Southeast Europe versus Southeast Asia: the outsourcers’ battle to attract US clients
Author: Mr. Grégoire VIGROUX, Director, CallPoint New Europe SRL
T: + 40 31 423 02 95
M: + 40 74 302 70 06
E: gregoire.vigroux@callpoint-group.com
In 2011, Southeastern Asia (SEA) was the largest supplier of offshore services to US companies. In this region, India is the major provider, with the Philippines a distant second. Together, these two countries account for 50% of the world’s BPO and call center market.
However, the economic environment of our globalized world is volatile. And SEA is now becoming less attractive from the perspective of the off-shoring industry, whereas Southeastern Europe (SEE) is gaining ground. We have been digging a bit deeper in order to understand why.
SEE: a dreadful challenger
Romania and Bulgaria recently became the most significant SEE players. The BPO/call center industries in both countries have experienced amazing growth: in the past three years, they have grown at almost double the growth rate of India’s BPO market.
Many analysts predict 2012 is going to be a crucial year, in which SEE is expected to gain even more ground in the battle against SEA to attract large American clients.
The SEE pioneers
The entrance of world leading brands such as HP, Oracle, Microsoft, IBM, Siemens, P&G and Ford in SEE have prompted other US companies that had little or no contact with SEE in the past. More new companies started to consider exploiting this potential “HR gold mine”, which combines low labor costs, large multilingual labor pools and high stability – both countries being members of the European Union since 2007. Aside from the outsourcing of IT and telecom services, there is also a recent growth in the outsourcing to Eastern Europe of customer care support for ecommerce companies.
Bulgaria provides a great solution for creating niche capabilities. For example, when Outsource Partners International sought to open a delivery center in Eastern Europe to cater to the global shipping industry, they chose the port city of Varna, on the Black Sea coast, where they found the necessary experience they sought.
Romania on the other hand, has become a good provider of IT services, as many world known companies from this industry opened delivery centers there. One such example is the Swedish phone company Ericsson, who established a global delivery center in Romania employing only engineers.
SEA: a solid experience in working for large US clients
The trend of outsourcing to Asia started in the early 1980s, when several European airlines such as British Airways started outsourcing in India, followed by American Express, which consolidated its Japan and Asia Pacific back office operations into New Delhi. As of 2008, around 700,000 people work in the outsourcing sector in India (less than 0.1% of its total population). As a total, India gets US$30 billion in revenues from offshore IT and total BPO operations every year.
Many analysts believe, however, that the growth of India outsourcing sector is going to decrease in the next couple of years, for three main reasons:
- These sectors are tremendously dependent on the fragility of the US dollar currency: if the US dollar depreciates, it impacts the entire sector.
- Wages in India are rising by 10-15 percent as a result of skill shortage.
- International competition is a threat, from Eastern Europe especially.
Multilinguism: SEE’s strongest asset
In the past 30 years, American multinationals have been merely outsourcing to India and Philippines because they were primarily focused on providing English-speaking services. But nowadays, English alone is simply not enough! US companies in the IT, travel, financial and ecommerce industries are now willing to serve their customers in additional languages beyond English, such as:
- SPANISH. This language is the second most-common language in the United States after English. There are more Spanish speakers in the U.S. than there are speakers of Chinese, French, Italian, Hawaiian, and the Native American languages combined. Spanish is the primary language spoken at home in the US by over 35.5 million people aged 5 years old and older. Large US multinationals now want to serve their Spanish speaking clients living in America as well as they can. And the best way to do it is to use a multilingual call center/BPO using Spanish. And Spanish is one of the main languages spoken in some Eastern European call centers such as Romania.
- FRENCH. Many US companies do business and have clients in Canada, for which they need French speakers. Canada is, indeed, a bilingual nation with both English and French as official languages at the federal level. One should not forget the United States and Canada have the largest trade relationship in the world. Each country is the largest trade partner of the other. In the region of Quebec, about six million French Canadians are native French speakers, compared to just one million English speakers. With 20% of Romanians speaking French, Romania is an attractive choice for customer care outsourcing for Canadian customers.
As we see it, call centers and BPO in SEE are able to provide Spanish and French speakers on a large scale. But not only these two languages… the region is also home to many native speakers of German, Italian, Portuguese, Russian and other European languages. This is the main strength of SEE: being able to provide real multilingual operations, rather than monolingual, as SEA provides.
India & the Philippines, though, are effective “monolingual” outsourcing destinations. SEA benefits from a large pool of English speakers. 23% of the Indian population (232 million people); and 55% of the Philippine people (50 million) speak English. As a consequence, US companies have been using Indian and Philippine BPO and call center suppliers for the past 30 years.
These countries may provide English speakers, but they really struggle to provide additional European languages in a satisfactory manner, both in terms of quality and ability to handle volumes at large scale.
SEE countries, primarily Romania and Bulgaria, are performing very well as real “multilingual” players. Some contact center providers in Southeastern Europe, such as CallPoint New Europe, offer more than 20 languages from one single location. This is a true asset for all large US companies with operations in many countries, as it allows them to cover all their customers’/clients’ languages and manage only one single call center location.
CallPoint New Europe: the multilingual partner for US companies
One of the main players in SEE is CallPoint New Europe. The company is based in both Bulgaria and Romania – where it has got 1,000 positions across four delivery centers.
The company delivers end-to-end solutions rooted in Best Practice approach and Six Sigma expertise. Driven by quality and security of its operations, CallPoint is ISO 9001:2008; ISO 27001:2005 certified and a PCI DSS compliant service provider.
CallPoint is currently serving 50+ North-American and European leading multinationals in 20+ languages across following main industry verticals: Travel & Leisure; Financial Services; Retail & E-commerce, High-Tech & Media.
You want to know more about outsourcing in Southeast Europe / CallPoint New Europe?
Our BPO experts for Southeast Europe outsourcing will be glad to help you!
Call our New York sales office (+1 646 626 55 49); or discover our website www.callpoint-group.com and blog www.multilingual-bpo.com.