Finam
Russia's market of the outsourcing of business processes is not easy to define or evaluate.
Sometimes, it seems that various analysts are trying to diminish its volume. We will leave it to their conscience. The only thing where they may be right is that, in Russia, business processes outsourcing has just begun to unfold. There are lots of reasons why it is so slow on the uptake as compared with the rest of the world.
As is well-known, in Russia, the provision of such services came rather late. Most BPO providers came to the domestic market after the year 2000, while the first American outsourcing contracts date back to the 1970s or 1980s.
Besides, unlike, for instance, Russia's outsourcers of software developing, our BPO providers could, in the beginning, work only at home. This is why they developed slowly and had small turnovers.
What is in the way?
This is just the top of the iceberg. There are other, deeper, mentality-related problems slowing down the development of the outsourcing of business processes in Russia.
One of them is the fragmentary nature of the BPO market. Because the marginality of outsourcing business is low, the fast growth of turnovers is impossible without lots of outside investments or mergers. This is why this market is likely to soon see a large number of mergers and takeovers.
Also, there is a lack of project administration culture. In Russia, people are still slow to believe that adequate administration can make a distributed team just as efficient as a department working in a single office. Tasks distribution is easy when all employees are right next to their boss. In the meantime, working with an outsourcing company requires planning and time management skills. This is why demand for outsourcing services may be considered as an indirect indication of the managerial qualities of some or other company administration.
Shadowy economy is a traditional Russian problem that necessarily affects BPO. Outsourcing business processes is an indication of the transparency of accounting and personnel administration of a company. Quite understandably, shady companies prefer to stay away from outsourcing.
Finally, there is the universal lack of trust. It affects not just relations between clients and suppliers but the whole society. According to certain research, where trustfulness is concerned, the Russians occupy the fourth place from the bottom of the list of respondent countries.
This should tell one a lot, including how well economy is developed, business being not just money but also trust. It tells the observer about trust between creditors and debtors, employers and employees, providers and clients. The outsourcing of business processes is the first to succumb to the universal lack of trust, outsourcers coming into possession of information that is vital to companies.
Is this situation likely to change in the future?
Most likely, yes. Outsourcers no longer rely on domestic demand only. This is, undoubtedly, a large step ahead, European and American outsourcing market volumes being beyond any comparison with Russian ones. At this time, according to Gartner, the volume of the world's outsourcing market is over $370 billion (Gartner, Inc. Forecast: IT Services, 2008-2015, 2011 Update. June 16, 2011. Russian data is, of course, not included here). Surely, Russia cannot compete for low-level contracts with India, China and Latin America, the largest providers of these services, our labor being several times as expensive. Yet there is no reason why we should not offer internationally our project management skills.
There is a stable tendency towards merging BPO and ITO services. At this time, it is practically impossible to outsource accounting without also outsourcing attendant IT systems. Increasingly often, BPO services are provided in the Software-as-a-Service format. This allows service providers to easier optimize their price rates and cut costs.
Progressing telecommunications allow outsourcing service providers to offer their products to companies located in the most remote regions of Russia and in the CIS and beyond. This simultaneously leads to the growth of their client bases and the possibility of creating service centers away from large cities, consequently cutting service rates.
Also, of course, serious hopes are related to the ongoing sanation of economy and the shrinking of the shadowy sector.
One may say that, in Russia, demand for BPO services keeps growing. An increasing number of domestic entrepreneurs leave shadows and outsourcers head for new heights. Market volumes keep increasing. This, on the whole, allows to make rather optimistic forecasts about the prospects of the outsourcing of business processes in Russia.
By LUDMILA SHUSTEROVA, Deputy General Director
BDO Outsourcing Division
