Outsourcing, views from Netherlands

I have received two articles translated, by some very good friends of mine from NL, from the NRC-HANDELSBLAD, a daily dutch newspaper.

One of them describes how, to the sorrow of BPO Indian companies, “the Poles are becoming the Indians of Europe” and Poland is now starting to be the bookeeper of Europe. What does Eastern Europe have, what India lacks? ‘Language knowledge,’ says Frank Labouchere of ClientLogic in Poland. ‘India is excellent for British and American firms, but for European and non-European business firms with affairs in Europe India has shortcomings.’

Eastern Europe offers also geographically more advantages. Western clients can easily come by – and leave the same day. It is not essential, but very practical. Another point is ‘culture’. `Some firms prefer a western person to speak with,’ says Darren Owens of CapGemini in Krakow. India gets the lighter tasks, like the callcenters; heavier tasks, like controlling and accounting, firms prefer to have more near home. A British survey revealed that half of the clients of Lloyds Bank would leave for another bank, if they discovered that their calls were answered via India. Globalization has evidently its limits. Romania is also mentioned as a favoured destination for European companies.

The other article explains that the relocation of business activities to countries with lower wages is good for the Dutch economy. It is lucrative for the consumers and had hardly any influence on employment. This can be read in a recent research report ‘View on Relocation’ from the Department of Economic Affairs from Netherlands.

While there were fears that the recent EU integration of Poland, Czech Republic and later on Romania, will diminish the advantage cost/quality of the outsourcing industry for these countries, the recent news shows in fact that the BPO industry has actually increased even more for them after the accession. For example, Bureau McKinsey expects that the Polish BPO will grow from 3000 jobs this year to 200.000 in 2008.