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Infosys expands 'nearshoring' facilities

Outsourcer claims that by developing its operations in Europe it can tackle one of the biggest reasons why outsourcing relationships fail — cultural differences
Written by Andrew Donoghue, Contributor

Indian outsourcing specialist Infosys is expanding its presence in the Czech Republic as part of a wider strategy to meet what it claims are European customers' needs for local language skills and regulatory compliance.

The company announced on Wednesday that it is adding another 350-seat facility to its existing site in Brno in the Czech Republic. The new centre will open in January 2007 and will provide infrastructure management, ERP and CRM outsourcing services.

Infosys claims that around 80 percent of the workers in its Czech facilities are hired locally to take advantage of local language skills including German, French and Spanish.

"As European customers continue to adopt a global sourcing approach, we will continue to invest in geographies where local talent provides the specialist skills required to respond to EU regulation, language capabilities, local market understanding and cultural diversity," said BG Srinivas, head of Europe, Middle East and African markets at Infosys.

The outsourcer also claims that an increased presence in Europe should act as a stepping stone to full offshoring to India for those European customers who may have reservations about handing over services and operations to a services company based on another continent.

"Our nearshore operations also eliminate the perceived risk by clients who are offshoring for the first time, as a first step, to allow them to become comfortable with the concept of outsourcing," added Srinivas.

Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to recent reports. In an Accenture study, two-thirds of 200 US business executives said that miscommunication arising from cultural differences has caused problems when outsourcing offshore.

Silicon.com's Andy McCue contributed to this report.

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