Tag: Tier 2

India’s Biggest Ride-Hailing Service is Driving into the UK | In the News

Indian ride-hailing startup Ola is driving into new countries like there’s no tomorrow.

Today (Aug. 07), the Bengaluru-based company announced it plans to launch in the UK. This comes just six months after the Softbank-backed firm ventured into Australia in its maiden overseas move.

“In India, they’ve mostly focused on metros and tier I cities. In tier II, I don’t know how much demand there is… So, they’re targeting developed markets like Australia and now the UK,” said Yugal Joshi, vice-president at research firm Everest Group. “In these markets, revenue per ride should be higher. Typically, you spend $20 to $30 (Rs1,400 to Rs2,000), which is way higher than what you’re spending (in India). The fuel cost also is cheaper there compared to India.”

Read more in Quartz India

Why Tier-2 and 3 Cities in Poland Should be on your Global Services Radar Screen | Sherpas in Blue Shirts

In the past several years, Poland has become the most prominent global services delivery destination in the European region. But, unlike other countries in which the lion’s share of digital services activity is in tier-1 cities – think India and the Philippines – Poland’s tier-2 and 3 cities have outpaced activity in its tier-1 cities since 2008.

Why? Everest Group research identified two key reasons:

  1. Increasing activity in tier-1 Polish cities, e.g., Krakow and Warsaw, has created intense competition for talent, driving higher attrition/turnover, longer hiring cycles, increased premiums for niche skills and seniority, and faster wage inflation
  2. Increasing maturity of tier-2/3 cities over the past five years has established a critical mass for global services delivery in these cities, leading to a higher degree of comfort in talent capabilities and the ease of scaling up operations in these cities.

Other factors, including less competition for talent, lower salaries and infrastructure costs, better quality of life, stronger government support, and the opportunity to leverage untapped talent pools, have also contributed to tier-2/3 Polish cities’ rise above tier-1 cities in the country.

To understand the full story, Everest Group evaluated multiple aspects of the tier-2 and 3 cities, including relative delivery scale/size, work complexity, extent of digital services delivery, and typical source markets supported.

Here are some of our findings.

Shift in nature of leverage

Historically, tier-2 Polish cities, such as Katowice, Łódź, Poznań, and Tri-city, and those in tier-3, including Bydgoszcz, Opole, Rzeszów, and Szczecin, were leveraged as small spokes to tier-1 city hubs. They were largely meant to accommodate “spill-over” growth, or to host more transactional work. But this is changing rapidly, as more companies, both in captive and outsourced arrangements, are establishing their delivery hubs in these cities.

Largely single functions to multi-functional delivery

While both Global In-house Centers (GICs) and service providers had previously been leveraging the tier 2- and 3 cities largely for IT services delivery, their increased confidence in the breadth of talent has prompted establishment of large, multi-functional centers in these locations.

Digital services CoEs

Most importantly, while where tier-1 cities in other delivery destinations like India and the Philippines account for more than 70 percent of all digital delivery centers, Poland’s tier-2/3 cities are brimming with digital services activity.

Tier 2-3 cities

Of course, any company’s selection of a tier-2 or 3 location in any country depends on its appetite for benefits versus trade-offs, including high cost savings versus low scalability, and early mover advantage versus relatively lower maturity. But Poland’s smaller cities certainly have a compelling digital services delivery proposition.

For a more detailed analysis of the value proposition of Polish tier-2/3 cities, and relative comparisons of these locations with tier-1 cities, please see our recently published report, “Poland Tier-2/3 Cities: Complementing Tier-1 Cities or Carving a Niche for Digital Services?

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.
This field is for validation purposes and should be left unchanged.