Eastern Europe is now rapidly becoming the most attractive location for offshore software development. Software companies in the United States, the United Kingdom, and Western Europe preferred outsourcing development services to India or the Philippines some time ago.
The only benefit that they could get were lower prices while the quality of the services was poor. Outsourcing to Eastern Europe has brought affordable prices, high-quality services, wide talent pools, convenient time zones, and good communication. A.T. Kearney and Tholons consulting companies highly rate the Eastern European countries as preferable outsourcing destinations.
Offshore software development in Eastern Europe: Pros
To summarize the given information about the three major outsourcing destinations, here are the key advantages of outsourcing software development services to Eastern Europe:
Advanced skills at favorable prices. Software engineers in Eastern Europe charge more than developers in India or the Philippines. But their rates are almost two times lower than those in the US. Low rates do not impact the quality of work.
Convenient time zones. You can have a few hours of overlap between a head office in the US with the offshore team in Ukraine. As a result, it may seem that the work is done 24 hours a clock. An average difference in time between the USA and Ukraine, for example, is seven hours.
Large talent pool. Unlike the citizens of other countries, Eastern Europeans are passionate about IT, and gaining a degree in information technology is becoming more and more popular each year. A big number of young people want to stay up to date with the current trends in the world of technology and innovation.
Location and culture. Let’s take Ukraine as an example. Kyiv, Lviv, and Odesa have international airports and it takes a few hours to get from the EU countries and about 8 hours to get to Ukraine from the East Coast of the US. Project management is much easier when you have a chance to communicate with the team face-to-face.
Laws and regulations. There’s a law about Intellectual Protection in Ukraine that protects the copyright for databases and computer programs. It means that no pieces of the code can ever be transferred to third parties, so outsourcing in Eastern Europe is quite secure.
Offshore software development in Eastern Europe: Cons
Like anything else, outsourcing to Eastern Europe poses certain risks, which are as follows:
Obscure taxation. The taxation system in some countries of Eastern Europe may confuse the offshore clients. We recommend checking the business entity to which you issue the payments. If we take Ukraine, we’ll see one of the lowest taxe rates in Europe.
Developers leaving the project. The highly competitive offshore software development market in Eastern Europe and the local software agencies that fail to retain the developers result in losses for the team.
Lack of communication. In many cases, collaboration with a local software development agency may involve communication only via a project manager, so the client has no direct access to the team. The communication plan and means should be discussed in advance so that you know how, when, and how often you will communicate with your team members.
Leaks of sensitive information. It may happen that contracts are signed in a hurry without an NDA. Some developers may include pieces of the code in their GitHub portfolios because they did not know that it was not allowed. All these. nuances should be discussed at the first stage of cooperation with the vendor.
Lack of flexibility. Project objectives may change at any stage of SDLC and it’s not always possible to predict them and change the stack or add more people to the team on time.
Have troubles choosing a software vendor? Here is a comprehensive guide on how to choose a reliable software vendor. It contains many valuable and secret tips gathered by our experts to help our readers like you make the right choice.
Outsourcing to Eastern Europe: Which country to choose?
The outsourcing conditions offered by developers in Eastern Europe may vary from country to country. However, we gathered the most interesting facts about information technology sector in Romania, Poland, and Ukraine.
With the fastest growing economy in the European Union, Poland has quickly reached economic stability, and this growth has also influenced the IT industry in the country. Here are some key facts about Poland:
- The country’s talent pool is more than 140,000 developers working in about 450 offshore companies.
- The skills of Polish software engineers are ranked 4th by TopCoder and 3rd by HackerRank.
- The rates of software developers in Poland start at $50/hour.
- The country’s tech universities have over 15,000 graduates.
Outsourcing East Europe: Ukraine
The country has already demonstrated excellent results in terms of tech innovation and offshore software development. Some successful global startups such as Grammarly or Petcube were established and built in Ukraine. Here are some other interesting facts about the country’s tech industry:
- Ukraine is the “Outsourcing Destination of the Year” as of 2017, according to the Global Sourcing Association (GSA).
- The skills of Ukrainian software developers are ranked 6th by TopCoder and 11th by HackerRank.
- HackerRank has ranked Ukraine as a country with the best software engineers in the security domain.
- The country’s talent pool is nearly 116,000 developers working at over 1,000 tech companies.
- The average cost of software development services in Ukraine is about $37 per hour.
Eastern European outsourcing: Romania
Being a member of the EU since 2007, Romania is now among the top five EU countries with the fastest growth of the economy. Romanian offshore software development companies focus mostly on the fintech industry.
This is because the bank commissions in the country are among the largest in the region, so the fintech startups offer cheaper alternatives. According to Saxo Bank analysis, Romania is a perfect place for the fintech revolution and a good destination to outsource Eastern Europe developers. Other facts about the country’s IT industry are as follows:
- There are over 100,000 software engineers in Romania.
- The skills of Romanian developers are ranked 16th by TopCoder and 20th by HackerRank.
- In 2017, the tech industry in Romania had grown up to $4.2 billion and generated 5% of the GDP.
- Java and PHP are the core technologies that the Romanian software engineers specialize in.
Guaranteed software project success with a free 30-minute strategy session!
Eastern Europe outsourcing: The bottom line
Eastern Europe is now in the process of becoming the most attractive offshore software development location. Countries such as Poland, Ukraine, Romania are highly rated as preferable outsourcing destinations because of the following benefits:
- Advanced skills at favorable prices
- Convenient time zones
- Large talent pool
- Good communication
- Quick hiring and onboarding
- High quality
- Flexibility in cooperation
- Agility in SDLC (software development life cycle)
To prevent all of the above risks, you need to carefully choose the outsourcing vendor and ensure complete transparency of each agreement and transaction between the two companies. DICEUS is named to be the industry leader in 2021 by Clutch. The positive reputation of the company, a big number of reviews, the ease of ordering software development services in Ukraine make it the most attractive destination.
How DICEUS can help you
If you consider outsourcing Eastern Europe, please take a look at what we offer:
These two types of cooperation are the most popular when outsourcing to Eastern Europe. Dedicated team means that you get a team of developers that will fully work on your project from its beginning till the product launch. IT staff augmentation is better for technology companies, startups, software development teams that need additional resources and expertise.
In terms of turnkey software development services, we offer custom development, mobile/web app development, design, system integration, legacy system modernization, and many more.
To get a free consultation on outsourcing IT Eastern Europe and what option is better for your needs, just send us a request. We provide free 30-minute consultations after which you get a clear understanding of how to develop your project step by step. Besides, our experts will consult you on how to use cost-effective engineering solutions, reduce costs and time to market. You will also get a Work Breakdown Structure (WBS) absolutely for free. So, feel free to send your project requirements and we’ll get in touch with you soon.
Guaranteed software project success with a free 30-minute strategy session!