Derived from the business term “offshoring” (outsourcing to far away locations like India), nearshoring or nearshore outsourcing can be defined as the transfer of IT and business processes to software companies operating in countries nearby. Nearshoring is a growing trend among companies that seek to cut costs, but don’t want to deal with the cultural, language and time zone differences involved in offshoring.
The problem with India
Western businesses are starting to prefer Eastern Europe over India as an IT outsourcing destination. And for good reasons. On the one hand, India has lost some of its appeal. For instance, the workforce there is becoming more expensive. And then there are the old drawbacks of outsourcing offshore - big timezone differences, long physical distances, and in some cases hard to overcome cultural gaps.
On the other hand, many Eastern European countries, including Romania, are an excellent alternative when it comes to technical skills and experience and they have the advantage of being lower-priced than most Western European countries - granted not as cheap as India. However, Romania et al are much closer to Western countries, allowing for quick travel and easier real time collaboration. Moreover, people there speak very good English and share a common European culture.
The 7 reasons for nearshoring to Romania
“Romania has a total workforce of 9.35 million with an estimated 64,000 IT specialists, placing it sixth in the world for its number of certified IT specialists.” reads in a Computer Weekly article from 2013. The sheer number of them is a clear indication of this sector’s development in Romania. However, quantitative figures are far from painting the real image, there are other advantages to picking a Romanian nearshore software development company. Here are the 7 most important ones:
1. Great talent pool
The level of IT skills and experience found in Romanian software companies matches the level found in the West. As all former communist bloc countries, Romania has had and continues to have an educational system focused on engineering and exact sciences. Cities like Bucharest, Timisoara, Cluj-Napoca, Brasov, Iasi and Oradea are renown for their universities and the vibrand IT hubs that developed there.
So, when nearshoring to Romania, Western companies can rest assured their projects, no matter how complex, will be completed with the highest level of professionalism.
2. Geographic position
The distance separating Romania and the Western Europe is relatively small - a mere two and a half hours’ flight from London, and even less from Eindhoven. But the biggest advantage is the small difference in time zones. Most Central and Western European countries are but at an hour distance in terms of time zones. The only countries separated by a two-hour difference are the UK, Portugal and Iceland, but that’s quite manageable - think of the 4:30 hours’ difference between the UK and India…
Bottom line, by hiring a nearshore software development company from Romania, a Western client will be able to collaborate in real time, have Skype meetings and even participate in SCRUM sessions - all during office hours!
3. Cultural similarities
Romania’s culture is much closer to that of Western Europe and USA than any Asian country’s culture. “It is in this area that we think Romania scores most highly. From personal experience we have found Romania service providers often combine high levels of technical proficiency in leading-edge technologies with soft skills - communication, languages, flexibility, that are superior to that typically found in other outsourcing locations.” says the author of the aforementioned article.
This means that when working with Romanians, there will be less communication barriers and less communication friction. This is especially important when the project involves a close relationship between the client and the bespoke team working nearshore. But more importantly, Romanians are not yes men, and will not hesitate to debate with a client on technical solutions. Which brings us to the next point…
This is maybe the greatest asset Romanians, and Eastern Europeans in general, have. As Sean put it “They take a more collaborative and less process-driven approach to projects, take ownership of deliverables with a high level of commitment to outcomes and the overall relationship with the client.” Romanians are delighted to act as consultants in order to find the right software solution and will be more than happy to assist the client in writing the technical specifications.
This is huge! This means that by hiring a Romanian IT company, you won’t get just a platoon of IT people waiting for your orders, but instead an autonomous team that will proactively act as a department in your company.
5. Excellent language skills
Romanians have impressive language skills. 75% of the people under 40 living in Bucharest speak English as a second language, but the statistic can be easily extended to all urban areas in Romania. But more importantly, those who speak it, speak it clean, without thick accents that hinder comprehension. This is probably due to their appetite for Western art and media, from un-dubbed American and British movies to English language websites and TV channels.
Romanian people are family oriented. They tend to take root in the place they live, and for professional workers, there’s rarely an imperative to seek economic migration. In fact, IT jobs are among the best paid in Romania.
But there’s another dimension to stability - Romania is an EU member, which means not only that it’s safe to visit it (Western executives along with Prince Charles just love it here), but also that its laws are aligned with those of the other EU members. Take for instance the Data Protection Act to which Romania adhered when it joined the European Union - the directive regulates the processing of personal data. This can be crucial if the client needs to develop a Business Intelligence solution that uses personal information from its clients database for instance.
7. Great value to cost ratio
Quality VS quantity, value VS price. As we said earlier in the article, Romanian IT workforce is quite reasonably priced, but not as cheap as India’s. But as the saying goes, you get what you pay for. Companies that nearshore to Romania get Western quality services at a fraction of what they cost in the West. And if one factors in the considerably less management hours needed to coordinate, control and analyse the nearshore team’s work, Romania becomes really attractive.
As a conclusion, Romania, as well as a few other Eastern European countries, is growing in popularity as a nearshoring location for Western European enterprises, just like Mexico and Canada are growing in popularity for US companies. Its advantages are the ones listed above: superior talent pool, easier communication, fair fees and geographic proximity.
Qubiz has been the technological partner of choice for many Western European companies big and small and continues to deliver cutting-edge IT solutions for businesses that evolve and innovate. Qubiz can act as your one-stop-shop by providing you with services that cover the whole application lifecycle, including functional design and consulting, software architecture design, UX/UI design, software development, QA, and finally maintenance.
Oh, and they have fun working with us.