Industry trends and sectors - Kanda Consulting Ltd.

Corporate investments

The World Bank Group launched its global shared service centre in Sofia in July 2019. It is planned to employ 300 IT, HR and financial specialists by 2024.
The BPO vendor Sutherland Global Services Bulgaria EOOD opened a new office in Plovdiv in October 2019, where it planned to create 300 new jobs.
In October 2019, the Bulgarian branch of Belgium-based KBC Group NV opened its shared service centre in Varna,which will provide recruitment, IT and risk and project management services to the other entities in the group. It will employ 300 persons and will start operations by the end of 2019.
In September 2019, the software company Scale Focus AD launched its own IT academy in Burgas in partnership with the other IT companies operating in the city. It plans to expand to other municipalities and aims to train 10,000 IT specialists in Bulgaria.
The ITO provider Immedis EOOD announced in June 2019, its plans to expand its headcount with 200 new employees in Varna by the end of 2020.
In June 2019, the European Commission launched a new investment mechanism for support of digital start-ups in Central and Eastern Europe - the Digital Innovation and Scale-up Initiative (DISC). Its focus is on the scale-up of innovative companies in the region, which could benefit above all the ITO sector in Bulgaria.
The VBPO provider Tek Experts EOOD plans to expand with more than 400 new employees by the end of 2019.
The KPO provider Experian Bulgaria EAD invested USD 5.0 mln in its new office in Sofia in the building Space Tower launched in May 2019.
The ITO company Modis Bulgaria EOOD opened a second office in Plovdiv and announced its plans to create over 400 new jobs in 2019.
Kaufland Service EOOD opened its second IT HUB in Sofia in connection with the planned expansion of the activity, which should double the company’s headcount with 100 new employees by 2020.
In January 2019, Facebook announced that it would hire 150 employees in Sofia in partnership with the VBPO provider Callpoint New Europe AD (Telus International Europe).
DXC Technology Bulgaria EOOD announced that it has hired 600 new employees in 2019 and plans to expand its group headcount to 7,000 in the next four years.
The global business news provider Financial Times opened an office in Sofia in partnership with Xoomworks Bulgaria EOOD. By the end of 2019, its FT Core unit plans to employ 130 specialists responsible for engineering, development, design and economic analysis.
In October 2018, Japanese game developer Sega Games Co. Ltd. announced its plans to establish a new unit in Sofia under the name SEGA Development Services Sofia by June 2020.
In 2018, the German retail chain Lidl launched an IT research and development unit, Lidl Digital, in Sofia,

FORECAST

The global sourcing industry will accelerate its growth in the next five years. All segments will also grow faster than in the period up to 2018, being led by the SSC, which will double its size within the analysed period. BPO will become the smallest segment in size, but it will still grow at a higher rate than ITO. The latest major trend in Bulgaria’s sourcing industry is the rapid entry and expansion of shared service centres of global technology companies and financial institutions, such as the World Bank Group, Facebook and the Financial Times, to name only a few. This is a sign of the improved image of the country as a destination where high value-added services are provided by skilled talent and is a prerequisite for further development of this segment.

SSC are starting to evaluate their success not only through cost savings but by measuring the benefits of improved process control, risk reduction, better compliance, quality and sustainability. Furthermore, the excellence in customer service is becoming a factor of a significantly growing importance. quality customer service can put an SSC ahead of competition in an already crowded market. Such a trend is bringing the need for SSC to retain experienced and skilled talent to the fore. SSC’s operations are thus focused more on streamlining processes, and improving agility and quality of service than ever before.The SSC’s operations are shifting from traditional manual and human-based work to more knowledge-based activities. Automation technologies are the main factor fuelling this transformation, enabling SSC to improve productivity, innovation, as well as service agility and quality. Automationalso facilitated the development of new competencies among SSC thus refuting the prediction for job-losses and put the sector on a path of consistent growth.The positive effect of the expansion of the ITO and BPO sectors outside Sofia was most evident in Plovdiv in the five-year period under consideration. In 2018, Varna turned into the most promising and dynamically growing sourcing location, although the vast majority of the new hires were again in the capital. Average salaries in the industry in these three cities exceed more than two times the average in the economy. There are positive signs in smaller cities, such as Veliko Tarnovo and Stara Zagora, where new ITO and BPO jobs are growing but salaries are only barely above the economy’s average in those cities.The main challenge for the sourcing industry will continued to be the saturation of the labour market in terms of skilled workforce. The emergence of numerous professions that did not exist in the past or were practiced by professionals with a wide specialization necessitate tuning the education sector in order to meet the constantly evolving requirements of the sourcing and technology sector.