Competitive Analysis of Central European Countries With Respect to Offshore Outsourcing, 2009

It is no secret that the costs of doing business in CE are rising quickly. Salaries, rent, and overall costs of living have risen dramatically in recent years. This has made the CE region noticeably more expensive than its neighbors to the east, which are now aggressively competing for their share of the offshore/nearshore business. With costs rising, the CE region will need to highlight its experience when trying to win new business. The countries of CE are all capable of delivering quality services, which will become a key differentiator, especially as prices throughout CEE continue to rise. By focusing on other key indicators, like market experience, and not solely on costs, CE countries will still win business over those countries not yet as experienced in the offshore/nearshore sourcing market.

It should be noted that there are additional indicators that may be of interest to a company looking to set up offshore. An in-depth analysis of a company's business requirements should be developed, which can then be mapped to the respective country indicators. A customized study can then be developed to determine which country best suits a company's business requirements.

In the first of a three-part study of 13 countries in CEE, IDC has developed a comprehensive and in-depth framework to evaluate individual countries' readiness and suitability for technological and business process outsourcing.

The data and results of this study are intended to help IT and business services providers, as well as end users, to gain a clearer picture of the suitability of individual countries in the region as sourcing locations for different types of technological and business process outsourcing.

This study analyzes four CE countries with regard to the following five factors:

• Skills resources
• Economic and political
• Infrastructure
• Business and regional
• Financial

The study profiles each country based on quantitative data relating to the above five categories for the years 2007 and 2008 (where data is available and relevant; data relating to education and language learning is from 2006 and 2007, and data related to language proficiency is from 2002 and 2005) and offers a qualitative analysis of the data. In addition, this study provides comparative analysis between the countries and with Ireland. Data on Ireland is provided for comparison, as the country is considered a mature provider of outsourced services in Europe and thus serves as a benchmark for European offshore/nearshore outsourcing.

"The countries of CE remain, to varying degrees, very suitable sourcing locations. While costs have risen in recent years, the countries have benefited from being at the forefront of the offshore/nearshore boom. They have proven themselves capable of staffing numerous types and sizes of centers, whether BPO, IT services, or R&D. The economic crisis, by stunting wage growth and bringing down costs in other key sectors of the region's economies, has actually served to help the CE countries regain some of the attractiveness they had lost as sourcing locations." - Senior Research Analyst Curtis Robinson, IDC CEMA