Eastern Europe leads outsourcing

BRITISH firms are increasingly looking to former eastern bloc countries for outsourcing their administrative and call-centre legwork as alternatives to India and the Far East, which have become favourite destinations for companies seeking to lower costs.

The Czech Republic is in the vanguard of the swing back towards Europe, followed by Poland and Hungary. British and American companies single them out in their search to save money by sending IT and business processing jobs to countries with a cheap but highly skilled workforce.

While India, China and Malaysia come respectively first, second and third in management consultants AT Kearney's 2004 Offshore Location Attractiveness index, the Czech Republic separates them from Singapore and the Philippines. Poland and Hungary also figure in the survey, scoring between 50% and 100% better than India and China on general business environment. This rating covers security of intellectual property rights, an important criterion for technology companies.

Paul Laudicina and Stefan Spohr, co-authors of the report say Eastern Europe 'offers attractive cost options, cultural similarities, good language skills, strong technical capabilities and minimal regulatory issues for European firms'.

Britain's Accenture recently opened in the Czech Republic following Sun Microsystems of the US, while DHL will build its European IT service centre in Prague. Poland hosts IBM, General Electric and Motorola.