Eastern Europe – An Emerging Outsourcing Hotspot

A recent industry report has confirmed that IT outsourcing to Eastern Europe has increased by 23percent compared to last year’s revenue. This new flourishing sector is attracting a lot of attention from its neighboring Western European technological companies.

Outsourcing to Eastern and Central Europe is booming and two big Western companies such as Siemens and Deutsche Telekom are currently making the most of it. At first though these areas seems impoverished, its young generation certainly wants to have a bright future and they have found a way for that through Information Technology. According to a new report from the Central and Eastern European Outsourcing Association (CEEOA), in 2009 IT outsourcing reached 3 billion Euros and it is estimated to touch 3.7 billion Euros this year.

Europe’s new generation of information technology professionals is responsible for the increasing influx of outsourced projects in those regions. A number of young coders handle low-level as well as high level projects which include developing software for financial institutions to developing sensitive software for small arms control.

This works out for Western companies as they are always on the look-out to find cost-cutting measures without harming the quality of work. Therefore places such as Ukraine and Romania are experiencing the largest growth in IT outsourcing and are already included in the likes of Deutsche Bank and Siemens respectively.

According to other reports, countries from Bulgaria to Slovakia resisted economic downturn as the number of IT specialists working in outsourcing firms grew to almost 100,00 people. This sole point indicates that outsourcing is growing at a fast rate in Central and Eastern Europe.

The scene is however different in Kosovo. Serbia received extensive internet access only after the war ended in 1999. Unemployment still runs high here. In this otherwise dismal economy the IT industry certainly brings a ray of hope to its young, educated, tech savvy enthusiastic population.

There is a feel-good aspect attached with the people working in these outsourcing firms as they can serve their country without having to leave it in search of foreign jobs. In addition the country offers good talent at reasonable rates. If geographies are considered then Kosovo is closer and falls in the same time zone as Western companies when compared to outsourcing hotspot India. It is accessible from major cities like Frankfurt, Athens or Rome. That makes Kosovo a key attraction for companies on the other side of the continent.

With more and more companies jumping on the bandwagon, the CEEOA points out that wages of these sought-after developers are rising. In the short-run it could be advantages to the developers but it could also make them less competitive with other outsourcing areas. In short, the discovery of a new outsourcing area depends on its cost-effectiveness and its region of operation.


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