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Competitive Analysis of Central European Countries With Respect to Offshore Outsourcing, 2009

IDC
September 23, 2009
63 Pages - SKU: IDC2464341

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Europe

It is no secret that the costs of doing business in CE are rising quickly. Salaries, rent, and overall costs of living have risen dramatically in recent years. This has made the CE region noticeably more expensive than its neighbors to the east, which are now aggressively competing for their share of the offshore/nearshore business. With costs rising, the CE region will need to highlight its experience when trying to win new business. The countries of CE are all capable of delivering quality services, which will become a key differentiator, especially as prices throughout CEE continue to rise. By focusing on other key indicators, like market experience, and not solely on costs, CE countries will still win business over those countries not yet as experienced in the offshore/nearshore sourcing market.

It should be noted that there are additional indicators that may be of interest to a company looking to set up offshore. An in-depth analysis of a company's business requirements should be developed, which can then be mapped to the respective country indicators. A customized study can then be developed to determine which country best suits a company's business requirements.

In the first of a three-part study of 13 countries in CEE, IDC has developed a comprehensive and in-depth framework to evaluate individual countries' readiness and suitability for technological and business process outsourcing.

The data and results of this study are intended to help IT and business services providers, as well as end users, to gain a clearer picture of the suitability of individual countries in the region as sourcing locations for different types of technological and business process outsourcing.

This study analyzes four CE countries with regard to the following five factors:

Skills resources
Economic and political
Infrastructure
Business and regional
Financial

The study profiles each country based on quantitative data relating to the above five categories for the years 2007 and 2008 (where data is available and relevant; data relating to education and language learning is from 2006 and 2007, and data related to language proficiency is from 2002 and 2005) and offers a qualitative analysis of the data. In addition, this study provides comparative analysis between the countries and with Ireland. Data on Ireland is provided for comparison, as the country is considered a mature provider of outsourced services in Europe and thus serves as a benchmark for European offshore/nearshore outsourcing.

"The countries of CE remain, to varying degrees, very suitable sourcing locations. While costs have risen in recent years, the countries have benefited from being at the forefront of the offshore/nearshore boom. They have proven themselves capable of staffing numerous types and sizes of centers, whether BPO, IT services, or R&D. The economic crisis, by stunting wage growth and bringing down costs in other key sectors of the region's economies, has actually served to help the CE countries regain some of the attractiveness they had lost as sourcing locations." - Senior Research Analyst Curtis Robinson, IDC CEMA

Table of Contents
IDC Opinion

In This Study
Methodology
Executive Summary
Situation Overview
CE Countries Competitive Despite Rising Costs
CEE: A Bona Fide Global Services Market Competitor
Resources Skills Factors
Education Levels
Language Education
Language Proficiency
Resource Availability
Work Culture
Analysis of Resources Skills Factors by Country
Czech Republic
Slovakia
Poland
Hungary
Economic and Political Factors
Political Commitment
Administrative Burden
Intellectual Property Protection (IPP)
Economy
Analysis of Economic and Political Factors
Czech Republic
Slovakia
Poland
Hungary
Infrastructure Factors
ICT Infrastructure
Transportation
Analysis of Infrastructure Factors
Czech Republic
Slovakia
Poland
Hungary
Business and Regional Factors
Perceived Country Attractiveness
Employee Acquisition and Dismissal
Experience Hosting IT Services and BPO Centers
Real Estate
Analysis of Business and Regional Factors
Czech Republic
Slovakia
Poland
Hungary
Financial Factors
Compensation
Tax and Country-Specific Costs
Capital and Variable Costs
Analysis of Financial Factors
Czech Republic
Slovakia
Poland
Hungary
Future Outlook
What Does This Mean?
Resource Skills: Crisis Brings Sanity to Labor Market
Economic and Political Factors: CE Still Competitive in Face of Crisis
Infrastructure: CE the Best in CEE
Business and Regional Factors: Small Cities Offer Big Advantages
Financial Factors: Numerous
Essential Guidance
Crisis Will Deepen CE Capital City Labor Pools
CE Experience A Key Differentiator
Establish in Secondary Cities, Recruit Abroad
CE Can Take Advantage of Nearshore Business in the Near Term
Learn More
Related Research
Definitions
Methodology
Selection of Profiled Countries
Resources Skill Factors
Economic and Political Factors
Infrastructure Factors
Business and Regional Factors
Financial Factors
Synopsis
Table: Comparison of Resources Skill Factors (%)- Tertiary Education levels, 2006–2007
Table: Comparison of Resources Skill Factors (%) – Language Learning, 2006–2007
Table: Comparison of Resources Skill Factors (%) – Language Proficiency, 2002 and 2005
Table: Comparison of Resources Skill Factors (%)- Resource Availability, 2007–2008
Table: Comparison of Resources Skill Factors – Work Culture, 2007–2008
Table: Comparison of Economic and Political Factors – Political Commitment, 2007–2008
Table: Comparison of Economic and Political Factors – Regulatory Environment, 2007–2008
Table: Comparison of Economic and Political Factors – Intellectual Property Protection, 2007–2008
Table: Comparison of Economic and Political Factors – Economy, 2007–2008
Table: Comparison of Infrastructure Factors – ICT infrastructure, 2007–2008
Table: Comparison of Infrastructure Factors – Transportation, 2007–2008
Table: Comparison of Business & Regional Factors – Perceived Country Attractiveness, 2007–2008
Table: Comparison of Business & Regional Factors – Employee Acquisition and Dismissal, 2007–2008
Table: Comparison of Business & Regional Factors – Market Experience, 2007–2008
Table: Comparison of Business & Regional Factors – Real Estate, 2007–2008
Table: Comparison of Financial Factors – Compensation, 2007–2008
Table: Comparison of Financial Factors – Tax and Country-specific costs, 2007–2008
Table: Comparison of Financial Factors – Capital and Variable Costs, 2007–2008

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Competitive Analysis of Central European Countries With Respect to Offshore Outsourcing, 2009

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