Outsourcing market in Eastern Europe heats up

Recent reports reveal that Poland, Europe’s undisputed outsourcing leader, is now facing new competition from countries like Romania and Ukraine. This was disclosed by a report published by Jones Lang LaSalle, a real estate services company. These countries are stepping up their position in business process management (BPM) by the virtue of lower wage costs and an increasing range of services.

Eastern Central Europe is now witnessing the rise of new markets for BPM and KPO (knowledge process outsourcing). Though traditional BPM market has showed signs of decline in these countries as well, these new emerging BPM areas have shown good progress.

Lower wages is the main reason behind the growth of BPM and KPO industry in Romania. Now the country stands at ninth position among the major offshoring locations, according to Jones Lang LaSalle. The country is creating a lot of job opportunities in BPM sector and it is nearing Poland in terms of growth also. In fact the country had created 11,438 jobs in BPM sector in the last four years (2008 to 2012). The most surprising factor in this is that, jobs created by Romania are only 2,000 less than that created by regional leader, Poland. Report concludes that major players in BPM industry, including Adobe and Intel have opened at least one centre in Romania.

Emerging Destinations

The growth of BPM in Romania has motivated companies to search for new locations where they can have easy access to an educated workforce. These searches for easy accessible locations made great demand for University towns including Targu Mures and Craiova.

The emerging locations with new or existing processes are often short listed by companies. In a recent development, the firm Big Blue had announced their new security operations centre in Wroclaw.

During past years Romania had rendered only voice based operations for BPM sector. Now they are delivering a wider range of IT outsourcing services to offset their slow down in the traditional BPM sector for the last four years.

Apart from Romania, Ukraine is also posing severe competition for Poland. The revenue figure obtained by Ukraine from BPM is about $1bn in the last fiscal 2011, which is about 10 times as that of last decade.

Anyway, Poland remains Europe’s outsourcing leader.  The country has 370 centers each for carrying out operations like BPM, shared services, and research and development. These centers offer employment to about 90,000 people of the country. Other than this the country also opened local centers providing services to Polish corporate, providing an annual employment growth rate of 20%.

Other countries which are possible to emerge in BPM in Central Europe include Czech Republic, Slovakia and Hungary, since they are showing up a positive trend in outsourcing developments.

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