Indian IT cos eye Eastern Europe

Near-shore Capability

- IT firms suffering from high attrition levels

- Exploring options to diversify talent base

- Eastern Europe provides that opportunity

- Cost is cheaper than western economies though higher than India

Bengaluru: Indian IT services and engineering services companies are betting big on Eastern Europe region through setting up new centres and acquiring companies having strong presence in this region. Analysts and company officials are of the opinion that availability of skilled talent and capacity to act as a near-shore centre for serving European clients are the reasons behind the rising interest in this region. "Eastern Europe region is an attractive region from talent perspective. The region doesn't have many tech centres and startups. Still, this region is one of the preferred locations for getting talent for service providers. This is the only place after India where service providers get good talent in their domains of choice," said Pareekh Jain, an engineering services sector expert and Founder of Pareekh Consulting.

Some of the largest acquisitions in recent time by Indian technology companies have happened in this region. Tech Mahindra has acquired European Com tec Co IT (CTC) for 310 million euros (around Rs2,628 crore) this month. CTC has development centres in Latvia and Belarus and over 700 skilled IT professionals will be part of Tech Mahindra post this acquisition.

Similarly, HCL Technologies acquired Hungary-based data engineering services provider Starschema Ltd for $42.5 million this month. This acquisition is expected to bolster HCL Technologies' capability in data-driven digital engineering and increase its presence in central and eastern Europe.

Engineering services firms like L&T Technology Services (LTTS) is also betting big on this region. Recently, the company said that it would expand its Krakow, Poland centre by adding 300 engineers in next three years. This move will expand its presence in Eastern Europe apart from delivering services as a near-shore centre to other European and North American clients.

"The Krakow R&D centre will serve as a near-shore centre to Western European and North American clientele across verticals," Amit Chadha, CEO & MD of LTTS, said. Analysts said that in talent term, Eastern Europe region is comparable to India."Eastern Europe can be compared with India in talent perspective. The cost is cheaper as compared to other western economies though higher than India. Also, centres in Eastern European region usually act near-shore centres for serving European clients," said Ashis Dash, research analyst at brokerage firm Sharekhan by BNP Paribas told Bizz Buzz.

Given the talent war and high attrition levels seen in India, IT firms are constantly exploring options to diversify their talent base and the region provides that opportunity. Moreover, the focus comes at a time when Indian players are actively looking at increasing revenue share from European region.