Eastern Europe has established itself as one of the world’s top outsourcing markets with respect to quality to price ratio. Hungarian, Bulgarian, Polish, Ukrainian and Romanian developers are taking the lead in IT outsourcing. Today, the region has 4 of the top 20 countries listed on 2016 A.T. Kearney Global Services Location Index. Hence, you don’t need to go far looking for a software development partner. The developing countries in Europe can meet all the requirements of businesses that want to outsource IT services.
The choice of the provider usually depends on many factors such as the services quality, talent availability, local IT market development, the business ecosystem, the development cost, etc. In this article, we are trying to establish strengths and weaknesses of the leading IT outsourcing destinations in Eastern Europe – Romania and Ukraine. So let’s find out what makes Ukrainian and Romanian developers so attractive to European and American clients.
Hard Skills of Ukrainian and Romanian Developers
Although the developing countries of Eastern Europe have a lower standard of living than countries in Western Europe and North America, they are widely known as the origin of the world’s best chess players, mathematicians and engineers, including software developers.
For Romania and Ukraine, industrialization of the second half of the 20th century resulted in the boom of technical education. Many decades have passed since then but the educational tradition with the curriculum based on the idea of educating students for the technical superiority is still strong. Thus the educational background preconditions Ukrainian and Romanian developers’ ability to deliver competitive software solutions.
Mutual understanding with an outsourcing partner may also be a concern when choosing a country where you could outsource your digital project development. Both Romania and Ukraine have close cultural affinity to the West. This quality doesn’t depend on acquired knowledge but is desirable for a beneficial partnership you’d like to have with your nearshore team.
Among the soft skills of Ukrainian and Romanian IT professionals are common sense, positive and flexible attitude, high responsibility and a good sense of teamwork. Ukrainian developers are experienced in communicating with foreign clients, mostly from the US, the UK, and Western Europe. Many of them have the international education or working experience abroad. Together with general emotional intelligence, it makes a great combination to deliver software products.
Strong communication skills along with the knowledge of English are a big plus of Romanian and Ukrainian developers. Romania scores 58.14 in the EF English Proficiency Index 2016. That means it is a country with high English proficiency. Comparing to other countries of the region, a lot of students also learn French. That makes Romanian IT developers attractive for French firms.
Ukraine is a country with moderate English proficiency. However, in the IT sector, the situation is better. According to DOU.ua, the number of IT professionals with fluent English skills is 40.2%, and of those with intermediate level is 38.6%. The competition among professionals in the sphere is high and English is a must to be hired by any company.
Ukrainian and Romanian IT Market Development
Eastern European IT sector has seen continuous growth over the last decade, despite political issues and the economic crisis. Many global companies have their offices in Eastern Europe. Founded in 1996, Microsoft Romania runs two global business support centers in Bucharest and Timișoara. Oracle also has several offices in Romania with more than 3,000 employees. Hewlett-Packard, Huawei, Ericsson, Gameloft and other global companies also have divisions in Romania. Romanian IT business has expanded by attracting important investors after Romania joined the EU in 2007. Romania has over 95,000 IT professionals and 15% annual growth rate.
In 2015, 80% of Ukrainian IT services were imported by the United States, and the total value of development outsourcing export reached $2.5 billion. The country is also gaining in importance as a development center on the global IT market. Such international giants as Samsung, Ericsson, Boeing, Oracle, Siemens, Wargaming, UpWork, Google, Cisco and over 100 other global companies of different industries, including gaming, telecommunications, software and e-commerce have chosen Ukraine as a location for their R&D centers and offices.
It comes as no surprise that Ukraine offers a wide choice of providers from over 1,000 companies with more than 100,000 professionals and 20% growth rate. What’s more, this figure is expected to double by 2020. The thing is that a monthly salary of a Ukrainian developer is 5-10 times higher than that of an average employee engaged in any other sphere. So IT becomes more and more popular among young people. Also, the IT job market competition keeps the qualification standards at the high level, motivating employees to learn for professional reasons.
Usually, cost saving is the main motivation for outsourcing. Thus Eastern Europe with its competitive prices and a stimulating business environment is one of the most attractive IT markets for technology investment and outsourcing.
Moderate prices make outsourcing to Ukraine much more affordable than to Romania and to other European countries. The thing is that global financial crisis and recent political hardship has hit Ukraine and led to inflation. Being a member of the EU, Romania has much higher cost and standard of living. Therefore, the rates for IT services in Romania are much higher than in Ukraine. So if we take the salaries of the whole team needed for the project, there will be a significant difference. Considering the cost of the whole project, especially if it’s a long-lasting one, your savings from outsourcing to Ukraine can bring a lot of value to your business.
Both countries do everything to maintain IT sector growth rate. They try to attract investors by developing and assuring an increasing level of quality and security. Romanian national government supports IT industry development by exempting software developers from the 16% income tax.
Ukraine has significantly improved its international business venue rankings status. The taxes for IT-related businesses have remained rather low. Driven by the idea of joining the European Union, Ukraine implements economic reforms and encourages investments in the IT market and its growth.
Offshoring your software product development to a distant country may not always be the best bet. Therefore, you may be interested in nearshoring. Romania and Ukraine lie at the frontiers of Central Europe bordering each other. The two countries have well-developed international transportation infrastructures, so regular business trips wouldn’t be a problem if you decided to outsource to one of them. If you opt for a flight, both Bucharest and Kyiv can be reached within 2-3 hours from most European countries. Ukraine and Romania use Eastern European Time – UTC+2. So, you will be able to communicate with the team members at the most convenient time for both sides.
Many American and European companies choose Eastern European outsourcing firms as partners for augmentation of their onsite IT departments. The reasons are numerous and include fair pricing and fair play as well as employees’ extensive experience and qualifications. As the demand increases, the talent pool grows and engineers become more skilled giving better value for money. Providing services of the high quality, and thus of high demand, Ukrainian and Romanian developers are successfully using a chance to show the global IT community what they are capable of.