European Offshore Increase
European companies are dramatically increasing their reliance on IT and business process outsourcing (BPO), according to new research from Gartner that predicts 50 percent spending growth on these categories every year.
Apr 28, 2006
Gartner's survey found, not surprisingly, that the top destination for European IT/BPO offshore spending is India. China and Brazil were close to each other in second place. But there are plenty of "nearshore" opportunities as well, especially given that European languages other than English are not as commonly spoken in India and China.
Of nearshore destinations, perhaps the most relevant are Ireland, Northern Ireland and Spain, all of which are longtime members of the European Union (EU) and consequently enjoy advantages of infrastructure, unrestricted travel, and shared business standards. However, this group is a little more expensive than other nearshore countries.
The next group, that of newer EU members, includes the Czech Republic, Hungary, Latvia, Poland and Slovakia. This group has good technical and language (particularly German) skills, but may not be able to cover the scalability and breadth requirements of larger customers.
The last group consists of non-EU members like Romania, Russia, and other former Soviet states. This is where the cost proposition is the best, and Russia in particular has distinguished itself on the basis of technical skill. There is also great coverage of European languages.
It's more realistic to expect that European countries will rely on a mixture of nearshore for smaller-scale, focused deployments and India-based offshore for larger projects. Gartner itself points out that "companies are unlikely to find every capability in every country at any one time."
Of nearshore destinations, perhaps the most relevant are Ireland, Northern Ireland and Spain, all of which are longtime members of the European Union (EU) and consequently enjoy advantages of infrastructure, unrestricted travel, and shared business standards. However, this group is a little more expensive than other nearshore countries.
The next group, that of newer EU members, includes the Czech Republic, Hungary, Latvia, Poland and Slovakia. This group has good technical and language (particularly German) skills, but may not be able to cover the scalability and breadth requirements of larger customers.
The last group consists of non-EU members like Romania, Russia, and other former Soviet states. This is where the cost proposition is the best, and Russia in particular has distinguished itself on the basis of technical skill. There is also great coverage of European languages.
It's more realistic to expect that European countries will rely on a mixture of nearshore for smaller-scale, focused deployments and India-based offshore for larger projects. Gartner itself points out that "companies are unlikely to find every capability in every country at any one time."