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The overlooked potential for outsourcing in Eastern Europe

  • Eastern Europe is a small player in the global market for IT and business process outsourcing, but that's likely to change as companies in Western Europe become more comfortable with offshoring.
  • Service providers in Eastern Europe offer geographic proximity combined with cultural and language affinities that Western European companies can't easily find further afield.
  • The region is likely to remain competitive, given its low level of wage inflation (outside of popular centers like Prague and Budapest), along with thousands of qualified graduates entering the marketplace each year.
  • As Eastern European service providers develop their capabilities, they should capture a larger share of the market for IT and business process services.
This article contains the following exhibits:
  • Exhibit 1: Historically, Eastern Europe captured only a small share of companies' global offshoring activities.
  • Exhibit 2: Eastern European offshoring demand is expected to grow to 130,000 FTEs in 2008.
  • Exhibit 3: Wage levels are expected to rise only modestly.
  • Exhibit 4: Many seemingly undiscovered locations for offshoring exist in Eastern Europe.

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