The ongoing globalization provides business owners with many opportunities to optimize costs while improving service quality and operational efficiency. In such an environment, software outsourcing is becoming more common. What are the specifics of IT outsourcing in Eastern Europe? Let us explain using numbers and examples.
Why Companies Choose IT Outsourcing
According to the American Psychological Association (APA), multitasking can cause productivity declines of up to 40%. As the company grows and the spheres of its activity increase, delegating the side tasks to third parties – outsourcing – becomes a logical solution.
Companies outsource those tasks, mainly, that require a lot of time, resources, and attention. More often than not, delegation increases productivity and frees the employees to focus on core business areas such as marketing, sales, strategic planning, etc.
Another popular reason why companies are outsourcing is cost reduction. This is especially true for small and medium businesses with limited financial reserves. Hiring dedicated in-house specialists would be notably more expensive.
Specific benefits of software outsourcing:
- Possibility to choose among a large number of qualified developers;
- Quicker design and development process;
- Higher productivity;
- Absence of need to manage employees directly – the hired team most often includes a project manager;
- Absence of need to manage staff learning – all the established IT outsourcing services vendors invest heavily in their employee knowledge and expertise.
According to the CodingSans report for 2019, over 65% of respondents had outsourced specific departments. Most often, accounting (37%), software development (37%), and digital marketing (34%) were outsourced.
Benefits of Software Outsourcing in Eastern Europe
According to research, multinational companies are increasingly outsourcing IT tasks to Eastern European countries and opening dedicated cooperation agencies in Europe. Thanks to this trend, for instance, Kosovo has become one of Europe’s leading IT service outsourcing destinations in the last years.
Some essential services are delegated by leading American companies such as AT&T, IBM, Dell, and Morgan Stanley. At the same time, Microsoft, Samsung, Hewlett-Packard, Oracle, Gameloft, Google, and Cisco have opened R&D centers in Eastern Europe.
How to choose a country for software development outsourcing
What are the reasons for choosing precisely the Eastern European countries? Two main ones are as follows:
- Affordable service cost. While not as cheap as Asian specialists – Chinese and Indian – these are still notably less expensive than experts from the US or the United Kingdom. This does not mean that they are of low quality but by the lower living standards.
- High expertise. Eastern European engineers are often rated among the cream of the crop in many areas of IT.
Recommendations for choosing the specific company:
- Check the developer’s website and social media profiles. Pay attention to whether they worked in your area and what successful cases they can showcase.
- Check out company reviews on sites like GoodFirms, Clutch, or Upwork. In the absence of such, it is better to prefer another software developer.
- Ensure the company contributes to the improvement of technical equipment and IT services (Drupal and others). Do its employees participate in technology events? How do they interact with each other on social networks? This information will allow us to assess the level of specialists, values, and corporate culture of the team.
IT outsourcing in Ukraine
Large IT hubs: Kyiv, Lviv, Kharkiv, and Dnipro.
Today, more than 2,200 Ukrainian companies provide outsourcing software development services. According to Tech Ukraine report, at the end of 2019, there were over 180,000 IT professionals in Ukraine. Moreover, according to SkillValue, Ukraine ranks among ten countries with the most qualified developers year by year.
IT outsourcing in Hungary
Large IT hubs: Debrecen, Miskolc, and Szeged.
The country has over 80,000 qualified IT professionals. Due to the location, Hungarian outsourcers are often employed in German-speaking countries. Note that in Hungary, software development and IT consulting services cost higher than average for other Eastern European countries.
IT outsourcing in Romania
Large IT hubs: Bucharest, Brasov, Timisoara, and Cluj-Napoca.
Romanian IT services are often chosen by French companies. There are over 115,000 IT professionals in Romania now, and Cluj alone hosts 150+ outsourcing companies. Romanian developers work on projects by Hewlett-Packard, Huawei, Oracle, Ericsson, and Microsoft.
IT outsourcing in Poland
Large IT hubs: Warsaw, Krakow, Wroclaw, and Lodz.
Polish specialists are widely employed by English-speaking countries. The average level of English proficiency in Poland (same as in Ukraine) is Advanced. The country’s economy shows a low inflation rate, and special tax incentives are available for outsourcing teams. Poland is ranked among the most innovative countries, according to the Bloomberg Innovation Index 2019.
IT Outsourcing in Bulgaria
Large IT hubs: Sofia, Varna, and Burgas.
Bulgaria is chosen due to its rapidly growing staff and the optimal price-quality ratio. The country’s IT sector consists of 70,000 professionals and more than 230 companies. In 2018, Bulgaria was ranked 61 out of 190 in the World Bank’s ranking of ease of doing business.
Remote Team Management Tools
When starting an outsourcing collaboration with a team, you will need to decide on the tools and services used to maintain the contact. These should cover aspects such as task setting, time management, communication, code management.
- Tasks, and time management. Use Jira, Asana, Trello, or Zoho to manage workflow and distribute duties.
- Slack, Google Hangouts, and Skype are the most popular tools for team communication. Choose a service that supports group and video calls. Establish specific communication channels for separate tasks. This will prevent chaos in correspondence and the loss of essential details about the project workflow.
- Code management. For tracking code changes, we recommend using GitHub, GitLab, or Bitbucket.
In addition to these tools, successful developers employ Agile methodologies for timely releases and coordination, including SCRUM, Kanban, and Extreme Programming.