GBS World Competitiveness Index provides qualified buyer rankings for Eastern European locations
Emerging Europe’s 2022 Future of IT Report reveals the most competitive IT sectors in Central and Eastern Europe in alignment with the GBS World Competitiveness Index
The 2022 edition of the 200-page Future of IT report by Emerging Europe includes a 12-page chapter with results and key findings from international buyers reflected in the GBS World Competitiveness Index. Prepared in collaboration with Emerging Europe and GBS.World, the chapter looks at how global buyers of IT services perceive Emerging Europe’s IT sourcing value proposition and the region’s digital and IT outsourcing strengths and opportunities.
The index and rankings were drawn from extensive survey data from an annual global business services (GBS) vertical industry demand survey conducted on behalf of GBS.World. A total of 360 interviews were conducted with global enterprise executives from organizations that outsource and offshore services. These organizations are based in Australia, Europe, the United Kingdom, and the United States. The executives were asked to rank and rate each country that they outsource to, including service level delivery across various key business process areas. As a result, the top countries across four global regions – including Emerging Europe – were ranked according to their final scores. At a regional level, the top 10 countries in each region were also placed in three categories: High Performer, Proficient and Capable.
Recipients of increased global ITO demand
Poland is consistently rated as a high performer across various digital and ITO subcategories, claiming the top spot in general ITO services, technical help desk support and data analytics and data science outsourcing. Czechia also appears as a strong performing digital and ITO delivery location, appearing in the top five across all three of these subcategories. These countries were also ranked in the top three in Emerging Europe’s IT Competitiveness Index published in the Future of IT report.
Emerging Europe IT Outsourcing (Scores out of 8):
Romania (general ITO), Hungary (technical help desk support) and Slovakia (data analytics and data science outsourcing) also scored well in various subcategories of the GBS World Competitiveness Index.
Emerging Europe Technical Help Desk Support (Scores out of 8):
Emerging Europe Software Development Outsourcing Score out of 8
Source: 2021 GBS World Competitiveness Index
Growth drivers in Emerging Europe’s burgeoning ITO environment
Moves among global enterprises to allocate more IT functions to third-party providers is a contributing factor in Emerging Europe’s rise as a global ITO delivery hub. Global ethernet services (38.24%) and managed server hosting (35.29%) are the top IT functions that will be outsourced over the next 12 months, as global enterprises look to reduce on-premise IT costs.
ITO functions global enterprises plan to outsource over the next 12 months:
In addition, a range of complex digital functions will be increasingly outsourced over the next 12 months, the most prominent being machine learning, in which over 38% of global enterprises will allocate to ITOs. Blockchain and artificial intelligence (AI) will also be among the most outsourced digital functions during the course of the year.
Digital functions global enterprises plan to outsource over the next 12 months:
Key findings from the Future of IT Report
The Future of IT Report demonstrates how important the IT sector now is to just about every country in the region. According to the report, the Emerging Europe region produced more than 159 billion euros worth of IT services in 2020, a 40% rise since 2016. More than 32 billion euros worth of IT services were exported, making an important contribution to the region’s balance of payments.
Based on the broad categories of talent, IT infrastructure, economic impact and current business environment, Estonia’s IT sector is rated as the most competitive in Emerging Europe. It clinched the top spots in 13 of the 47 parameters in Emerging Europe’s IT Competitiveness Index (Estonia also ranked in the top 10 software development and IT outsourcing subcategories in the GBS World Competitiveness Index). Poland, Czechia, Lithuania and Slovenia were ranked as the region’s top five IT sectors.
Catching the attention of global ITO buyers and investors is the region’s impressive production of ICT graduates entering the workforce, reaching over 82,000 in 2020 from 76,000 in 2016. Kosovo, ranked 10th overall, holds the leading position for IT talent.
Moreover, the growing IT talent pool is cost competitive compared to those in source markets, with the report recording an average ICT salary of €1,681 per month. Georgia has the lowest average monthly ICT salary of €531, followed by Azerbaijan (€558) and Ukraine (€646).
Nearshoring and offshoring opportunities
Its well-educated population, competitive price points and developing IT infrastructure has drawn the attention of nearshore and offshore enterprises looking to outsource their IT and digital functions to locations in Emerging Europe.
In fact, as organizations become more digitized, they are increasingly looking outward for their IT and digital needs with Emerging Europe as a popular choice. An analysis by the GBS World Marketplace, indicates that enterprise buyers have started to shift and spread their outsourced projects, including IT functions, from the traditional markets such as India, the Philippines and Malaysia into emerging GBS/ITO delivery locations, including those in Emerging Europe.
You can download your free copy of the Future of IT 200-page report here.
It includes the 12-page chapter with the digital and ITO results from the GBS World Competitiveness Index.