Central Eastern Europe – software outsourcing haven?

In recent years, the Central and Eastern Europe (CEE) region has been making strides to become a top software development outsourcing destination. Many experts believe that this trend will only continue to gain momentum as nearshoring becomes increasingly prevalent. But what exactly makes the CEE so attractive? Why are businesses flocking to Poland or Romania?

The countries of the Central and Eastern European region have been consistently placing near the top of various rankings such as Tholons[1] or the Kearney’s Global Services Location Index[2]. The so-called nearshoring (outsourcing to neighboring countries) is gaining ground due to the conveniences of proximity. But there must be more to it than just proximity. Let’s take a closer look.

Outsourcing is maturing

Back when software development outsourcing first became popular, it was made possible by the rapid globalization of economy and the proliferation of technologies that made remote cooperation possible and easy. But, let’s face it, it was based on a very primitive premise: outsourcing is a great way to save money. It took many failed projects to come to the realization that low upfront rates do not tell the whole story, and poor communication and quality can negate any savings.

Combine it with the startup and agile revolutions which compelled business to come up with complex solutions and think of their scalability from day one. One can easily understand why low price has been gradually losing its appeal as the main selling point of outsourcing providers, being replaced by the best value for money. And this is precisely where the countries of the Central and Eastern Europe have a lot to say.

Nearshoring – the new offshoring?

In the 2017 edition of its Globalization Country Index, Tholons placed the countries of CEE near the top, with Poland, Russia and Czech Republic ranking 9^th, 11^th and 15^th respectively – in what could be described as one of the major changes when compared to similar rankings from the previous decades. The increasing popularity of CEE countries can be associated with the rise of nearshoring – targeting neighboring countries to meet the requirements of ongoing software development projects.

For businesses from countries that tend to outsource the most of their development work, such as the U.K., Germany, France or the U.S., the CEE region tends to be the closest alternative. It provides the benefits of a close time zone, culture and business environment, which correlate strongly with the overall satisfaction from outsourcing services. As evidenced by the English Proficiency Index, developers from the CEE region also tend to speak English really well compared to those from other destinations – an important communication factor that can make or break complex outsourcing projects.

Central and Eastern Europe & the case for quality

The factors we have mentioned so far can really make outsourced projects proceed more smoothly. But they do not explain why choosing to outsource to Central and Eastern Europe often translates to better quality of the final product.

While there are many possible low-level reasons, CEE developers tend to have a lot of experience. According to the most recent edition of the Stack Overflow Developer Survey, developers in Europe have the highest average amount of prior coding experience at the time they get their first professional job[3] (with Southern Asia occupying the other extreme). People in CEE tend to learn how to code for self-development, and often start at a very young age.

EU – the promised land of tech-savvy customers

Specialized tech fields that handle a lot of sensitive data tend to like EU’s robust security regulations. As a result, CEE countries in the EU (like Poland, Czechia and Slovakia) are becoming even more attractive.

But the appeal of the EU as a market extends much further than just its political and economic stability. Not only is it the second largest economy in the world[4], but also one full of affluent and digital savvy customer. And with the digital single market for Europe agenda[5], the plan is to go even further to ensure that it will remain a go-to place to promote and market innovative products and services. Finding a software house located in the heart of this giant market, one that understands its nature, strengths and limitations, is a great first step to success.

The time is short!

Even though the countries of Central and Eastern Europe are currently attracting foreign businesses, this probably not last forever. As the CEE’s own startup ecosystem and innovative economy grow, there may be a day when its developers have more than enough exciting projects to work on in the home market. With that in mind, it may be wise to start your search now and build strong relationships with local software agencies.

Software Mind is an established Polish software house with the goal to provide top-of-the-line software development outsourcing services. Our policy is quite simple – by hiring top Polish talents and equipping them with all the outsourcing knowhow we have acquired over many years and projects, we can provide the best outsourcing has to offer. If you don’t want to spend a lot of time searching for quality developers and expect smooth cooperation regardless of the distance, contact us today and tell us all about your next exciting project.