Why do companies outsource?

Deloitte’s 2016 Global Outsourcing Survey figured out that up to 80% of enterprises would like to work with dedicated teams. The main reason is that today’s economy pushes organizations to find new ways to make profits. Companies all over the world outsource IT services to gain access to the innovations and find good business partners.

According to KPMG’s Global Insights Pulse survey, most companies are going to add robotic process automation and data analytics. Now more than ever businesses need someone with right tech tools and experience to stand out from competitors. For example, outsourcing allows not to invest heavily in cloud computing and in-house infrastructure. Almost 40% of international outsourcing services include cloud-based and AI-driven solutions.

Overview of Europe-Based Software Companies

Top outsourcing countries

#1 Ukraine

Ukraine’s pool of IT talents has the biggest number of professionals in Europe: 105,000 web developers. Experts predict that software engineering workforce is will be more than 200,000 in 2020. The country has over 1000 software development companies and a lot of education facilities/courses to prepare new specialists. IT market in Ukraine has increased by 150% between 2011-2015 and there is a prediction that by 2020 it will grow to $5.7 billion.

Ukraine Outsourcing Rates

These are the average prices of IT professionals per month. Keep in mind that junior programmers have 0-2 years of experience, middle: 2-5, senior developers: 5+. The rates may be different and depend on company’s experience.

Nowadays, many companies fight for the best IT specialists. So, you can pay more in order to motivate software development companies in Europe to choose you.

JAVA DEVELOPERS

  • Junior: $600-$900
  • Middle: $1,470-$2,000
  • Senior: $2800-$3,500

C#/.NET DEVELOPERS

  • Junior: $500-$800
  • Middle: $1,600-$2,000
  • Senior: $2,800-$3,200

RUBY/RAILS

  • Junior: $400-$900
  • Middle: $1,400-$2,000
  • Senior: $3,500

PHP DEVELOPERS

  • Junior: $200-$500
  • Middle: $1,300-$1,800
  • Senior: $2,500-$3,000

PYTHON

  • Junior: $700-$800
  • Middle: $1,500-$2,200
  • Senior: $3,000

#2 Poland

According to Harvard Business Review, Krakow had the leading position in IT sector but now it holds the second place after Kyiv. Because Krakow doesn’t have enough IT professionals to satisfy global companies’ demands.

IT and R&D professionals receive the highest salary, according to the same ABSL report. For instance, a middle software developer may get 1860 EUR per month, while a middle QA engineer can earn 1700 EUR. Also, you can read more about Polish IT salaries here: 

IT Outsourcing Poland: Salaries and Market Overview.

Poland outsourcing has been increased in the past 20 years at the yearly growth of 20%. Moreover, the Business Services Sector has become an accelerator for Poland’s economy. Poland ranks 24th globally in terms of simplicity of doing business in the World Bank Group report. The country has up to 45% investment market share, sustaining its leading position in the CEE region. Two years ago, the total investment scope amounted to 4.6 billion EUR.

 

#3 Romania

Romania IT outsourcing is more expensive than Poland outsourcing and has much higher prices than Ukraine outsourcing rates. But their open-minded and flexible IT professionals may also fulfill your staff gaps.

Romania IT outsourcing overall is able to provide up to 12% of GPD in the near future, comparing to its current 6%. According to the fresh Employers’ Association of the Software and Services Industry report on Software, up to 80% of the industry is currently managed by foreign investors, which makes Romania a reliable country for the IT services.

Eastern Europe countries are a quite promising area for the IT offshoring. Because of the opportunity to skip or decrease tax rates, companies all over the world get highly innovative and quality IT services that are cost-effective at the same time. Most of the Eastern European developers speak fluently English and can easily meet your business needs. Our outsourcing statistics by country will help you to pick a state for the successful cooperation.

Major outsourcing buyer regions

How to Win the Best Results from Outsourcing Companies in Europe

Eastern European developers have enough skills to add value to your organization and free up your workforce. If you have never worked with Europe-based software companies, use these guidelines to reach needed results and eliminate all possible mistakes.

1. Clear purposes.

Give as many details as you can to specify your expectations. It is important to document your requirements to exclude misunderstandings.

Stan J. Lepeak, global research director at KPMG, says that if a company is willing to launch outsourcing cooperation, it has to create a clear vision for the developers what to do and when. This is company’s responsibility to ensure that remote team has the governance in place to meet your requirements. Set tasks with specific purposes in mind, and give enough information to implement your ideas into life.

2. Reactive vs. proactive position.

True partnerships require a lot of efforts and permanent evaluations, feedback. You need to proactively give the comments after each sprint to achieve understanding and better outcomes.

3. Get to know the provider’s innovation strategy.

Bear in mind that your key purpose is staying ahead of your competitors. And how to achieve that? Fostering innovation, winning approaches and good strategy will bring you success. For instance, discuss automation in order to decrease costs and speed up the process.

Tarsh, an award-winning strategic communications consultant, advises instead of allowing the provider to blindly work against its own interest, boost innovations. It will bring mutual benefit for both sides and help to build smart process. Don’t waste your money on the unwanted actions: be open for the new approaches and IT solutions.

Outsourcing companies in Europe perfectly know what it takes to create such innovative process. So, make clear for your partner that you’re ready for the innovations.

4. Make sure that remote team has a sound recruitment strategy and talent acquisition.

The right employees will make all the difference. So, ensure that your outsourcing provider pays a lot of attention to the recruitment issues and retention of the staff. You can spend extra financial resources to support their talent acquisition strategy and make employees engaged. For example, it can be medical insurance, free gym and company’s restaurant to make people want to stay with you. Such extra bonuses will work for the software development companies in Europe and make your collaboration great.

TELUS International, a BPO provider, uses special motivational programs for their contact centers around the world. They help dedicated team members in the Philippines get online Bachelor’s degree. It helps to improve performance, employee engagement, and loyalty. Also, this is a good PR strategy to make people know about your brand.

5. Don’t forget about training.

Deloitte reports found that more than 20 percent of outsourcing companies rely on wrong resources. That’s why you need to create clear standards for your training practices. Such training will be a confirmation of needed skill sets.

Describe them in the agreement and provide documentation of standard operations to ensure transparent communication. It can be a ‘train the trainer’ strategy in which team lead comes to the onshore locations to improve his or her level. Feel free to use online training as well for IT companies from Eastern Europe countries. Also, they may choose by themselves appropriate kind of learning.

6. Compliance.

Researchers found that 25% of organizations that are engaged in outsourcing cooperation have a lack of management skills. Gain “trust but verify” approach to improve your current relationship management. It is important to ensure that the provider has a needed degree of operational integrity. Identify whether they’re ready to meet globally recognized standards. Your service provider needs to comply with global documentation requirements to eliminate possible risks.

7. Work on change management.

Companies have to focus on their change management to prepare themselves for the outsourcing. New kind of cooperation will influence your whole business and you need to make ready for the changes. By using a detailed change management approach, you will decrease disruption. The best thing to do is to hire someone in-house to be responsible for the outsourcing partnership.

Final checklist:

  • Work on vendor management opportunities, transition, and governance to ensure mutually beneficial process.
  • Build simple relationship management and flexibility of all processes.
  • Create the best conditions for meaningful cooperation at the beginning of the work.

So, make your company innovative and hire dedicated software teams. This is great opportunity to use their skills and knowledge without disruption of your business processes. Moreover, Eastern Europe has enough IT specialists for the global needs. Explore our outsourcing statistics by country and try such smart collaboration.