Outsourcing 101: Finding Quality Agencies in the Balkans and Europe

Difference between outsourcing in the US and the EU

European companies are looking for scalability and profitability, especially now with the challenges of the strong euro. As many as 70% of companies in Europe outsource at least one business function because they see it as a strategy that gives them a competitive advantage and 20% plan to start outsourcing according to Ernst & Young's “European Outsourcing Survey 2008.” More than 100 business leaders in Europe with an annual turnover of more than 100 million euros were surveyed. The biggest reasons for outsourcing were cost savings and better quality of workers. The most commonly outsourced tasks include maintenance, logistics, and IT, with the main reasons being cost savings and access to specialized skills. 

The outsourcing landscape in the US is mainly formed by rising fuel and transportation costs. The shipping cost from Asia has significantly increased, which will force some US companies to relocate production to their home country, according to CIBC. Despite these challenges, many North American manufacturers still see the U.S. as a great location for expansion and foresee growing global competitiveness. Although high fuel prices could change outsourcing patterns, they're unlikely to cause a big change in the globalization of the supply chain.

Cranfield survey recently revealed that US and European companies approach outsourcing differently. US companies tend to use outsourcing to add value to their operations. In contrast, European companies often seek to cut costs through outsourcing but both see outsourcing as an important part of their strategy. In general, both US and European companies prefer to work with a single, industry-experienced provider and both groups report that they are more satisfied with outsourcing results than expected.

Reasons for outsourcing

Offshoring can significantly reduce project costs, although comparing local salaries to outsourcing rates is difficult due to additional expenses such as taxes, insurance, and vacation associated with hiring in-house. Outsourcing destinations such as India, the Middle East, Latin America, and Eastern Europe not only offer cost benefits but also skilled talent with costs up to 40-50% lower than Western rates. When choosing an outsourcing destination, factors such as travel costs, time zone differences, and cultural compatibility should be considered. Eastern Europe is known for developing the IT sector and highly skilled professionals, which is an attractive outsourcing option combining cost efficiency with quality.

What are the advantages of outsourcing?

Today's companies are looking for both quality and affordability and are finding a compelling solution in Eastern Europe. The mix of highly skilled labor pool and cost efficiency is why  65% of companies choose European outsourcing, particularly in Central and Eastern Europe (CEE). Countries from Poland to the Baltic States are characterized by their high level of competence in software development and IT because of their strong emphasis on science and technology in education. This region is known as the "Silicon Valley of Eastern Europe," because it offers companies a strategic advantage with its skilled talent, innovation, growing job market, and cultural similarities to the West. In particular, the English language skills and the geographical proximity make collaboration easier making CEE an ideal outsourcing destination for companies that value quality and efficiency.

How to find good agencies in the Balkan region and Europe? 

Finding the best IT agencies in Europe, especially in the Balkans, is a strategic move for businesses aiming for digital transformation, cost efficiency, and access to specialized skills. Eastern Europe is ideal for IT outsourcing, thanks to its large number of skilled developers, renowned IT education, and affordable services. Countries like Ukraine, Poland, and Romania have prosperous IT sectors contributing significantly to their GDP and offer a competitive edge with high-quality, cost-effective solutions. The region's expertise spans various technologies and services, making it an ideal destination for organizations worldwide. 

Whether you're looking for custom software development, R&D, or dedicated teams, Eastern Europe offers quality innovation and value. Outsourcing in this region includes a large talent pool, cost savings, and strategic business growth, making it an essential consideration for companies looking to stay ahead in the digital era.

Benefits of Working with Spona:

Working with Spona can simplify this process as we offer an extensive network of over 10,000 renowned agencies, providing a wide range of collaboration opportunities. Our understanding of the local market promotes a smooth transition into new business landscapes. Spona's advisors prepare detailed briefings that set out your specific requirements and objectives, while our negotiation skills ensure a balance between cost and quality. When you're ready to take your business to the next level and need expert support, Spona is here for you. With our comprehensive support, outsourcing in Eastern Europe has never been easier.