Nearshoring, the effective and cost optimized Competence Center in: Cluj-Napoca, Romania
We can notice in Deloitte’s 2015 Global Outsourcing and Insourcing Survey that many customers started to demand more from their vendors, expecting from them to deliver qualitatively as well as quantitatively beyond agreement values. Many companies started to look for new strategic technology partners near home. Why is that? Why could nearshoring be considered the new offshoring? German companies are taking into consideration Eastern European IT services as an alternative to established offshoring countries. The advantages are obvious: compared with India and China as nearshore providers, Eastern Europe is both culturally and geographically closer. Also important are the good German language skills and a lower employee fluctuation.
How does nearshoring work?
As the digitalization is expanding, many companies are exploring platform dynamics as Gartner mentioned in the CIO Insight Survey from 2016. It shows that there is a driving penetration of the bimodal platform, which derives from separating different parts of the business that will result in:
Reasons for Nearshoring
Many companies are trying to separate different parts of their business, looking for better quality of service and for vendors that are providing skilled resources close to their location – which will result in a fast-tracking strategic business innovation. As a result, many companies started to see an opportunity in nearshoring for optimizing their business outcomes. It takes place mainly in Eastern Europe because of the continuous growth in sectors such as IT, engineering and automobile.
Top 10 nearshoring destinations in Europe
- Bulgaria
- Poland
- Lithuania
- Germany
- Romania
- Estonia
- Latvia
- UK
- Hungary
- Spain
Top 10 European Outsoucing Destinations – Source A.T. Kearney
Why choosing Romania for nearshoring?
Gartner named the IT market in Romania as one of the fastest growing sectors, with a turnover of about 1 billion Euros and growth rates of 40 to 60% per year. Other reasons for choosing Romania for nearshoring are:
Reasons for Nearshoring in Romania
When speaking about Romania as a nearshoring market, there are many advantages that should be taken into consideration:
Reasons for Nearshoring in Romania
Romania has already received recognition from many global players:
Romania – The New Technology Hub for Outsourcing
Romanian competition analysis
Key arguments for Romania compared to the main competitors Poland, Bulgaria, Czech Republic and Hungary are:
- it is more stable concerning politics and the economy
- the unemployment rate is really low
- the government improves tax administration and collection transparency and it supports a legal framework for foreign investments.
On the other hand, there is a need for improvement in the education sector in comparison to other countries and overall economic conditions in order to increase the GDP.
Eastern Europe 2015 – Comparison Economic and Political Factors
Future opportunities and growth
Future Opportunities and Growth Romania
All these advantages are used by Inspiricon SRL in Cluj to deliver the best in class service for supporting our clients’ projects in:
- Planning and execution of SAP BW/BO upgrade
- Blueprint and implementation of SAP BW/BO solutions
- Testing and regression testing in current projects or release strategy.
- Monitoring of data loads in the Go-Live phase as well as later on in the productive environment and optional the preparation for outsourcing to a 24/7 provider.
Are you interested in Cluj as a Nearshoring location? Do not hesitate to contact us!
Authors: Cristina Botea and Gabriel Simon (both Inspiricon SRL)
Sources:
- https://www.prsgroup.com/category/risk-index
- http://www.photius.com/rankings/population/education_expenditures_percent_of_gdp_2014_0.html
- https://www.iaca.int/images/news/2016/Corruption_Perceptions_Index_2015_report.pdf
- http://data.worldbank.org/indicator/NY.GDP.PCAP.CD
- http://chartsbin.com/view/1186
- http://ceeoa.org/assets/Uploads/CEEITOReview2010.final.pdf
