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  • Outsourcing Hubs Find Ways to Tap Into European Market 5 comments
    Jun 15, 2009 11:18 AM | about stocks: INFY, WIT, G, EXLS

    Reading the Indian mainstream news yesterday about India Inc.’s strategy to expand operations in Eastern Europe and hire multilinguals to serve the European finance and accounting sector does not surprise me anymore. In my April article, I talked about how Europe is becoming more comfortable with outsourcing not just to its neighboring countries but also to Asia particularly to the Philippines. The following month, I wrote an article on Philippine Outsourcing re-focusing its efforts to the European market instead in anticipation of US political and trade condition changes.

    It is not a question anymore if there is outsourcing need in Europe the more important question to ask is how to monetize this growing demand. There are several ways of doing it.  Outsourcing companies can hire multilingual locals or they can set up operations in Eastern Europe where there are more European-languages speakers who charge at reasonable rates or they can do both.

    IBM Business Services (IBS) for instance has German and French multilingual Filipinos doing finance and accounting work for their European clientele here in the Philippines. This is a good strategy for small to medium size outsourcing firms to expand their service offering without having to open offices in Eastern Europe which entail higher investment costs.

    Although the pool of European languages speaking people in Asia is quite small, even smaller when industry specialization is factored in especially when it comes to finance, accounting and research, it is no surprise then that India sees it a better option to set up offices in Eastern Europe where German and French speaking labor supply is much bigger. This strategy allows them to almost immediately monetize this demand at a bigger scale.

    Currently, Infosys (INFY), Wipro (WIT), Tata Consultancy Services (TCS), and Genpact (G) have presence in Eastern Europe. Wipro has a 250-seater office in Bucharest and Infosys has 450-seater centre in Czech Republic. To add to that, EXL Services (EXLS) is at the moment evaluating putting up a centre in Romania and Czech Republic to tap into their multilingual workforce.

    As European businesses require more outsourcing especially higher level services such as finance, accounting and research work, the demand for high skilled multilingual workforce will simultaneously grow with it, increasing global workforce competitiveness and even more blurring inter-country boundaries.

    Author: Chris V.

    Disclosure: No positions.

    Themes: outsourcing, finance accounting, eastern europe Stocks: INFY, WIT, G, EXLS
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This post has 5 comments:

  •  
    @Chris

    Entering European markets has always been tough for Asian markets, but finally opening for them. This will go long way in establishing a proper channel for outsourcing as existing with North America. The only thing is how effective Asian's would be in serving niche markets in Europe.


    Sonal Maheshwari
    USourceIT: Single source for all your IT needs.
    Jun 16 01:01 AM | Link | Reply
  •  
    It would be interesting to note that as Europe does get more comfortable to outsourcing, it would also have to adapt to the globalizing their resources. Global companies have learned to adapt a common medium of communication. Having multilingual resources does help in niche situations and in the front lines of the business, but unless Europe learns to be more open about its background workforce, it would be wasting a potent source of resources.

    Of course, this also means that Asians should be more open as well to learning and localizing their knowledge to cater to the market they are targeting.

    The street does go both ways.
    Jun 16 05:43 AM | Link | Reply
  •  
    Interesting points. I guess that should have as well a lot of implications for job seekers and education service providers in the Philippines. Language skills plus a professional qualification seem to be what is needed, right?
    Jun 16 06:09 AM | Link | Reply
  •  
    good to know that my country has taken a leap...finally...but d topic is quite interesting n thought provoking..good in depth analysis :-)
    Jun 16 02:00 PM | Link | Reply
  •  
    Despite the increasing complexity and technological advancements in medicine, engineering, and in communications & technology, we always invariably go back to the basics: is the individual capable of manipulating the appropriate linguistic strategies to navigate the field of specialization.

    The power has truly shifted...from the sciences to the arts.
    Jun 18 02:20 AM | Link | Reply
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