In 2007, Europe saw a considerable increase in their outsourcing activities. Of about $12 billion in mega deals awarded globally in 2007, over two third (68 percent) were closed in Europe. The demand for offshoring among Western European countries rose by 50 percent from 2004 to 2006, with Eastern Europe being a favorite destination. McKinsey estimates that offshoring operations in Eastern Europe could triple, to more than 130,000 jobs, from 2005 to the end of 2008. Dell, IBM and Morgan Stanley in recent times have outsourced their operations to Eastern Europe. At present, Eastern Europe’s outsourcing business is approximately $2 billion, which is still not a big fraction of about $386 billion global market. However, according to Gartner Dataquest, the growth in Eastern Europe would exceed growth in the rest of the market over the next four years; the outsourcing business is expected to expand by nearly 30 percent in Eastern Europe by 2010, as compared to 25 percent for the global market. Eastern Europe’s software industry grew by 12.53 percent in 2006, and is expected to grow at a Compounded Annual Growth Rate (CAGR) of 10.87 percent until 2008.
Many CEE countries have already come up as compelling alternatives to traditionally established destinations for offshore software outsourcing. Poland, Hungary, and the Czech Republic have shown bright prospects in the IT outsourcing market segment, newer destinations in CEE, including Romania and Bulgaria, are upcoming too.
It is forecast that 2008 will be the biggest year for the expansion of IT-service delivery and outsourcing capabilities beyond India. This has already helped to open new markets in regions like CEE, which can offer long-term benefits to its clients. According to A.T. Kearney’s Global Services Location Index study, CEE countries continue to be popular among European companies that are seeking alternative locations for their IT and business-process outsourcing services. And it’s no wonder as this region offers an educated, multilingual labor force, talented professionals who are trained in key technologies, reliable IT infrastructure, moderate to low cost of labor and access to the greater EU. Its secondary educational system and technology-oriented higher education has made it a strong contender for software development, R&D and engineering services.
Source: Global Services magazine
Many CEE countries have already come up as compelling alternatives to traditionally established destinations for offshore software outsourcing. Poland, Hungary, and the Czech Republic have shown bright prospects in the IT outsourcing market segment, newer destinations in CEE, including Romania and Bulgaria, are upcoming too.
It is forecast that 2008 will be the biggest year for the expansion of IT-service delivery and outsourcing capabilities beyond India. This has already helped to open new markets in regions like CEE, which can offer long-term benefits to its clients. According to A.T. Kearney’s Global Services Location Index study, CEE countries continue to be popular among European companies that are seeking alternative locations for their IT and business-process outsourcing services. And it’s no wonder as this region offers an educated, multilingual labor force, talented professionals who are trained in key technologies, reliable IT infrastructure, moderate to low cost of labor and access to the greater EU. Its secondary educational system and technology-oriented higher education has made it a strong contender for software development, R&D and engineering services.
Source: Global Services magazine
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