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Nearshoring in Europe – Five reasons to outsource to Eastern Europe

The goal of outsourcing is not to find the cheapest contractor, but the one that has the very best price to quality ratio, providing expert services at a reasonable price. In contrast to traditional offshoring locations, Eastern Europe offers higher standards, mainly thanks to better communication and the technical skills of developers.

There is more to outsourcing costs than price

Nonetheless, wages in Eastern European countries are higher than in BRICS countries (though clearly lower than in Western Europe). Then why should you choose for a nearshoring partner in Eastern Europe? To determine the real costs of software development, one also needs to account for the time of delivery (both ideal and real), man-month and a host of other indirect expenditures.

By comparing nearshoring in Europe to traditional offshoring locations you can see why this region has recently seen an increase in foreign investments. Despite the fact that outright prices of nearshoring services in Eastern Europe are clearly higher than in traditional offshoring locations, the quality and timely service is more than making up for the difference in price.

Why nearshoring is more beneficial to your company

Nearshoring to Eastern Europe can give you a lot of advantages when compared to the usual – Asian – suspects of outsourcing. Below we go over some of these benefits:

1. High skilled labour

The former Soviet Union had a strong educational emphasis on engineering and the sciences. As a consequence, many of the countries in this region today have a highly skilled workforce in areas such as computer science, but at much lower labour costs than in Western Europe.

2. Cultural similarities

Some companies believe that Eastern Europe has a distinct advantage over places such as India when it comes to outsourcing because employees tend to take a more collaborative and less process-driven approach to projects.

3. Time zones

Eastern Europe covers a vast region, but most of the countries within it are just a few hours away from Western Europe in terms of time difference, making it easier to communicate within working hours.

4. Data protection

Eastern European countries within the EU could be a good choice for work which requires adherence to the Data Protection Act and the new GDPR legislature.

5. Growing labour market

While skills shortages remain a problem in most western countries, growth in IT outsourcing in Eastern Europe continues to increase. In 2014, the Polish IT industry, for instance, accounted for 6.1% of the total GDP and has shown a steady growth ever since (more than 8.6% annually). The developer population has even risen to a staggering number of 254,188, while other CEE countries such as Ukraine, the Czech Republic and Hungary are also seeing an increase in their IT workforce.

Room for improvement

Smaller geographical distances and less severe cultural barriers are some of the reasons why communication and management in nearshoring is on the whole much easier than in traditional offshoring. However, when you aspire to excellence, there is always some area to improve.

Both parties of such cooperation have to make sure that they understand each other perfectly, even being in the same time zone. Software life cycle, team abilities and specifications have to be cautiously selected and adapted. Across all project stages, providers should not only focus on the contractor’s basic needs, but also apply a multiple-perspective view in order to reach a further level of partner satisfaction.

Luckily, all of those guidelines are typically followed by developers from Eastern European countries as their attitude drives them to strive for perfection. As a result, this region can definitely be recommended for cooperation on sophisticated projects. Each project is usually thoroughly analyzed to make sure that the local language and culture as well as the business background of the project are just as well taken care of as the actual development process. All of it contributes to reducing the risk of outsourcing.

When you delegate some tasks to another company, you have to either fully control them or trust them. It is thus vital to find truly trustworthy and quality business partners. That is why a nearshoring partner is vital in setting up a project. Would you like to know more about our services and approach? Contact us.