What’s Driving The Growth Of Third-Party Services In Eastern Europe & Local U.S. Delivery Centers?

As the third-party services industry pivots away from the factory model of labor arbitrage-based work toward digital work, having local delivery centers becomes increasingly important to service providers. Firms such as EPAM and Luxoft are investing in Eastern European operations (Bratislava, Krakow, Prague and Sofia, for instance). And Wipro has invested in a delivery center in Dallas.

Why Is Eastern Europe The New Destination for Hot Skills?

Simply put, companies go where the talent exists, not just where it’s cheaper. In the case of the increased interest in Eastern Europe, service providers seek to meet the need for increased proximity to European and US clients as well as take advantage of improved language skills that these locations offer. Driving this changing industry dynamic is the industry pivot to the new digital operating model. This model borrows heavily from DevOps with its need for persistent teams that stay with a digital journey over an extended period (often measured in years), as opposed to the factory model constantly assembling and churning teams to do specific projects.

In a DevOps orientation, the persistent team needs to be tightly connected to the business, hence requiring that it be in a similar time zone and takes full advantage of an integrated technology stack. This fundamental pivot is disrupting the managed services and system integrator models. With the same people engaged on the same subject area over several years, persistent teams build a learning curve over time. They drive business journeys through DevOps pods.

Read more in my Forbes blog: https://www.forbes.com/sites/peterbendorsamuel/2018/03/19/whats-driving-the-growth-of-third-party-services-in-eastern-europe-local-u-s-delivery-centers/#a475016c49bf