Increasing globalization and technological advances allow business processes to develop independently of their geographical location. Hence, today, many countries are attractive places for Western companies. The availability of cheap labor ceased to be the predominant motivation and emerging markets compete for more in terms of availability and scalability of skills.
At the end of 20015, aggregate worldwide business process outsourcing (BPO) and information technology (ITO) spending rose to more than billion which is slightly less than in 2016. However, it is expected that the ITO and BPO markets will resume their growth by end of 2018.
The world market of services is highly competitive today and the differentiation of the offer, added to the incentive of other advantages such as cultural and linguistic affinities are the basic criteria of the strong competition that international subcontracting destinations face.
Nowadays, US Market has been really tough for outsourcing firm and that is the reason why they are seeking new opportunities in the European countries. EU doesn’t have flexible labor laws and that is one of the reasons why outsourcing companies would look for their expansion.
Giant companies like Wipro, Tata, and Infosys always seek opportunities in a commerce culture which has gradually become more open to outsourcing. Also, many companies believe have realized that Europe recovers economy more rapidly than that of the United States.
Earlier in Europe, outsourcing was limited to financial services and large banking firms but later telecom, automotive and chemical companies have also started outsourcing for their companies and they are gradually turning to Indian providers.
There is no Language Barrier:
In early years, language was the biggest obstacle. French and German companies were uncertain to hire Indian outsourcing companies and they were working with Accenture, Hewlett-Packard, EDS, and IBM because they have a very good command over the local language. But now this situation seems to be changing since Indian outsource firms have entered the European market. These days, Tata’s European business represents just under of $2 billion, almost 30 percent of its worldwide incomes.
In a report declared a week ago by the counseling firm IDC, Tata positioned among the top 20 IT administrations suppliers in Europe and with this, they are making it the first India-headquartered company that has made the list.
Tata is now going beyond their outsourcing projects. They have started their new venture in Germany with Tata AutoComp (TACO). It is an automotive system and components engineering segment and hired over 300 employees in Germany. Today TACO is one of Germany’s largest clients including Opel and Ford.
Visa Applications and Work Permits Differ:
The European market is seeking more growth for outsourcing firms but there is one barrier. European Union countries don’t have a common visa application or work permit. This is the reason why non-EU cannot move freely in EU borders for their projects. But after a report which is released during India-EU trade relations, they are planning to change these.