“Central and Eastern Europe IT Outsourcing Review”

IT Outsourcing In Europe.

 

The research “Central and Eastern Europe IT Outsourcing Review” provides an evidence of the rapid development of IT outsourcing services market in the Central and Eastern Europe. The CEE cluster becomes the real player on the global outsourcing market. The clients are getting more interested in the “nearshoring” SEO services and a range of other remote work to the CEE region than in the offshoring to India or China.

The customers become more sophisticated in their business relationships. There has been a shift from simple cost savings as a motivation to valuing the experience of outsourcing services providers and efficiency of cooperation between the client and provider teams. The advantages of the CEE countries such as cultural compatibility with Europe and North America, technical and business experience are of great value for the clients.

One of the main objectives of the research conducted by the Central and Eastern European Outsourcing Association (CEEOA) with the support of Council of European Professional Informatics Societies (CEPIS), and sponsored by Ukrainian software development company NET Technology Center WEB100, is to provide the holistic view on the potential of the CEE region as a global cluster for provision of nearshore IT outsourcing for the Western European countries and for offshore IT outsourcing for the North American market.

“CEE IT Outsourcing Review” includes the detailed country profiles, experts estimations on the outsourcing market development during the recession period, their opinion on new tendencies and forecasts for the market recovery, profiles of the leading outsourcing companies in the region. The research examines key development indicators of the IT outsourcing market in the 16 countries of the Central and Eastern Europe region including market value, number of professionals, number of IT companies providing outsourcing services and market rates.

Market value is the main indicator of the development of IT outsourcing industry in a country.

 

The global economic recession had a marked influence on the IT outsourcing industry which was one of the first to suffer significantly. During the first half of 2008, in the CEE region, positive market inertia from 2007 sustained business activity.

However, in the latter part of 2008, there was a slight decrease by 2-3% in comparison with 2007 levels of business activity. But, at the outset of 2009, the IT outsourcing industry experienced a reduction of 15-20% on contract levels compared with the same time the year before. This does not bode well for the remainder of 2009.

When calculating the number of IT outsourcing companies, the criterion chosen was those with more than 10 employees directly involved in IT and software development (i.e. excluding administrative staff) as outsourced services. In accordance with the research findings there was little growth in the number of IT outsourcing companies. The number of company closures in 2008 was insignificant. Staff reductions of 5-7% across the industry led to the establishment of new companies by redundant workers, many of whom set up their own business or start-up projects.

When calculating the number of professionals, specialists involved in IT outsourcing were counted excluding administrative personnel.

 

Although, during the first half of the year the IT and SEO outsourcing market experienced a rapid development, in the second half of the year the market encountered hurdles and the numbers of IT professionals were reduced. But, after considering the graduates who entered the market, at the year-end the number of professionals involved in IT outsourcing increased slightly.

Rates are calculated based on the amount the end customer pays for the services of an IT specialist per year inclusive of salary, taxes, facilities, etc. Despite the economic crisis, the rates did not undergo a significant drop, but the cost of services is expected to fall considerably in the second half of 2009.

“CEE IT Outsourcing Review 2008” was conducted during January to July 2009. The national IT and outsourcing associations, largest outsourcing companies, and independent experts were invited as respondents.

The official version of the research “Central and Eastern Europe IT Outsourcing Review 2008” is available at the information portal ITONews.eu (http://www.itonews.eu) and at the CEEOA website.

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