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Why Emerging Europe is the New Darling of Outsourcing

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In a world where the impact of global market forces on businesses can be ruthless and unforgiving, strategic partnerships are becoming increasingly driven by hard economic necessity. The notion of seeking and finding a compatible partner then, where a meaningful relationship can truly flourish and be both rewarding and fulfilling for both sides may seem somewhat romantic to many.

Even so, in one corner of the world a new outsourcing partner of choice is emerging – in defiance of the harshness of global markets and positively thriving despite the spectre of Brexit and wider global protectionism. Indeed, this bold new protagonist is becoming more attractive as its offering matures, enabling it to present itself as strong, reliable and adventurous, with room still to grow and further develop.

Yes, while the Central and Eastern European (CEE) region may not yet be of the size and scale of India as an outsourcing delivery destination, its progressive nature and rich talent pool of highly educated resources, together with a culture embedded in innovation and matched with the desire to deliver service excellence across the STEM (Science, Technology, Engineering and Mathematics) industries, is gaining increasing recognition across the UK, German, Nordic and US outsourcing markets – and rightly so.

There are a number of factors converging to make the CEE region stand out.

Language Skills and Education

The education system in the region produces a wealth of engineering and technical skills, which makes it the go-to place to look for very specialised technology and software development skills. What’s more, Central and Eastern Europeans also have an innate ability to learn foreign languages, a useful trait for Western companies with increasingly global supply chains and customers.  Poland, Bulgaria and Romania, for example, not only all provide access to excellent technical skills but also linguistic capabilities –  with some reports suggesting that 98 per cent of all Bulgarians speak a foreign language and four out of every five Romanians also speak English.

Culture

Simply put, the CEE region is better equipped for some types of projects and processes that require close cultural alignment with Western Europe. For example, European employees feel more comfortable providing valuable input to the development of projects than in many other parts of the world, a clear advantage now that we operate in a world of perpetual technological change; these people are more likely to question and challenge what they are asked to do, all of which helps to deliver higher quality, more robust end-products and services.

Government support

Countries such as Poland, Ukraine and Romania have implemented substantial tax incentives for businesses to set up shop in their territories, with lower labour costs and rates of attrition in comparison to far-shore destinations. They have also cut through reams of bureaucracy, making it easier to transact business.

Time Zones

A determining factor these days is that many critical projects are increasingly developed and implemented in an agile environment, and in real-time. This means that physical proximity is becoming more and more relevant.  As go-to-market strategies become much leaner, with products and services improved and updated as customers use and socialise with them, so closer aligned time zones will allow teams located in different countries to work with their outsourcing partners almost simultaneously – providing a clear competitive advantage.

As other delivery destinations wrestle with a myriad of issues ranging from work visas, rising labour costs and high attrition rates to divisive or obstructive cultural nuances and unsympathetic time zones, the Central and Eastern European region quietly continues to romance some of the world’s most dynamic and innovative brands back to its’ place. Global giants such as Google, Amazon, Coca-Cola, Vodafone, Nike and Adidas have, among others, all poured into the region in recent years. Even Indian outsourcing giants have taken advantage of the local talent, with companies such as Wipro having long-established (as long as a decade ago) operations in the region.

Yes, it might still have a few traits of its own that need to be ironed out, but as things stack up in the current political, economic, social and technological climate, the CEE region  could well be the dream partner that many businesses are looking for.

Sourcing in Emerging Europe is a wholly independent programme providing impartial information and education about the outsourcing capabilities of the countries comprising the CEE region. Attend our events in London (March 2018) and Copenhagen (October 2018) and take away a highly-informed blueprint for effective sourcing in 2018 and beyond.

Note: this event is free for buyers, and if you register before the end of January you may be lucky enough to obtain a VIP ticket providing you with exclusive access to premium content and other benefits.

About the author

Tom Quigley

Tom Quigley

Tom Quigley is director of outsourcing at Emerging Europe and the owner and chief marketing officer at QUIGLEYMEDIA. He has 29 years corporate enterprise experience across operations, communications and marketing. He joined the National Outsourcing Association (NOA) in March 2016 as marketing director and then assumed the role of chief marketing officer for the Global Sourcing Association (GSA).

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