Software outsourcing to Romania.

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Software outsourcing to Romania.

Avangarde Software

According to [1], there are a number of reasons to outsource your software development projects to Romania, of which we mention the full range of outsourcing services offered, the high number of university graduates each year, of which about 25% with engineering degrees, the international accessibility, the lowest costs for data transfers and Internet access in the European Union (EU), Romania’s having the maximum speed of internet connectivity in the EU, the European culture, the high proportion of students that speak English and the competitive rates for outsourcing services, higher than those in only one country in the EU.

The research shows that the number of university graduates in engineering exceeded 150,000 in 2014 and kept growing since then, while the percent of students that speak English was 90%. The fact that the country has 4 airports and over 130 direct flights to 76 destinations throughout the world, most of them major cities , is also greatly appreciated by foreign customers. To complete the picture we must add to it the well prepared 7,000+ students who graduate with IT&C degrees each year [3].

 

The evolution of software outsourcing firms in Romania

According to [1], Romanian companies have significantly improved their outsourcing processes, evolving from cost to value driven. This leap was made possible mainly by the local talent pool, which enables Romanian providers of software outsourcing services to carry out tasks of the highest complexity.
Becoming a member of European Union on January 1st, 2007 has been helping Romania’s economy greatly by opening the borders, eliminating visa requirements and thus making travel anywhere in the EU easy. Its current population of 19.5 million make Romania the seventh largest EU member state, while the country’s rapidly developing IT industry rapidly transformed the Romania in a prime candidate for software outsourcing.

Ideally placed in the middle of Eastern Europe, Romania quickly captured the interest of companies looking for a well prepared technical work-force and a stable and cost-effective business environment at an easily reachable location.

 

Romania in the outsourcing rankings

Using a complex model that factors in for each outsourcing destination the conditions, the risks and the costs, [2] calculated a weighted location index for business process outsourcing(BPO) and shared services. While this index has not been specifically calculated for software outsourcing, it provides objective evidence on the attractiveness of certain outsourcing locations. In the 2015 ranking, Romania’s overall index is 4, while Vietnam comes first, the Phillipines second and Bulgaria the third. On the cost dimension Romania slid 11 places to the 12th position from 2014, when it topped the list. The country’s score on conditions in 2015 was 5, while for risk 10. Surprisingly, India took only the 20th spot, with 32 for conditions, 31 for risk and 13 for prices.

As the index suggests, conditions in Romania are among the best you may find and the risks among the lowest. The country’s infrastructure has been improving rapidly, with plenty of class A office buildings being added to the real estate landscape in Bucharest, Cluj-Napoca, Iasi, Timisoara, Oradea and other cities. The Internet connections are among the best in Europe, while the number of direct flights connecting our airports with major cities abroad has been increasing spectacularly in the last years.

Ranked 1st in Europe and 6th in the world on the number of certified IT specialists, Romania has over 75,000 employees in the IT sector and is expected to reach 150,000 by 2020.

 

Brilliant software engineers

Romanian software developers earn accolades throughout the world for their excellent theoretical prowess, creativity, programming skills, diligence and direct manner of speaking. Furthermore, the linguistic abilities of these specialists surpass those of their counterparts in other Eastern European countries and India, making them prime targets for IT recruiters in Western Europe. Cities like London have been taken by storm by Romanian engineers, who are considered the most skilled and creative by the IT community.

Well known brands like Amazon, Microsoft and Siemens have been tapping in this gold mine of brilliant minds by opening offices in Romania and attracting the best Romanian coders. Darren Overby, an American entrepreneur, discovered Romania’s huge human potential after posting a project on vworker.com. His amazment with the engineers in Cluj-Napoca he hired is clearly reflected in this excerpt from one of his blog posts accurately illustrates his opinion: “The following day I was truly amazed at how quickly they got to work. It’s the first time I’ve ever witnessed programming in parallel. Everyone immediately checked out the framework and initial code base from the SVN server and got to work. Within the course of 12 days, we rebuilt the hostel front desk system and got everything mostly done.”

 

Where in Romania should I outsource my software development?

The biggest academic centers in Romania vie for the top spot in the ranking of destinations’ for software outsourcing in Romania. They include Bucharest, the country’s capital, Cluj-Napoca, the second largest academic center, Iasi and Timisoara. Smaller cities like Oradea, Brasov, Targu-Mures and Craiova are also strong contenders, but with much smaller pools of IT specialists.

Of the factors you should take into account when choosing the city in Romania where to outsource your software projects, the ones to focus most on are the number of IT graduates from that particular market, the infrastructure, the presence of an airport and the availability of office space.

According to [4], Bucharest had around 2000 IT&C graduates in 2014, Cluj-Napoca 1700, Timisoara 1100, Iasi 800, Brasov and Sibiu had 500 each and Craiova 470. The proportions have not been changed since then. Please bear in mind that Bucharest and Timisoara also attracted many big corporations like Microsoft, Oracle, IBM, Dell, Adobe, Alcatel-Lucent and Amazon, while local IT companies from Cluj-Napoca and Iasi enjoy a slightly lower competition from big foreign players. Acces by plain to Bucharest, Cluj, Timisoara and Iasi is quite easy, Targu Mures can be reached by air from the previously mentioned cities, while Brasov is expected to open its first airport in 2017. Oradea doesn’t have an airport, but is only a 3 hour drive from Cluj-Napoca.

When it comes to office space, of the main contenders Cluj-Napoca is in the best position, with a vacancy rate of 30%, followed by Iasi with 15% and Timisoara with 5% [1]. No statistics are provided for Bucharest and the other cities mentioned in this article. Despite the differences in vacancy rates, rental prices were between 12 and 14 EUR per square meter in all the three cities.

 

Main reasons to do software outsourcing in Romania

To sum it all up, there are nine ten reasons for which you should consider outsourcing your software development to Romania.

1. Strong technical expertise

The Romanian software engineers master both mainstream technologies like .NET, Java, PHP, C, C++, iOS, Android, html5 and niche technologies such as Python, Ruby on Rails, Adobe Experience, Perl or Cobol. They have also been exposed to various software development methodologies, of which Agile SCRUM emerged as the most effective for the vast majority of projects. Romanian software developers and testers gained the respect of the IT community for their technical prowess, creativity and resourcefulness, a combination that encouraged foreign companies to outsource more and more complex, highly-transactional software development projects.

2. Availability of large pools of IT talent

The affinity for programming of Romania’s young generation is strongly cultivated in school. With the focus on mathematics and sciences in school at all levels started in communism maintained to a large degree after the fall of the Iron curtain, it is no wonder that so many of our youth become amazing software engineers. With over 6000 IT&C engineers and computer science graduates each year and more than 41 Technical Universities located mainly in the main university centers of Bucharest, Cluj-Napoca, Iasi, Timisoara and Brasov, Romania offers plenty of choices for software outsourcing.

3. Cultural and lifestyle match

Any visitor from Western Europe or North America will feel like home in Romania, where people embraced the values of the West without a blink after the fall of communism. Proximity to and a common past with Western Europe made the transition from communism to capitalism smooth and natural. Everything from our culture to the lifestyle and infrastructure remind of Western Europe. You will find in Romania many cosmopolitan and refined people, of whom a large proportion are fluent in English and educated or with work experience in other European countries. This exposure to diverse countries and work environments helped most of our IT specialists acquire good intercultural and communication skills and collaborate successfully in distributed teams.

4. Communication

Romanian software developers and testers are fluent in English and have better pronunciation that their counterparts in other Eastern European countries or in India. German is becoming the second most popular foreign language among Romanian IT specialists, who realized that mastering it can boost their careers. Being aware that effective communication means far more than fluency in foreign languages, many Romanian IT companies rely on ongoing training programs to build strong communication skills for their engineers. The improvements in these skills led to high success rates for collaborative projects.

5. Convenient location

You can reach Romania in 1 to 3 hours from anywhere in Western Europe. Cities like Munich, London or Frankfurt are linked with direct flight to Bucharest, Cluj-Napoca, Timisoara and Iasi. Not needing visas for travel within Europe is another important advantage of Romania’s location.

6. Overlap of business hours

Romania’s time zone is convenient not only for customer in Western Europe, but also for those on the East Coast of North America, with whom we have an overlap of 2 hours, depending on the business hours of the company. Romanians are open to start their program at 10 or even 11 a.m. if customers need more hours of overlap or are situatead on a remote time zone like the on on the West Coast of North American or of Australia. flexible time zones.

7. Good infrastructure

The strong IT infrastructure is mentioned in most researches on outsourcing destinations. The number of class A office buildings is increasing rapidly, as the current situation in Cluj-Napoca suggests. In this city there is an over-supply of such buildings and the pace with which new office spaces are added to the real estate landscape does not seem to slow down. You will also find in Romania some of the best Internet services in Europe, with broadband already present in a large proportion of the households.

8. Advanced processes

Two decades of outsourcing experience gave Romanian companies the time to develop strong processes and to make all the necessary adjustments to meet the most important legal and technical requirements of their customers. Most of the software houses established in the late 1990s and early 2000s have the right processes in place for protecting customers’ intellectual property and delivering top quality services on time and within budget.

9. Flexibility

The initial lack of experience determined Romanian providers of software outsourcing services to adopt the processes and methodologies proposed by their customers. As this approach was quite appreciated by the customers, it was kept even after the providers developed their own processes and affinities for certain development methodologies. Adjusting to the customer needs is what most Romanian software houses promise and try hard to deliver.

10. Competitive Rates

While demand for the highly qualified IT specialists in Romanian has constantly been on the rise, putting pressure on salaries, the costs of the workforce remained competitive when compared to those in most of the other countries in the Eastern European block. The rates you would have to pay for Romanian software engineers are not much different from those practiced by some of the main players in India. As high quality and convenience do not come cheap, do not expect to software projects developed in Romania cost you pennies. You will get what you pay for.

 

Conclusion

The excellent IT professionals, the high number of technical universities, the geographic proximity and cultural affinity, the healthy business environment and the competitive labor costs make Romania an ideal destination for software outsourcing. To find out how your business can take advantage of this great human potential it is enough to do a short test project with the Romanian provider that seems best suited to your needs.

Best of luck!

 

References:

1. “Romania, the Best Choice for Outsourcing”, Colliers International, September 2016
2. “Where in the world? Business process outsourcing and shared service location index”, Cushman & Wakefield, 2015
3. “Romania’s Tech Ecosystem”, Manuel Costescu – State Secretary InvestRomania, 2016
4. “IT&C Talent Map Romania, 2015”, Brainspotting