Bulgaria business process outsourcing / BULGARIA BPO
Guide to Bulgaria Business Process Outsourcing / bULGARIA BPO
introduction to bulgaria business process outsourcing
Developments in telephony, fiber optics, satellite communications and widespread use of the Internet, made Internet-based communication and transfer of data possible, paving the path for carrying voice and data cheaply over long distances, leading to the opening up of outsourcing opportunities from anywhere to anywhere and the development and growth of global outsourcing locations distributed across the world.
There has been an evolution at each stage of development.
Primary focus on getting away from the high-cost economies of the West and process in an economical manner, in a place providing much lower labor cost, gave way to process improvements which moved to the phase of BPO centers showing the path to delivery excellence, eventually moving on to innovation and flexibility.
The nature of processes outsourced has also kept evolving. Labor-intensive, repetitive processes like data-entry and medical transcription were the first to be outsourced. As confidence grew and telecom costs kept coming down, it gave way to transaction processing and Call Centre activities, evolving to more complex tasks like F&A, HRO and Legal which could be defined in terms of some rules, but also required exercise of some thinking on part of the processor.
Of course, developments in the world have also led to changes in the mix of services being outsourced. Ecommerce was perhaps not even a gleam in anyone’s eyes when BPO started, but today data-entry and other support services for ecommerce businesses is a large component of BPO work. As is data labeling and annotation for creating training data for the development of Artificial Intelligence (AI) models.
Structure of companies and the contracts they sign has also kept evolving. The early captive centers were an extension of the parent and did not require too much contract negotiation or specification of processes.
As the business evolved, the need to define measures through which the contract would be measured became apparent.
Contracts started becoming detailed and complex.
The initial FTE based deals, defining work outsourced in terms of people employed, gradually started giving way to output based deals where compensation would be based on the amount of work done.
The industry has also experimented with outcome or result based deals.
Of course, some things don’t change. Cost reduction is still an objective. Data-entry work is still being done, perhaps for different businesses and for different requirements.
Even though telecommunication has made it possible for your work to be done from anywhere, the choice of a partner and location continues to be an important business decision.
The rise of Bulgaria BPO : Business Process Outsourcing in Bulgaria
With an area of a little over 100,000 sq. km., population around 7 million and monthly gross wage of Euro 650, Bulgaria is an unlikely contender in the BPO stakes, traditionally dominated by locations with a large population, multiple urban centers and low wages.
But it has emerged strongly with advantages that outweigh what on the surface may be limitations. Its membership of the EU creates a regulatory environment that inspires confidence in investors as well as clients’ evaluation location options.
With well established civic systems like power supply and transportation, it has no hidden costs, unlike other places where businesses need to cater to diesel-based electricity generating units and transporting staff to and from work.
It has a well established and proven educational system which delivers a workforce of a quality far higher than many others.
Its accessibility in terms of travel time from major European capitals as well as time zone displacement from the farthest reaches of the continent, make it a preferred destination for clients who have a need for physical contact, even if it is occasional.
It is now an important contributor to the economy, paying EUR 30.5 million in taxes in 2019, 2.5% of all taxes paid. And the contribution is growing in percentage and value terms.
BPO location – making a choice
Choosing a place for locating a business or service is a normal business decision.
As an outsourcer, you need to ensure that the outsourcing decision adds value to the business, like any other decision you take for the business.
With BPO being a global business, while it provides you with plenty of choices, it also makes the decision more complex.
What are the factors that might be relevant when you choose a location which will become the primary delivery point for a process that is a part of your business?
Political Environment
The governance and political climate of a nation is where the other sectors take cues from. Stability and transparency in decision-making at the governance level is important for a business to develop the confidence to invest.
It is difficult for a business to make an investment decision based on a certain set of regulations if it has experienced that the rules keep changing on the whim of the person or persons in power.
oWorkers operates in a free, transparent, competitive environment provided by Bulgaria and the same is available to clients who can be free from concerns of exploitation and other practices, especially with respect to human resources, when they partner with us.
Freedom House, a non-profit that rates nations on their level of freedom, rates Bulgaria as a ‘free’ state with a score of 78 out of 100 in the latest evaluation.
Among major BPO destinations, this is one of the highest scores, perhaps second only to Poland, also in the EU. A few comments from the ‘Freedom in the World 2021’ report:
‘The authorities generally respect constitutional guarantees of freedom of assembly.’
‘Bulgaria’s judiciary has benefited from legal and institutional reforms associated with EU membership, but it is still prone to politicization.’
‘Bulgaria’s democratic system holds competitive elections and has seen several transfers of power in recent decades.’
Economics and Business
Since we are talking about businesses, the economic situation perhaps is second only to the political environment when suitability of a location needs to be evaluated.
Like the political environment, the economic environment needs to be governed by policies that are stable and transparent for private businesses to get confidence to invest, along with a system of governance considered fair.
Bulgaria has a Real GDP Annual Growth Rate of 3.4% and GDP per capita of Euro 8809. Being integrated into the European economy ensures consistency and transparency for Bulgaria Business Process Outsourcing providers like oWorkers who can operate with confidence.
Foreign exchange risks are limited with the currency being pegged to the Euro.
With flat 10% corporate and personal income taxes, Bulgaria, without doubt, offers the lowest operating costs in the region.
Human resource availability for Bulgaria BPO
Being a people dependent industry, this is clearly a key variable to evaluate. Also, because of reasons good and bad, attrition is a feature that the industry has to contend with, requiring a continuous flow of fresh resources.
According to the AIBEST Annual Report 2020, outsourcing employed more than 77,950 people at the end of 2019, 67% being in Bulgaria BPO centers.
‘Approximately 80% of the working-age population has secondary or higher education, above the EU average. In 2019, there were 51,460 university and college graduates and Mathematics Informatics Gold Silver Bronze over 18,500 of them could be suitable employees for the sourcing industry.’
oWorkers pays competitive wages to attract qualified candidates for whom working in a BPO is an attractive option as the industry salary is higher than the average in the country and ensures a good standard of living.
Resource Cost for Bulgaria business process outsourcing
Related to resource availability is the issue of cost at which resources become available to Bulgaria BPO providers, and the compensating features of that wage variance.
If resources are more expensive, are they also more able that will create value in delivery and offset some of the training costs?
In addition, one needs to also factor in the cost to acquire and retain that resource. In other words, is a lot of effort required to attract the right talent? Effort will translate to cost, and the greater the effort the greater the cost.
According to the AIBEST Annual Report 2020, in 2019, Bulgaria had the lowest average hourly labour cost across the EU, based on Eurostat data. It stood at EUR 6.0, or more than four times lower than the EU28 average of EUR 27.7.
The gross monthly wage in Bulgaria is Euro 650. With its center located in Plovdiv, oWorkers offers a wage advantage of at least 30% over the capital Sofia.
Telecommunications Network
Telecommunications is the lubricant that has oiled the wheels of the BPO industry and allowed it to expand to the far corners of the world. Bulgaria BPO industry cannot be different.
Even though it is almost a given in today’s context, from a business perspective we still need to tick the boxes and satisfy ourselves that the available infrastructure will meet business needs.
With a well-developed telecommunications infrastructure, with broadband speeds among the fastest in SEE (South Eastern Europe) and the third fastest mobile Internet speed in Europe, oWorkers services are based on this reliable, modern network that connects to the world.
In addition, as the center operates within the overarching EU legislation, our information security and privacy regulations are compliant with Eurozone requirements.
Time Zone in Bulgaria for BPO
Different time zones are followed in different locations around the world. Being in a different time zone could be a bane or a boon depending on the context.
Being in a time zone with a large difference from the client might enable speedier, overnight processing.
On the flip side, requiring staff to work off hours in the BPO center might be a difficult task and also more expensive as ‘off hours’ and ‘overtime pay’ components may kick in.
oWorkers in Bulgaria is on East European Time (EET), which is UTC + 2 and shared with Estonia, Finland, Greece, South Africa, Romania and several others.
It enables daytime coverage of the entire set of clients from anywhere in Europe with an offset of only two hours.
Physical proximity
As owners of a process that is being handled by a provider, it is perfectly acceptable for the client to want to ‘touch and feel’ the processing center and interact with the people doing their work to ensure it is being done the right way and to instil the values and ethos of the brand in the people who are working for it.
Though advances in communication technologies have substantially reduced the need for physical movement, either of people or of artefacts, between the originating and the processing locations, it cannot be said to have been eliminated.
The Bulgaria BPO facility of oWorkers being only a 3 hour flight away from the farthest corners of the European continent will be a comfort for many clients. Lisbon, London and Oslo would perhaps be the farthest which are approximately 3 hours of flying time away.
Moreover, in an increasingly jittery world that needs to react to real or perceived dangers, where occasional stoppage of flights is a possibility, there are multiple options of travel that are available, mainly train and road, as they are essentially different parts of the same continent.
Education and Training; Workforce readiness
There are many facets to being a people-driven industry, not just related to availability of manpower and hiring.
An equally important aspect is the readiness of the workforce to deliver in a BPO environment that may require not only foundation skills like communication, language and handling computer applications, but also function-specific ones like HR and Accounting and even industry-specific like Insurance, Banking and Retail.
Though BPOs have training programs that enable people to deliver on client projects, the larger the gap, the greater the investment required in skilling. Hence, it is desirable that employees come with basic knowledge and skills.
A well-established education system, regarded highly for the quality of students it produces, especially in the mathematics and science areas, provides Bulgaria BPO providers like oWorkers with raw talent of a very high quality which only needs polishing on domain-specific areas to become ready for work. Sofia University even offers a Masters’ program titled “Outsourcing Project and Companies” designed for the industry.
This is a unique academic program that much larger outsourcing destinations have not been able to create and demonstrates Bulgaria’s commitment to the sector.
Bulgaria BPO a Multilingual capability
Proficiency in language holding the key to communication, being multilingual expands the possibilities of communication. In any case, with global footprints of many businesses, the expectation is that a provider will be able to support, regardless of language.
oWorkers is one of the Bulgaria BPO companies that has leveraged the educated and skilled manpower, with its proficiency in languages, where even trilingualism is not uncommon, to offer services in multiple languages.
On an aggregated basis, Bulgaria Business Process Outsourcing companies offer services in English, German, French, Italian, Spanish, Turkish, Dutch, Russian, Swedish, Polish, Portuguese, Romanian, Hungarian, Greek, Arabic, Chinese, Czech, Japanese, Norwegian, Danish, Hebrew, Serbian, Slovak, Croatian, Finnish, Korean, Estonian, Hindi, Bosnian, Catalan, Lithuanian, Macedonian and Slovenian.
Physical infrastructure
Infrastructure required for running a business can be of various kinds. Like power, which is the most time-critical resource for a business to run and required for running any sort of equipment, whether it is a PC, or a fan, or lighting, even most of the telecommunications equipment. Adequacy and continuity of power grid power needs to be ascertained.
Or local transport, required for not only the business to operate but also employees to commute to and from work when working out of a physical facility.
Bulgaria’s electricity prices for industrial consumers, at EUR 0.11 per kWh, the average electricity price, including taxes and levies, are much lower than the EUR 0.15 per kWh for EU-28.
With an efficient distribution system in place, it is one less worry for Bulgaria BPO management as compared to many other centers around the world.
Urban centers like Sofia and Plovdiv, the second largest city where oWorkers facilities are situated, have good transport access accounting for more than 90% of the planned office developments.
Moreover, Plovdiv, features one of the lowest Class A office rents in SEE. Almost all the 535,000 people in Plovdiv live less than 30 minutes away from the city center.
oWorkers and Plovdiv – a winning combination
As a Bulgaria BPO services company, with a management team that has a cumulative experience of over 20 years, with oWorkers you engage a provider that will enable you to get the benefits of working from a center located in the Eurozone, one of the most developed parts of the world, of stable governance, consistent policies, established infrastructure and high levels of education and skill.
The benefits multiply with our choice of Plovdiv, the second largest city as the location for our center with the upside staying consistent but the downside in terms of costs being lower by at least 20%, which get passed on to clients.
Plovdic has 9 universities with more than 30,000 students, a third of whom are pursuing courses in IT & BPO related fields such as Information and Computer technologies, Business Management and Administration, Language Studies and Finance & Accounting.
It also has 29 vocational schools, 37 general high schools and 7 foreign language and math high schools, 78 vocational training centers and 10 applied science institutes and labs.
Easily reachable via road, Plovdiv has its own airport and railway station. The distance to Bulgaria’s main airport in Sofia is 140 km.
With such a supporting environment, it is no surprise that oWorkers is one of 74 sourcing companies located in the Plovdiv District.
