Transcript KPMG Full Page Talkbook Template

Outsourcing locations:
Romania, Cluj- Napoca
9 June 2009
Mihai Rada, KPMG Romania
Presentation Overview
Introduction
CEE comparative analysis
Romania: emerging destination
Cluj-Napoca: emerging destination
Conclusions
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Introduction
• Global financial crisis drives companies to pursue rationalization measures over the longer run
• Traditional outsourcing locations rapidly approach saturation point
• A new rush for outsourcing services across the IT sector, with a number of new locations worldwide emerging as viable Business Process Outsourcing (BPO) hubs is developing
• A study realized by KPMG identified 31 possible locations for the next outsourcing boom
• Location selection criteria: needs, priorities, compromise, site visit, location specific data
• Advantages offered by the emerging cities:
 lower costs,
 size of workforce,
 quality of talent,
 linguistic and cultural similarities,
 government support and incentives
 dedicated infrastructure for IT-BPO companies,
 quality of life.
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Introduction (outsourcing locations)
America
Asia-Pacific
Europe, the Middle East and Africa
–
Buenos Aires,
– Brisbane,
–
Sofia,
–
Campinas,
– Changsha,
–
Zagreb,
–
Curitiba,
– Hangzhou,
–
Cairo,
–
Calgary,
– Ahmedabad,
–
Port Louis,
–
Winnipeg,
– Jaipur,
–
Belfast,
–
Santiago,
– Nagpur,
–
Gdansk,
–
Guadalajara,
– Penang,
–
Cluj-Napoca,
–
Queretaro,
– Davao City,
–
Rostov-on-Don,
–
Boise,
– Iloilo City,
–
Belgrade,
–
Indianapolis;
– Ho Chi Minh City
–
Tunis and
–
Lvov
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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CEE comparative analysis
600
Bulgaria
Czech Republic
Hungary
Poland
Romania
Slovakia
500
400
Internet users per 1,000 inhabitants
Source: CIA World Factbook, World Bank, Eurostat
300
200
100
0
2000
2004
2007
16 000
14 000
12 000
million EUR
10 000
8 000
Historical FDI inflow (million EUR) (2003 – 2007)
Source: UNCTAD – World Investment Report 2008
6 000
4 000
2 000
0
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Romania: emerging destination
• Foreign direct investment (FDI): Romania amounted large FDI inflows in the last years
• GDP growth: the Romanian economy has been expanding and real GDP grew by 7.1 percent in 2008
• Inflation: with a value of 6.3 percent in 2008 and expected to decline to 4.5 percent in 2009
• IT-BPO Scenario: the IT outsourcing industry comprises around 600 companies and is concentrated in and around Bucharest. Second tier cities such as Cluj-Napoca have
emerged as new outsourcing locations
• Government incentives: the maximum amount of grants offered amounts to USD 28 million (EUR 22.5 million) in the Bucharest-Ilfov region and USD 35.5 million (EUR 28.1
million) in the rest of the country
• Membership of the European Union
• Distance to Western Europe countries is smaller as compared to traditional outsourcing locations (e.g. Asia).
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Cluj-Napoca: emerging destination
Development of the current IT-BPO industry:
 an alternative outsourcing location to Bucharest, due to increasing competition
 In 1999, ISDC opened its own development and testing centre in Cluj-Napoca
 in 2006, Wirtek acquired Code Wizards
 in 2007, Genpact opened its second BPO center
 in 2008, Evalueserve opened its first European research center at Cluj-Napoca
Industry Profile- Size and Specifics:
 245 IT companies operating in the Cluj County including over 100 software companies in the city of Cluj-Napoca
 the services offered out of Cluj-Napoca include research and data analysis, order management, finance and accounting, engineering services, software development and IT
services
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Cluj-Napoca: emerging destination (cont’d)
IT-BPO key drivers:
 important financial and university center;
 benefits from a pool of qualified personnel;
 the talent pool is suited to provide multi-lingual services;
 the talent pool is suited to offer research and development services;
 the city has both, an established manufacturing and a services industry;
 the city is developing as a tier II alternative for companies with centers in Bucharest;
 the time-zone advantage;
 cost advantage over the West and East European cities;
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Cluj-Napoca: emerging destination (cont’d)
Human Resources:
 important academic center with about 62,600 students in 2007
 employers benefit from the foreign languages skills of Romanian workforce
Infrastructure:
 office space (IT parks): in 2007, the area of office space available in Cluj-Napoca was 20,150 sq. meters. The 2008 real estate projects are likely to add 84,000 sq. meters of
available space;
 telecom infrastructure: a network of 64,000 km of optical fiber is currently being developed;
 national and international connectivity: the city has a well developed rail, road (the city is crossed by the European Road E60) and flight (Cluj-Napoca International Airport is
the third largest airport in Romania) network;
 upcoming projects: the city is to be linked with Bucharest and the Hungarian border by Romanian Motorway A3;
 several real estate projects are being developed
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Conclusions
• Alternatives to traditional outsourcing locations arose
• A wide range of outsourcing locations are available for companies
• Cluj-Napoca is an important emerging location offering talent pool, lower costs, developed infrastructure
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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Questions?
Contact details
Mihai Rada
Senior Manager, IT Advisory, KPMG Romania
Mobil:
+40 744 655 832
Fax:
+40 744 800 700
Email:
[email protected]
© 2009 KPMG Romania, the Romanian member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in Romania.
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