Automation, Robotics to Accelerate sourcing sector’s development in SEE

//Automation, Robotics to Accelerate sourcing sector’s development in SEE

Article for Bulgarian Association Outsourcing, interview with Catalin Iorgulescu, VP ABSL

Cătălin Iorgulescu has been present in the ABSL Board during the last 5 year and actively supported its development from the start to the present level by initiating and deploying the PR strategy aimed at increasing the Brand awareness and recognition of ABSL as the most prominent voice of the industry.

During this time, he also acted as an ambassador of ABSL by bringing new members, representing ABSL in various meetings with potential investors and State Authorities, and helping organize major ABSL events.

Over the last 20 years he was General Manager for Samsung SSCE, Managing Director of WNS Romania, CEO for Craft Worldwide Romania and held top management positions within McCann Erickson Group and Deloitte.

Catalin is a Fellow ACCA member and holds an ISACA Certification as Information Systems Auditor since 2002 and respectively 2003.

What are your expectations regarding the development of the outsourcing sector in Romania and across Southeast Europe and what are the key factors influencing it?

In the past few years, Southeast Europe has strengthened its position as a leader in nearshoring for many global brands. Cultural and geographical proximity, highly-skilled workforce and costs savings bring value to businesses and create opportunities for innovation in outsourcing companies.  The growth of IT industry and strong technological expertise played an important role as well and I expect that automation, robotics and artificial intelligence will accelerate the sector’s development in the region.

In Romania, the Business Services industry is already mature but continues to grow. I expect the companies will accelerate the digital transformation of their business models, in order to remain relevant in the next years. We can say that the continuous and relentless change of the market conditions is the new normal, where technological innovation, blockchain and artificial intelligence are reshaping the nature of the industry.

What are the main challenges that companies in the industry need to address and do they create opportunities for cross-border cooperation?

I think that one of our challenges is uneven talent distribution. We have cities that experience shortage in workforce for a certain skillset or language and unused talent in other geographical areas. We need to address this issue and see it as an opportunity to grow. Cross-border cooperation can be a solution for attracting more projects in the region – for example Romania excels at Latin languages while Bulgaria has a significant talent pool able to work in Slavic languages.

Romania and Bulgaria, their capital cities in particular, have been at the center of the development of the sourcing sector in the region but new cities have been emerging as hot locations. How do you expect that the sourcing industry landscape in Southeast Europe will change in the coming years?

We are one of the most desired nearshoring destinations for local and multinational companies which are expanding their operations in the region due to skilled workforce and labor arbitrage. For sure, Bucharest, Cluj, Iasi, Timisoara are at the center of our industry but, compared to the last years, we have observed an increased interest from investors in 3rd tier cities, especially in the university hubs like Brasov, Craiova, Galati, Oradea and Sibiu. Around 50% of ABSL members have operations in Bucharest as well as in another Tier 2 or Tier 3 city. Moreover, new delivery solutions (e.g. work from home) will help companies access untapped resource pools.

Do you see any risks or opportunities for the sector arising from a possible Brexit?

Great Britain is one of the biggest outsourcers in the world and a lot of companies from this region provide different services for the UK. We will have to see how future taxation and labor migration changes induced by Brexit will influence the industry – this is uncertain now since Brexit terms are still being negotiated.

How can the governments in the region support the sector?

Fiscal and legislative stability are a must for economic growth because predictability is a prerequisite for any business case and I think the governments can help a lot in this respect. Another important factor influencing the growth of our industry is our educational systems which need to be adapted to the new requirements of the labor markets.

I know it is not easy, especially when we talk about state administration, but the investment in education drives talent pool development and hence growth. In 2015 ABSL Romania launched, in partnership with the Bucharest University of Economic Studies (ASE), the Business Services Master Program. In 2018, 98% of the first batch of graduates were employed in the sector. This clearly confirms that investing in education is an essential pillar for the future of our  industry.

Do you see the development of the sector opening up demand for new skills?

Our industry is at the forefront of innovation. A lot of our services are new, or have been transformed significantly in the last 5 years. Our companies are investing in R&D and talent development in parallel and that is constantly creating new jobs based on new skillsets.