The Nearshoring Choice of European Businesses

During one of the latest Global Services’ webinars, Avinash Vashistha, CEO and Chairman Tholons, noted: "Western Europe has done a significant amount of nearshoring to Eastern European countries which have become a part of European Union.”

But what makes EE/CEE locations so attractive for Western clients? Why, unlike their American counterparts, European businesses prefer to keep their IT initiatives close to home? Why such popular offshore destinations like India and China are losing ground?

According to Tholons and Global Services' joint study, the first reason for Europe’s neashoring success lies in the conservative nature of Europeans who are comfortable to keep work close to home and do not have a settled tradition of sending work overseas. And traditions mean much in Europe.

The second reason is the wide choice of Eastern European countries which are traditionally strong in IT with a reputable and solid background in computer science. For example, the study distinguished the following EE countries strong in software outsourcing: Poland provides excellent BPO and IT services, Hungary offers cost effectiveness for clients, Russia is good at technology development and R&D work, Ukraine offers capabilities in BPO, and Romania in business analytics.

And last but not least, the study mentions financial attractiveness, cultural compatibility, and good educational structure of EE countries.

Attractive combination altogether, isn’t it? No doubt, EE/CEE shall see increased investments in the near future and increased customer interest in their IT offering.

Source: Global Services

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Europe Embarks On the Outsourcing Spree

According tо the recent report by Gartner, world’s leading information technology research and advisory company, IT outsourcing is strongly gaining momentum in Western Europe, the second largest market after the US. The survey results show, that more than half, exactly 53%, of organizations in Europe plan to increase outsourcing initiatives in 2010, and 40% anticipate to surge spending on external IT services. The online survey was conducted among 206 organizations in Europe during in the first quarter of 2010.

At the same time, the analyst firm does not see it all in bright colors and warns service providers of potential constraints. With IT budgets still tight, European organizations expect their vendors to deliver tangible cost reductions. The market opportunities are large, but the customer expectations are also high. European organizations are looking for outsourcers to provide more than “my mess for less”, says the report.

Outsourcing upside creates excellent opportunities for nearshore service providers. Nearshoring has a row of advantages, such as time and cultural proximity, cutting travel costs, etc. In such situation, established Central and Eastern European vendors, which bring about the whole bunch of nearshoring advantages, come as a natural choice for many Western European clients.

Source: V3.co.uk

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