Davos this year and the region is not visible there,” Olga Grygier-Siddons, CEO at PWC Central and East Europe, adds. “We do need to come together to be visible.”

As Farshad Asl, the author of The “No Excuses” Mindset: A Life of Purpose, Passion, and Clarity, wrote, “selling is serving, helping others find solutions, impacting lives positively with passion and integrity.”