Weaker dollar pushes Eastern European IT outsourcers
towards the EU

Eastern European outsourcing companies are moving away from their traditional US customers and are looking to the EU to provide them with new business, according to Sciant CEO Steve Keil.

In an interview for the outsourcing organization, Trestle Group’s magazine, Keil said that the weaker US dollar was putting a downward pressure on margins for Eastern European outsourcing companies.

Keil said this is forcing them to look to EU customers rather than the US customer base which has been their traditional market. “If the dollar continues to devalue relative to the Euro, I can predict that US customers will look farther and farther offshore, to lowest cost locations such as Vietnam, China, and Indonesia,” Keil said.

Unable to compete with such places on the basis of cost, the Eastern European IT outsourcing companies will have to move their operations up-market and work much more closely with EU customers.

According to Keil European companies have become aware of the benefits of having a highly skilled workforce closer to them. He said that with Eastern European suppliers being only a two-hour flight away and one or two time zones, it's quite easy to clarify and resolve issues.

“In terms of culture, I believe that Eastern European suppliers are much less culturally distant than most other geographic options, including India and China, which in turn facilitates the business relationship,” Keil said.

You can read more of the Keil interview here