In the media

Among the elite of Outsourcing

For a few years, Romania has been growing in the region as a destination for more and more players in the externalization services industry. Is this sector fated to become a victim of its own success in the end? 

For some time, Andreea Stănescu, Senior Service Delivery Director at Stefanini Romania has been looking with concern toward Romanian higher education. The reason is simple: the local subsidiary of Brazilian group Stefanini, one of the main global players in IT services externalisation, is continuously expanding its Romanian team and needs specialists in the field, but the well of fresh talent is starting to run dry. “Competition on the internal market is more and more tight, seeing as the technical profile faculties annually generate about 7.000 graduates, while the real need in the market is almost double that”, said Andreea Stănescu. Last year Stefanini businesses generated over 17 million euros locally, and the Romanian team has grown, reaching over 1100 employees in the Bucharest in Sibiu centers. For this year the company is planning to hire 200 more specialists. 

The local outsourcing market is effervescent. The service sector for businesses surpassed 1.5 billion euros last year, according to the Association of the Business Services Leaders in Romania’s (ABSL) estimations. Business Process Outsourcing (BPO) and IT Outsourcing represent almost half of the industry and the rest is the Shared Services segment (consolidating the activities of some multinational company departments in a single center). The business services sector has over 60000 professionals employed in Romania and 25% of them are employed in companies that are members of the ABSL. “We can estimate an important growth, of about 30% in the following years for the main actors due to a significant increase in demand for business services delivered from Romania”, said Alexander Weigl, president of the Association, last year.

Global and local

The scaling and growth of the Romanian market come down to some quintessential characteristics of the local market which have determined big players in the field to invest massively in outsourcing centers. There are, however, some entrepreneurs in the field, as well. One of them is Călin Văduva, CEO of Cluj-based company Fortech, which he founded in 2003. Romania’s appeal as a destination for outsourcing has grown thanks to a series of factors, among which are the variety of technical and linguistical competences, management abilities, price-quality rapport, operational efficiency, dedication, the ability to understand the client culture and geographical proximity to them. Fortech has acquired 10 new clients in the last year, which then triggered a 30% increase in the number of employees and a 15% increase in turnover, all while in the first months of 2015 they had a 30% increase in revenue compared to last year. “Currently, we have over 50 employees, out of which 60% have over 3 years of experience”, says Văduva. Fortech clients are software development companies or IT departments inside big companies in the auto, e-commerce, health industries, and more. They are located in Western Europe, Nordic countries and the USA.

A year ago, Vodafone was announcing a 6.25 billion euros investment to equip and create the technological process for the New Vodafone Shared Services Romania Center and to onboard their new employees. The center will offer support to Vodafone clients in Great Britain, Germany, Italy, Spain and Ireland for requests related to billing, payments, account administration, data connection support, and IT services. The services they will offer are mostly help desk operations for the internal activities of the Vodafone Group and for the five divisions previously mentioned. They also offer support with IT applications and database management. Vodafone Shared Services Romania will create over 2000 jobs by 2016 and is the second center opened by Vodafone in Bucharest, after the Danubius NOC regional center for network operations in Romania, Italy, Greece, Germany, the Netherlands, the Czech Republic and Albania. “Romania is quickly becoming a best-in-class location for the Vodafone Group, thanks to the unique qualities of its workforce – performance in technology and proficient language skills”, said Ravinder Tkkar, Vodafone Romania CEO at the launch of the center, underlining exactly the strong points of our country in the outsourcing sector.

Up in the top

Last year in the top 100 global destinations for outsourcing, a survey conducted by consultancy company Tholons, Bucharest went up one position, reaching 39th place. In Europe the capital is in 8th place, coming in after Krakow (9th globally), Dublin (12), Prague (15), Budapest (25), Brno (29), Warsaw (30) and Sankt Petersburg (34). In the Global top 10, other than Krakow, all other cities are from the Asia-Pacific region, with the champion being Bangalore, India, a country which has 6 cities from the top 10. “Currently, Romania is in a strong position in the region, and we can say that it is truly becoming an IT hub. In the case of Stefanini, the Romanian center is the biggest in the region, so it coordinates the activity of the Polish center as well, as an example.”, said Andreea Stănescu.   

“The technical profile faculties annually generate about 7.000 graduates, while the real need in the market is almost double that” – Andreea Stănescu, Senior Service Delivery director at Stefanini Romania.

Bucharest and Romania generally are the big winners of Central and Eastern Europe’s rise in popularity in the outsourcing market. An analysis conducted by Colliers International in 2014 showed that 30% of the top 100 outsourcing companies globally are already present in the region. The European Contact Centers employ 2.8 million workers, while the number of employees in the outsourcing processes sector reaches 3.8 million and the economic impact reaches 65 billion euros, according to a 2014 study by Call The BPO market represents 17.9% of the outsourcing industry in the region, which is increasing at a 3.6% rate annually. “Eastern Europe has grown to become a very important region in the Global outsourcing industry, and an increasingly attractive destination for companies globally”, declared Mădălina Vilău, Managing Director at the Marketing Insiders Group, during the European BPO Forum, which took place in April.

The good news for the region is good for Romania as well. The country will continue to consolidate its position in the region but will require big investments and a long-term strategy centered on collaboration between leading sector companies and higher education institutions so that the academic environment can produce sufficient workforce to satisfy the requirements of the market. In other words, success until now has swallowed up almost all the talent and resources in the sector, and without a specialist ‘pipeline’ from higher education institutions, growth can stall at any moment. Călin Văduva from Fortech has already noticed a discrepancy between demand and offer, especially when it comes to senior-level positions, which most probably will continue to accentuate in the next period as the academic model will not be able to support sustainable growth in the long term.

“At the same time, client expectations are translated into the need to recruit personnel that has not only technical expertise with a variety of technologies but also business knowledge and management capabilities. At this level, disequilibrium will continue to be more and more pregnant.” – Călin Văduva | Fortech CEO.

Social media is changing the game 

A big part of the outsourcing industry involves client interaction, and the sector has a lot to gain from the social media revolution, which brings opportunities as well as challenges. With an annual 30% growth, social media is the digital channel with the biggest advance, covering an important percentage of the customer service industry, seeing as digital interaction represents 35% of the total interactions in this sector.

According to a Business Systems report on Contact Centers globally, social media represents up to 11.5% of the interactions that happened in Contact Centers with clients. “The social sector is difficult. It’s based on text, it’s public, and a single error can become viral. The opportunity resides in the delay between a customer asking a question and the number of responses the company offers them. The outsourcing world has a big opportunity to reduce this delay”, declared Joseph Rice, Director of Channel & Business Development at Conversocial during the European BPO Forum.

Say hello