In a recent webinar by Global Services on “Europe: Showcasing Challenges and Opportunities,” based on Tholons and Global Services’joint study on top global destinations, reveals that Europe is an attractive nearshoring destination.

Avinash Vashistha, CEO and Chairman Tholons says,”Western Europe has done a significant amount of nearshoring to Eastern European (EE) countries which have become a part of European Union.

He says that Europeans are conservative businessmen compared to their American counterparts and are more comfortable keeping work closer to home. The gap between the western and Eastern Europe, which has been widening for a long time, would shrink in the years to come. EE has been the first choice of Western Europe for sourcing work. .

There are some prominent nearshore destinations in Europe like Poland which is strong in BPO and IT, 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.

Europe has forte in financial attractiveness, cultural compatibility, good educational structure.

Eastern Europe has attracted a lot of investments from service providers and clients (captive operations). With all developed countries in Western Europe, it is the largest cluster of buyers across the world. This attracts large business firms from across the world to have centers in  the region to cater to the domestic markets in these developed economies.

Jonathan De Luzuriaga Managing Director talks about the top 100 emerging cities 2010 center of excellence in Europe.

He says that Dublin is considered among the emerged outsourcing cities since 2007 with companies like SAP, Quest software, IBM, Microsoft, Accenture, Marino Software, PMI software, Infosys, Deloitte, Amazon

Belfast is consistently ranked at the top 20′s of the study which is home to companies like Barclays, Accenture, InfoTech, HCL, Capgemini, HP-EDS, KPMG, Xerox, ECOM, First Data

Krakow is one of the most progressive movers from 2007 (Rank 16) to 2009 (Rank 4). The companies in the city are Google, IBM, Motorola, Fujitsu, HCL, Capgemini, ACS, Hewitt, Quantum, Sabre

Prague has moved up from 2007 to 2008 but stayed at 14th spot in 2009. The companies in the city are Sun Microsystems, Accenture, GE, SAP, Google, Intel, Capgemini, Mahindra Satyam, IBM

Budapest is one of the steady climbers since 2007 (Rank 28) jumping 3 spots per year ( rank 22-2009) with the companies like SAP, Microsoft, SunMicrosystems, TCS, Genpact, Cognizant, Canon, Mahindra Satyam, SCA.

Challenges

The continent has also been facing some challenges with higher level of bureaucracy and curruption in Eastern Europe.
Vashistha says that a signigficant amount of migration of talent is a cause of concern. Availabilty of labor and talent pool in cities changes ranking.

He suggests that to have do good business in Europe, companies should have their presence on the continent.