We all know that competition is a crucial business law, and that if there were no competition, there would not have been progress. In the case of most businesses, competition is comprised by a big or small number of other companies involved in the same business but mostly in the same country. In the case of outsourcing, offshore outsourcing companies have to compete not only with other companies in their home country, but also with other countries of the world, which makes the competition tougher, but also stimulates and encourages for better and better results.

According to A.T. Kearney Global Services Location Index, 2007 (below is the cut down version of the Kearney’s research. The original version is available at http://www.atkearney.com/res/shared/pdf/GSLI_2007.pdf), Russia is rated in top 50 locations worldwide that provide the best remote functions, including IT services and support, contact centers and back-office support.

Table 1

Note: The weight distribution for the three categories is 40:30:30. Financial attractiveness is rated on a scale of 0 to 4, and the categories for people and skills availability, and business environment are on a scale of 0 to 3.

Source: A.T. Kearney

If we look into the summary of Gartner Outsourcing Summit in Dallas in March, for example, we will see that Russia is mentioned in the trinity of IT outsourcing global leaders. It is not a surprise. The total value of Russian IT market grew 25 times over the last 7 years, and it means that outsourcing in Eastern Europe is speeding up the pace. Below you will see the table demonstrating the marks for quality of workforce in a number of countries involved in outsourcing:

Table 2

Source: PRTM (Pittiglio Rabin Todd McGrath), Ernst & Young

It is evident that India’s progress has become an example of how people can gain profits offering developed countries the services that they strongly need but at lower rates. As a result, the 90-s have brought the world a number of offshore outsourcing companies in Eastern Europe, which have been making a tough competition to Asian countries for about 10 years already. However, it is quite challenging to change the people’s established opinion of India as the best country to outsource jobs. On the other hand, if we think where this common belief takes its roots, we will understand that only from the fact that India is the first on the outsourcing market.

So, now, why is it a common belief among Americans that India is the best place for outsourcing? Is it a stereotype? A mistaken view? Or maybe there is something at the bottom. Let’s speculate. Below is a table with a comparison analysis of Belarus and India as two potential countries that an American company would think of contracting for outsourcing.

Table 3

According to the table, Belarusian outsourcing promises to be a smoother process than Indian outsourcing with its communication gaps and quality breaches. However, since the Indians were the first to offer outsourcing services to American and European companies India transformed into a ‘brand’ or synonym to outsourcing. That doesn’t necessarily mean that this is number 1 choice of an outsourcing destination nowadays – the Indian outsourcing market is overheated already.

What conclusions can we make from the mentioned above?

First of all, Belarus has a more favorable geographical location than India. Located almost in the heart of Europe, Belarus borders on countries-members of EU, which makes it incorporation into the European culture quicker. Besides, Minsk, the capital, is within a two and a half hour flight from Frankfurt, which means that it will be possible to build business relationships not only on a virtual level, but also personally. It is critical that customers visit the office or delivery center of their outsourcing partners, establishing thus personal contact with management, get acquainted with the company’s workflow, facilities, etc.

Secondly, the Belarusian time-zone allows Belarusian and American working hours overlap, while Indian and American working hours do not overlap at all. Some of the businesses even offer almost full business-hours time overlap with the USA. There is not that much difference in the price, but there is some clear difference in the quality of the services provided. Belarus is known for performing all outsourced tasks promptly and effectively with the business relationships based on trust, teamwork, and effective use technology.

Third, Belarus is offering the same set of services as India. BPO is a niche, which still requires some intellectual investment, but this is only a matter of time. Lack of experience in BPO is fully compensated by a high level of expertise in software development.

Fourth, the Belarusian education is one of the strongest growth supporting elements. In fact, when it comes to experience with complex software development tasks, Belarusian developers tend to outrank all others.

Add to this the absence of vivid cultural differences and a good command of the English language, and you will see why Belarus is so much better than India. Plus ambitious plans of the Belarusian government for the future of the Belarusian IT. In 2004, the government announced an initiative
to create a high tech park that would unite the leading IT outsourcing companies under one roof and promote their services. Apart from that, the government has announced an ambitious goal to boost the country’s IT services export to 4 percent of that of India by 2008! All that makes us believe that Belarus is a true outsourcing hotspot in Eastern Europe.

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This entry was posted on Wednesday, August 29th, 2007 at 8:33 am and is filed under Outsourcing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.