Central and Eastern Europe: BPO Destination with Tremendous Potential

Popular emerging destinations for the offshore IT and BPO industries are Central and Eastern Europe, India and China. Central and Eastern Europe provide specific advantages for companies from Western Europe e.g., specific language /functional skills (e.g., for R&D), similar business/cultural environment and low risk of operations. Genpact is a global leader in this industry with operations in three Central and Eastern European countries – Hungary, Romania and Poland. With a global footprint in such countries as India, China, Mexico, the Philippines and the United States, and an employee base of 32,000, Genpact is committed to being the “Employer of Choice” everywhere it operates by offering unmatched career options and growth opportunities through its world-class Human Resources practices.

About the BPO Industry

The global BPO / IT Enabled Services (ITES) industry, of which Business Services and Technology Solutions is a part, is growing exponentially and Central and Eastern European countries are among the favorite hotspots of this growth.

What is BPO?

BPO is the leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications.

BPO can also be termed as the outsourcing of business functions to achieve various benefits such as cost savings, better quality and ability to focus on core competence.
BPO involves outsourcing processes that are not core to a company, but are however essential for the smooth operation of the company. The customer transfers the complete responsibility of these functions to the vendor who guarantees certain service quality standards.

PO has evolved over the years, beginning with time-sharing data processing in the 1960s. Over the years, BPO has moved from being transactional (task oriented) to being strategic (process oriented). Some common examples of BPO are customer contact centers, finance & accounting and supply chain outsourcing. Business process outsourcing may involve the use of offshore resources.

Market Size

According to Gartner, a leading research and analysis company, “the size of the global BPO market is likely to reach $173 billion by 2007, of which $24.3 billion would be outsourced to offshore service providers” such as Genpact.

A High-Growth Industry

Led by gradual economic recovery and a positive outlook for corporate earnings, worldwide IT-ITES spending witnessed steady growth in 2005. The worldwide aggregate spend on IT-ITES is estimated to have grown from $1,384 billion in 2004 to over $1,479 billion in 2005.

Services, comprising IT services, product engineering and BPO account for a dominant share (approximately 58 percent) of this spend globally.

IT-ITES spending across industries has been increasingly focused towards improving customer services, sales performance, performance tracking, employee productivity, product development and innovation, as well as increasing the responsiveness of the IT Organization and efficiency improvement.

Newer technology applications such as web services and service-oriented architecture that help reduce complexity and increase flexibility in an organization’s IT infrastructure, have witnessed increasing levels of adoption.