Outsourcing today The outsourcing phenomenon is definitely not a new one. We've seen a constant shift in recent years towards better and broader access to IT expertise at lower overall costs for businesses operating in the West. For companies in the DACH region, it's been increasingly obvious that countries in Eastern Europe have a distinct advantage when looking at cultural similarities, including having German-speaking experts. A recent report for 2019 by the Worldwide Group, finds that, in Romania, 33 out of 40 companies analyzed use German during service delivery.Furthermore, because the talent pool in the area is very diverse and can sustain increasing demand, countries such as India can't compete - especially when cutting the most costs is not the most important evaluation criteria.These observations are nothing new. The German business community has been well aware of this reality for quite some time but taking action in some areas has been rather slow. For example, while some Mittelstand-type companies have moved into this outsourcing space, the vast majority are still not convinced. We believe that considering the rapid changes happening with the current digital wave, soon enough it won't be an option to continue operating in a current manner. Here are some things that we believe might convince them to start preparing for the future together with an adaptive and agile technological partner like us or many others across Eastern Europe.
Trends we see unfolding
1. We'll see increasing demand in the area of data privacy and cybersecurity.While this has always been the case for the DACH region, since regulations have been set in place for quite some time to ensure data is safely stored and processed, after numerous scandals in the global media, this is a priority on the agenda of Western companies involved in outsourcing activities. This increased demand, that we predict will continue to rise, has offered an opportunity for Romanian companies to quickly rise to meet the rigors required.
2. Robotic Process Automation will continue to grow exponentially while companies start to see its benefits.The RPA Global market for 2018 has reached $1253M from just $799M in the previous year with Western Europe at around $480M. This is no longer just a buzzword thrown around at conferences, as serious money is invested in this area. Industries, where RPA investments are most noticeable, are Finance and Insurance, Energy, Travel, Healthcare, Telecom, Manufacturing, and Retail. Interestingly, RPA has caught the attention of companies in Germany where, according to a Softmotive Global Study in 2018, 57% of companies are actively implementing it to varying degrees. Of course, large-scale implementations are only starting to take place, since this is a fairly new opportunity for most companies to take advantage of but it's definitely brought results for companies dealing with a lot of repetitive, low-value work.
3. In the IT space, hard skills have long been sought after but soft skills will see a strong comeback.The current IT worker, as defined by most job descriptions we see, is an expert in a certain technology (preferably more). While HR looks for team culture fit and soft skills as well, only recently IT managers started to fully recognize that their people need to develop and grow on the soft skills side. Looking at the outsourcing space, soft skills can become a deal-breaker, especially since remote collaboration requires strong communication and collaboration skills. Nobody likes delayed projects, especially due to a lack of transparent communication. In the future, this will become a very strict requirement, especially looking at the culture fit needed in order for everyone to work as one highly performing team—continuously delivering value.
4. Long-term technological partners will consistently offer innovation opportunities to leverage.We've seen first hand from our long-term clients how their business is improved by our consistent proposals to improve things. We explain how we would approach things moving forward, towards innovative features, and once a decision is reached, we can quickly move in that direction. We see this as a trend taking place in many other IT service providers from Eastern Europe and it will only grow, as the demand to offer added-value is increasing.
See you in Berlin on the 4th of JuneWe love to understand how business needs evolve over time. These days, things are moving at quite an accelerated pace and we feel it's our duty towards our clients to keep one step ahead of the curve.If you're in Berlin on the 4th of June, our colleague Botond Gagyi will be at the Outsourcing & Shared Service, Germany Forum event. Drop him a line on Xing or LinkedIn and schedule a talk. He can tell you from first-hand experience how we approach validating new product ideas in the market and our experiences in forward-thinking areas such as: Chatbots, Artificial Intelligence & Machine Learning, Internet of Things, Robotic Process Automation, Virtual & Mixed Reality and Blockchain. If you're unable to join him, drop us a comment and we'll discuss it there.