Outsourcing: Consider Russia
Russian outsourcing companies, though comprising a small market, have some advantages over larger Indian rivals.
Jun 22, 2005
Line56 was ahead of the curve in recognizing Russian contributions to global business process outsourcing (BPO), finding that the country had impressive human and technological resources in addition to low costs to offer.
Still, the Russian BPO market is quite small. An AMR Research alert just issued by analyst Lance Travis pegs the market at $750 million, making it, as he observes, "tiny compared to the Indian industry."
Russian BPO companies have never denied this. They compete on skill, not size. Travis' alert listed some of the skills and niches at which the Russians could serve as an alternative to India (and what he calls India's "geopolitical risk and cultural differences"):
Because the market in Russia is not as over heated as the market in India, the demand for IT talent is not as great. As a result, the Russian companies are able to staff people with more experience and suffer much less attrition due to job hopping.
One customer of Indian and Russian service providers contrasted the two cultures as, "Indians always report the best possible scenario and the Russian firms always the worst possible scenario." The customer felt the Russian approach was more appropriate for high-risk projects.
The Russian firms are...a three-hour fight from Frankfurt [and] have German and Finnish language expertise in addition to English and Russian.
The last point indicates that, long-term, Russia may best serve as Western Europe's BPO bastion. It has a lot of catching up to do here, as India has prioritized Europe as well.
As far as cultural difference, Indian BPO companies might do well to take some pointers from Russian companies, particularly in the area of project management. According to Travis, Russian BPO is better at the timeless sales art of undersell/overdeliver, an art that Indian BPO enthusiasm is obscuring.
European companies have distinct reasons to look at Russian BPO, but North American companies should also consider Russian outsourcers to "work on relatively small (1 to 10 people) custom application development and maintenance projects," Travis concludes.
Still, the Russian BPO market is quite small. An AMR Research alert just issued by analyst Lance Travis pegs the market at $750 million, making it, as he observes, "tiny compared to the Indian industry."
Russian BPO companies have never denied this. They compete on skill, not size. Travis' alert listed some of the skills and niches at which the Russians could serve as an alternative to India (and what he calls India's "geopolitical risk and cultural differences"):
Because the market in Russia is not as over heated as the market in India, the demand for IT talent is not as great. As a result, the Russian companies are able to staff people with more experience and suffer much less attrition due to job hopping.
One customer of Indian and Russian service providers contrasted the two cultures as, "Indians always report the best possible scenario and the Russian firms always the worst possible scenario." The customer felt the Russian approach was more appropriate for high-risk projects.
The Russian firms are...a three-hour fight from Frankfurt [and] have German and Finnish language expertise in addition to English and Russian.
The last point indicates that, long-term, Russia may best serve as Western Europe's BPO bastion. It has a lot of catching up to do here, as India has prioritized Europe as well.
As far as cultural difference, Indian BPO companies might do well to take some pointers from Russian companies, particularly in the area of project management. According to Travis, Russian BPO is better at the timeless sales art of undersell/overdeliver, an art that Indian BPO enthusiasm is obscuring.
European companies have distinct reasons to look at Russian BPO, but North American companies should also consider Russian outsourcers to "work on relatively small (1 to 10 people) custom application development and maintenance projects," Travis concludes.