Once the tool of manufacturing companies alone, business process outsourcing (BPO) has come to prove its huge value in today’s dynamic market, across industries. According to Grand View Research, the global outsourcing market was valued at $261.9bn in 2022 and is expected to record a compound annual growth rate of 9.4% until 2030.
Many businesses are already convinced of the benefits of delegating IT-intensive operational processes to an external provider. They can access greater flexibility, cost savings and the ability to embrace new and innovative services, while redistributing employees’ time to pursue strategic objectives.
However, choosing the right business environment for a BPO partner is crucial. Choosing a BPO hub with low barriers to entry, a highly trained labour force and low operating costs can offer transformative business opportunities. Get it wrong and those opportunities could be missed.
Outsourcing opportunities
In today’s global market, which has been impacted by macro events including the Covid-19 pandemic, geopolitical instability and the climate crisis, businesses are seeking new ways to maximise their efficiency and agility. At the same time, in order to remain competitive, they aim to reduce operating costs and accelerate their progress towards strategic investments.
A number of key trends and growth avenues are offering BPO companies new opportunities to expand. One is innovation. The growing adoption of technological advances like cloud computing and AI is creating new operational efficiencies and capabilities. The rise of cloud computing is one of the drivers of BPO adoption, enabling BPO operators to offer tech-enabled reduced time to market, lower costs and improved quality. Outsourcing grew significantly as a consequence of the Covid-19 outbreak; the corporate world has adapted and teams can now be located across continents, enabling decision-makers to set up cheaper operations in new markets with highly skilled talent pools.
Another key trend is the diversification of BPO opportunities for businesses in both scope and scale. Back-office BPO services can include business support operations such as accounting, compliance, human resources, IT services, payments and quality assurance. Businesses can also consider outsourcing front-office services including customer-related functionalities such as tech support, sales and marketing. Today, the demand for BPO is on the rise in industries including healthcare, banking, IT and telecoms.
Businesses have revolutionary operational opportunities at their fingertips thanks to the tech-driven, ever-expanding world of business services covered by BPO. Decision-makers can reallocate time and resources away from peripheral functions to focus on core competencies like customer relations and product leadership, pursuing their overarching business strategy in order to remain competitive. BPO partners can often offer lower costs, enhanced service quality and more accurate reporting compared with in-house departments. The result? Greater business productivity and the agility to cope with the modern market.
The right location
For businesses keen to access BPO opportunities, there remains the challenge of selecting the best partner in the best business environment. Factors including tax rates, regulatory restrictions, talent availability and geographical location all play a role. For example, a lower income tax environment and a cheaper labour force means both BPO companies and their clients stand to gain a competitive edge by benefitting from Georgia’s unique business environment. Meanwhile, a highly skilled, multilingual workforce will enable outsourced functionalities to offer a high-quality service.
Little wonder that several giants of the BPO sector are expanding their presence in Georgia. Concentrix, Asseco, Evolution, EPAM and Majorel are just a few examples. According to one Majorel spokesperson, Georgia’s “engagement of local employees, business-friendly investment climate and partnerships with both state and private local institutions” made it an ideal destination to set up operations and grow.
Georgia is home to a multilingual, skilled and competitively priced workforce. The country’s relative energy independence means it can offer world-beating living costs. More than 40,000 employees are providing offshore IT and BP activities. By this year, the government aims to upskill 5,000 IT specialists. This workforce – totalling 1.6 million people, nearly half of which are under the age of 45 – comes with a flexible labour code, with labour productivity forecast to grow at 5.8%. The government is financing and facilitating tailor-made vocational education programmes, with about 2,400 new students enrolling on IT courses annually. Georgia’s competitive strength is reflected in its thriving service industry; exports in the sector expanded by 61% between 2020 and 2021.
For businesses, a World Bank investigation determined that Georgia was the world’s seventh-easiest country in which to do business. It is the third least tax burdened country in the world by total tax rate, including 0% tax on retained profit. It offers a strategic location, cultural similarity and time proximity to major markets; citizens of 98 countries can travel to Georgia without a visa and stay up to one full year. High-speed internet and robust network connectivity make it ideal for IT activities, and the Log in Georgia government programme will provide all settlements with broadband internet by 2025.
Georgia’s FDI grant provides special incentives for BPO, offering 15% cashback on qualifying capital expenditures and training costs. The scheme aims to promote the growth of FDI and drive an influx of knowledge and technology and the creation of new jobs. IT activities are also subject to a preferential tax regime, with personal and corporate income taxes reduced to 5% each for international companies.
Selecting the right BPO partner is an important decision for any business. Georgia offers an ideal environment for offshore business processes. Download the whitepaper on this page to find out more.
