The Whole of Russia Is Available for Outsourcing

Yevgeny Isayev
Chief Executive
Adapt-to-Change Recruitment Company
Avenir Group

U.S. companies outsource production of goods and services to Ireland, British firms outsource to India, and the whole world seems to be outsourcing to wherever price and quality match. But in Russia everybody crowds into the two capitals, Moscow and St. Petersburg. Neither Russian nor foreign-owned firms have ventured to explore in any significant volume what the whole vast country of Russia has to offer in terms of outsourcing opportunities.

Against this background, we at Adapt-to-Change felt like pioneers in assisting our sister firm, Avenir Accounting, in moving its back-office to Tver in a project that we called domestic outsourcing.

By early 2008, Avenir Accounting had decided to do something to counterweight the skyrocketing business costs in Moscow. One of the options that the firm wanted to pursue was domestic outsourcing in Russia. This is where we entered the picture. We started with analyzing the business processes and identifying the aims of the client. We had to understand what functions could be transferred to outsourcing without risking the deterioration of their superior customer service. Next we had to conduct a feasibility study among cities to decide where to relocate the functions. It is important to note that from the very beginning, the idea was to set up a new affiliated branch for the functions and not to hand over the work to a third party. This choice was predetermined by the need to maintain the quality and confidentiality of the work, especially considering that there does not yet exist in Russia a wide base for professional services in this field.

Our feasibility study aimed at identifying the resource potential and overall business friendliness of the targeted cities as well as communication facilities. At the end, our report ranked the city of Tver highest. Tver had everything that was needed and was found to be logistically conveniently connected by direct rail link to both Moscow and St. Petersburg, being only some two hours from Moscow and four hours from St. Petersburg.

The company proceeded quickly, opening the branch by early April 2008 and bringing the office to full operations by June. The experience of recruiting in Tver was very rewarding. Naturally, as we had established in the feasibility study, the cost of labor was approximately one fourth to one fifth of the Moscow price, but what we were especially satisfied with was that we could indeed identify the talented and loyal employees whom we were looking for. Talent and loyalty brings results in the long run and spells immediate customer satisfaction.

As Russia was caught by the international financial tempest, Avenir Accounting was already firmly operating in Tver. It seems that the move was one of the main factors in keeping the firm smoothly running when the economy hit the bump. With a new cost level and new business processes, a superior quality could be guaranteed without a drop in profitability, even when clients in general were looking for cost reductions.

In fact, outsourcing is at least as much about business processes as it is about costs, and personally I think business processes come first. Moving some of the functions to Tver helped Avenir Accounting take the quality of their business processes to a new level; the remote location just demanded it. In a modern consulting business of any reasonable size, direct micromanagement is not possible anyway. When you have your staff in one building, it creates the feeling that everyone is close and that direct personal contact can replace business processes. But this is, of course, a mere illusion. When there are as much as 100 staff in one building, the effect from a process point of view is as if staff were scattered all over the country. But when people are physically located at a distance, then you have to put state-of-the art processes in place for all aspects of the business. Enhanced profitability by remote outsourcing is naturally welcomed, but the long-term results coming from superior business processes are what really guarantee customer satisfaction and lasting success.