Business Forum • 21 June, 2024 at 11:35 AM
In a period marked by global economic challenges, the Romanian Business Process Outsourcing (BPO) market continues to grow year on year, offering companies essential solutions to reduce costs and optimise operations. Computer Generated Solutions (CGS) Romania, a leader in this sector, emphasises the importance of outsourcing as a strategic response to current uncertainties. With an estimated value of $375 million in 2024, the local BPO market is poised to grow by more than 30% over the next five years. Romania is thus establishing itself as a strategic hub for investment, especially thanks to a well-trained labour force.
Thus, according to Statista estimates, the local business process outsourcing market could reach nearly $500 million in the next five years. Globally, the US dominates this segment with a market value of over $146bn this year.
"With a steadily growing economy, supported by consumption and exports, plus a favourable tax regime and a low cost of living, Romania is a strategic location that is increasingly on investors' radar. The supply of a well-educated workforce, with a high level of specialisation in areas of interest such as IT or engineering, has encouraged the steady development of support services, and Romania has all the prerequisites to become a key player in the global market," said Vladimir Sterescu, Country Manager CGS Romania.
Eastern European countries: Key markets for the outsourcing industry
Romania and Eastern European countries such as Bulgaria and Poland are key markets for the BPO industry in the region. These countries have attracted investment due to their low costs and well-trained labour force. More recently, investments in automation and artificial intelligence technologies continue to grow to improve efficiency and reduce costs.
"There is also a growing trend of nearshoring, with companies favouring suppliers closer geographically to improve communication and reduce cultural barriers. BPO providers are specialising in specific industries, such as finance and healthcare, to provide high quality and customised services," added Vladimir Sterescu
The influence of inflation on the outsourcing industry
In recent years, inflation has become a central issue in the economic landscape in Europe, influenced by a number of significant factors, which has impacted various industries, including the outsourcing sector.
Inflation has reached record levels in Europe, and the cumulative effect of rising costs has been to reduce the profitability of many companies, causing them to look for cost-cutting solutions, including outsourcing non-core activities. "Outsourcing companies can help clients cope with inflation by reducing operational costs and increasing efficiency. By outsourcing non-core activities such as technical support, customer care services and data management, companies can allocate their resources to core activities. BPO provides access to modern technologies and high-performance management practices that can improve service quality and reduce response times while increasing efficiency.
In Romania and in the region, CGS has built one of the largest support centre presences, ensuring access to a significant number of talented people.
Advantages of the Eastern European outsourcing market
The Eastern European outsourcing market offers excellent conditions for clients, combining competitive costs with high quality services. Unlike regions in Asia, where prices can be lower, Romania stands out for its professionalism, quality and use of advanced technologies. What's more, the market in this region benefits from an educated and multilingual workforce, enabling customised and efficient solutions for clients around the world.
"BPOs in Eastern Europe are an attractive option due to the balance between cost and quality. Although outsourcing to these firms can be more expensive than in other regions (e.g. Asia or South America), the value offered is superior due to the higher degree of education, resulting in a high quality standard. Thus, clients benefit from outsourcing services that not only reduce costs, but also improve operational efficiency and ultimate customer satisfaction," emphasises Vladimir Sterescu.
Global Challenges Accelerate Business Process Outsourcing
In recent years, the global economy has been under significant pressures, from the COVID-19 pandemic to the outbreak of trade and military conflicts, that have created uncertainty and forced companies of all sizes to find solutions to adapt to new socio-economic and geopolitical realities on the fly.
"Economic disruptions in recent years have prompted many organisations to outsource critical processes to trusted suppliers, aiming not only to reduce costs but also to increase efficiency. Overall, this has triggered a paradigm shift in the industry, accelerating the shift towards more flexible, digital and results-driven BPO models," the company representative emphasised.
Stable countries in Central and Eastern Europe, including Romania, have benefited from an influx of new business, which has generated increased interest in this type of services. At a global level, the conflict has emphasised the importance of geographic diversification, prompting companies to expand their BPO operations in multiple locations in order to reduce risks.
"All these transformations mean that the Romanian outsourcing market is witnessing steady growth driven by significant opportunities in a challenging global economic context. With a well-trained and adaptable labour force, continued investment in technology and a strategic position in Eastern Europe, Romania is well positioned to become a key player in the global outsourcing market," concluded Vladimir Sterescu.