1. The document discusses Serbia as a potential offshore destination for outsourcing services. It provides an overview of Serbia's labor pool, infrastructure, education system, costs, and political/economic environment. 2. Key factors for Serbia include costs that are lower than Western Europe, a large talent pool of engineers graduating each year, and a generally stable political/economic environment. However, concerns include lack of experience in the offshore services industry compared to other locations. 3. The presentation evaluates Serbia alongside other Eastern European locations like Poland, Romania, and Ukraine as an emerging offshore location with potential for growth.

1. Serbia as an Offshore
destination
Petar Kocovic
e-razvoj konference
March 27, 2015
Kolarac Foundation

2. Bangalore IT park India

4. What Will Global Delivery Look Like in the Future?
Low(er) Cost
Global Resources
High Quality Local
Talent
Industrialized Low
Cost Services
Global Delivery
Network
Global
Management
Teams
Business Geo-
Footprint
Global Insourced
Centers
Labour Intensive
(Customized)
More
Locations More
Vendors
Broader
Services
Greater
Integration

5. Global Delivery Risk and Challenges
Country Risks Cost Related Risks
Natural disasters (earthquake, tsunami)
“Arab Spring”
Riots/Demonstrations/Civil unrest
Drug violence
Terrorism and physical security
Bribery and corruption
IP/Data protection
Internet/Web censorship
Email interception
Country debt crisis
e.g. Salaries, Real Estate, Currency
Fluctuations, Hidden/Peripheral Costs
Workforce Related Risks
e.g. Attrition, Staff Rotation. Quality, Visa
issues, Quantity/Sustainability, etc.
Skills-Related Risks
Vendor-Related Risks
Delivery Model-Related Risks

6. Every Location Is Not “One-Stop Shop”
Poor Availability Fair Availability Good Availability
Argenti
na
Brazil Mexico
Czech
Republi
c
Poland Russia
South
Africa
China India
Phillipp
ines
Application Services
Remote Infr. Mgmt
Service/Help Desk
Contact Centers
Back Office BPO
Skills-Related Risks

7. Finding the “Right-fit” Provider is Tough
Vendor-Related Risks
Global Providers
Even the biggest
aren’t everywhere:
- Significant scale
- Process expertise
- Global delivery
networks
- Domain expertise
- May lack flexibility
Local Providers
Can be hard to find:
- Flexible, responsive
- Location savvy
- May lack scale
- Immature processes
- May not be onshore

8. Cultural Differences
Multi-
Active
Linear-
Active
Reactive Vietnam
China
Korea, Thailand
Indonesia, Malaysia,
Phillipines
India
Iran, Turkey
Saudi Arabia, Arab countries
Sub-Saharan Africa
Brazil, ChileHispanic America,
Argentina, Mexico
Italy, Portugal, Spain,
Greece, Malta, Cyprus
Russia, Slovakia
France, Poland, Lithuania
Belgium
Australia, Denmark,
Ireland
Austria, Czech Republic,
Netherlands, Norway,
Slovenia
USA
Germany, Switzerland,
Luxembourg
UK
Sweden,
Latvia
Finland,
Estonia
Canada
Singapore
Taiwan,
Hong Kong
Japan
Key:
blue - linear-active-cool, factual
decisive planners
red - multi-active-warm, emotional
loquacious, impulsive
yellow - reactive-courteous, amiable,
accommodating, compromiser,
good listener
Source:
Richard Lewis:
When cultures collide

9. Loquacity
Generosity
Impulsiveness
Tendency to deceive
Boastful manner
Unpredictability
Stubbornness
Openness
Low legal consciousness
Flamboyance
Hospitality
Charm
Machismo
Volatility
Nationalism
Romanticism
Unpunctuality

10. Managing Vendors with Offshore Resources
- The Cost and Workforce Challenges
Labor and real estate costs grow as demand overtakes supply of
quality resources
Exchange rate fluctuations require planning and flexibility
Quality and consistency challenges will continue, due to attrition
and staff rotation.
Buyers must agree on “Key personnel” clauses, active succession
planning and concurrently working with vendors.
Linear growth of offshore service providers is not sustainable
Providers will increasingly turn to alternative delivery models to manage
continued growth.

11. Where to Locate Resources?
What delivery personnel
should be locally based?
Should any of your staff be
located in the offshore
delivery centre?
When/how often should
offshore staff visit your
premises?
Who/how often should you
visit at the offshore delivery
center?
Strategy Management
Demand Management
Services Management
Relationship Management
Performance Management
Program Management
Contract Management
Financial Management
People Management
Risk Management

12. Some Offshore Locations

13. Gartner 30 Leading Locations for
Offshore Services, 2013
Latin America
Argentina
Brazil
Chile
Colombia
Costa Rica
Mexico
Peru
Uruguay
EMEA
Belarus
Bulgaria
Czech Republic
Hungary
Mauritius
Morocco
Poland
Romania
Russia
Slovakia
South Africa
Turkey
Ukraine
Asia/Pacific
Bangladesh
China
India
Indonesia
Malaysia
Phillipines
Sri Lanka
Thailand
Vietnam
Globally: 63% of buyers use Latin America
55% use EMEA, 63% use APAC

14. What Countries Are Most Commonly
Used, 2013
Latin America %
Mexico 50.2
Brazil 46.8
Argentina 22.1
Chile 16.4
Costa Rica 11.0
Columbia 10.7
Uruguay 6.5
Peru 6.1
Other 5.7
EMEA %
Poland 25.3
Russia 19.2
South Africa 16.6
Czech Republic 15.3
Romania 14.0
Morocco 12.2
Hungary 11.4
Slovakia 9.6
Turkey 9.2
Mauritius 7.9
Bulgaria 7.4
Belarus 6.6
Ukraine 3.1
Asia Pacific %
India 48.5
China 45.9
Malaysia 13.9
Phillipines 10.9
Indonesia 8.3
Thailand 6.8
Bangladesh 5.6
Sri Lanka 4.1
Vietnam 3.8
Other 1.9

15. Additional Countries with Potential
Americas: Cuba, Dominican Republic, Ecuador, El Salvador,
Guatemala, Honduras, Jamaica, Nicaragua, Panama, Puerto Rico,
Venezuela
Asia Pacific: Pakistan
EMEA:Algeria, Armenia, Bahrain, Croatia, Cyprus, Dubai, Egypt,
Estonia, Ghana, Isle of Man, Kenya, Kosovo, Latvia, Lithuania,
Macedonia, Madagascar, Malta, Moldova, Nigeria, Saudi Arabia,
Senegal, Serbia, Slovenia, Tunisia, Uganda

16. EMEA Ratings
Country Language
Governme
nt support
Labor Pool
Infrastructu
re
Educationa
l System
Cost
Pol & Econ
Environme
nt
Cultural
Compatibili
ty
Global and
Legal
Maturity
Data/IP
Security
and
Protection
Belarus
Bulgria
Czech R.
Hungary
Mauritius
Morocco
Poland
Romania
Russia
Slovakia
South
Africa
Turkey
Ukraine
Serbia
Poor Fair Good Very Good Excellent

17. One More Thing…

18. Determine the Effectiveness of Your
Service Provider’s Global Delivery Model
1 Range of Services
2 Quality and Professionalism
3 Domain Expertise
4 Responsiveness
5 Innovation
6 Pricing
7 Delivery Process/Methodology
8 Knowledge Management
9 Contracting Practices
10 Commercial Flexibility/Maturity

19. Sources
CIA Factbook
US Department of State
UNESCO
OECD
Asian Development Bank
International Labour Organisation
Federation of International Trade
Association
Business Software Alliance
US Agency for International
Development
Vision of Humanity
Factiva DB
OneSource DB
IHS Global Insight
Economist Intelligence Unit
EBSCO Information Services
World Audit
Transparency International
IMD World Competitiveness Yearbook
US Dept of Commerce
ISI Emerging Markets
Multiple Government Resources
World Bank

20. Serbia as an
Offshoredestination
Petar Kocovic
e-razvoj konference
March 27, 2015
Kolarac Foundation