Why Is Romania a viable alternative to India and China for offshore software outsourcing?
When choosing your partner for offshore / nearshore software outsourcing you must ponder over the economic and social environment of the potential partner. Romania presents significant advantages in areas that are crucial to offshore / nearshore outsourcing, such as:
More about outsourcing in Romania:
Companies are increasingly sending IT work to hubs outside India. They're saving money but facing a whole new raft of challenges
After 10 months of working with software developers in Bangalore, India, Bill Wood was ready to call it quits. The local engineers would start a project, get a few months' experience, and then bolt for greener pastures, says the U.S.-based executive. Attrition rose to such a high level that year that Wood's company had to replace its entire staff, some positions more than once. "It did not work well at all," recalls Wood, vice-president of engineering at Ping Identity, a maker of Internet security software for corporations. Frustrated, Wood began searching for a partner outside India. He scoured 15 companies in 8 different countries, including Russia, Mexico, Argentina, and Vietnam.
That path is being trod by a lot of executives, eager for new sources of low-cost, high-tech talent outside India. Many are fed up with the outsourcing hub of Bangalore, where salaries for info tech staff are growing at 12% to 14% a year, turnover is increasing, and an influx of workers is straining city resources. Even Indian outsourcing pioneers Tata Consultancy Services, Wipro Technologies (WIT), and Infosys Technologies (INFY), which have helped foreign companies shift software development and other IT operations to Bangalore, are starting to expand into smaller Indian cities, as well as China (see BusinessWeek.com, 11/14/06, "Patience is a Virtue in China, India IT Learns").
"Overall, in terms of productivity and quality of life, beyond Bangalore is better," says Wipro Chief Information Officer Laxman Badiga. "Bangalore is getting more crowded, and the real infrastructure is getting stretched."
So companies are setting their sights on a slew of emerging hot spots for IT outsourcing. Need a multilingual workforce adept at developing security systems and testing software? Buna ziua, Bucharest. Want low-cost Linux developers? Bienvenidos a Buenos Aires, where many companies adopted open-source software after the devaluation of the peso in 2002 made licenses from abroad prohibitively expensive. Other cities on the list include Moscow and St. Petersburg in Russia and Prague in the Czech Republic, according to consulting firm neoIT. Other hot spots include Mexico City, São Paulo, and Santiago in Latin America; and within Asia, Dalian, China, and Ho Chi Minh City, Vietnam.
The Search for Lower Costs
Make no mistake: India remains an IT outsourcing powerhouse, with $17.7 billion in software and IT services exports in 2005, compared with $3.6 billion for China and $1 billion for Russia, according to trade organizations in each country. And India's outsourcing industry is still growing at a faster pace than that of Russia and other wannabe Bangalores.
Yet many companies can't resist the lure of cheaper labor. "Ninety percent of all outsourcing deals in the market today have been structured around cost improvement only," says Linda Cohen, vice-president of sourcing research at consulting firm Gartner (IT). By the third year of an outsourcing deal, after all the costs have been squeezed out, companies get antsy to find a new locale with an even lower overhead.
But moving IT operations into developing countries like Vietnam or China can also pose big risks, such as insurmountable language and cultural differences, geopolitical instability, and the risk of stolen intellectual property. "You keep following the money, but how often are you going to move people around?" asks Cohen. Even the routine day-to-day management of an offshore team can require significant project management expertise. "If you don't have experience and don't do it well, it can negate savings," says Barry Rubenstein, program manager of application outsourcing and offshore services at IDC.
Mix of Outsourcing Locations
Plenty of providers are ready to help clients overcome those obstacles.
Companies including Accenture (ACN), EDS (EDS), IBM Global Services (IBM), and Genpact are building global networks, comprised of operations in a variety of cities, aimed at giving customers a mix of worker skills and labor costs. "We tailor where you want your people, based on the premium you want to pay," says Charlie Feld, executive vice-president of portfolio development at EDS.
Continental Airlines (CAL), for instance, uses an EDS center in India for development of some software that runs on mainframes, but the airline handles some finance work through an EDS office in Brazil. Accenture uses its global network of facilities in a similar fashion. "Today we are about 35% in high-cost locations, such as the U.S. and Britain; 20% in medium-cost locations like Spain, Ireland, and Canada; and about 45% in low-cost locations like the Philippines, India, China, and Eastern Europe," says Jimmy Harris, global managing director of infrastructure outsourcing at Accenture.
When Bob Gett, CEO of Boston systems integration firm Optaros, decided to hire an overseas outfit to handle development of some applications or programs designed to perform specific tasks, he scouted out six or seven countries in Eastern Europe. He finally settled on Akela, an outsourcing company in Bucharest, Romania. Gett found Romania attractive because of its good education system, multilingual population, and abundance of technical talent.
Benefiting from Geography
The move reduces costs by 60% to 75%, Gett figures, letting Optaros offer competitive pricing to customers. "We're going to where the most cost-effective talent is in the world, but it has to be feasible," he says. "It can't be where there are economic, time zone, or language barriers." In fact, Gett needs his application developers to interact directly with customers in the U.S. and Western Europe, so he appreciates that Akela workers speak English and French and are closer to the Optaros Geneva office than workers in India would be.
Companies such as Genpact, Accenture, Wipro, and Infosys are hoping Romania's expected admission to the European Union will make it even more appealing for companies from Western Europe to do business there.
Dalian, a seaport in northeast China, is also turning out to be an ideal center for outsourcing, in large part because of its geography and history. Located in the northeast corner of China, Dalian is close to both Korea and Japan and was, in the first half of the 20th century, occupied by Japan. So there's still a labor pool of Japanese speakers (see BusinessWeek.com, 3/28/05, "China: Golf, Sushi—and Cheap Engineers").
Intellectual Property Issues
Dalian's labor costs are lower than in Japan, so it's become a center for application development for Japanese companies. U.S. firms outsource some technology work there as well. General Electric (GE) and Nissan (NSANF) outsource work to Genpact's operations in Dalian. Genpact was the first outsourcing firm to locate in the city in June, 2000. Accenture and IBM Global Services have since moved in.
There are certainly challenges for companies that wish to outsource to China, including the potential theft of intellectual property. To combat this, Infosys Technologies has disabled USB drives on PCs to limit the ability of workers to take data out of the office. "We've taken extraordinary efforts to protect the intellectual property of our clients," says Stephen Pratt, CEO Infosys Consulting, a subsidiary of Infosys Technologies, which has operations in Shanghai.
companies that need to collaborate closely with offshore workers, South America is an attractive option because the time zones are similar and the infrastructure is strong (see BusinessWeek.com, 1/30/06, "Can Latin America Challenge India?").
Infrastructure Counts
Brazil boasts a mature software and IT industry, and the nation's providers such as Politec, Stefanini IT, and ActMinds are keen to do more offshore business. Stefanini, which has served clients such as Whirlpool (WHR) and Johnson & Johnson (JNJ), derives about 20% of its revenue from international operations, but the company would like to expand that to 50% by 2008.
Total Brazilian software and IT services revenue is $17.16 billion, while revenue from offshore software development is a much smaller $205.3 million, according to Brazil IT, an association of Brazilian IT services providers. "If we can get a client interested enough that they will go to Brazil, they will do business with us," says Eric Olsson, principal consultant with Politec, which has done work for clients such as insurer MetLife (MET), software colossus Microsoft (MSFT), and SAIC (SAI), a provider of a host of scientific and engineering services. Companies are drawn to Brazil's modern infrastructure, with airports and highways that are first world, says Olsson, whose company is the largest IT services provider in Brazil.
Good roads and the developers who drive on them don't come cheap, though. A software engineer in Brazil costs $20 to $35 per hour. That's lower than in the U.S. but pricier than in India.
Threat to U.S. Workers
And while a technically skilled global labor force is a boon to companies, the picture isn't so rosy for U.S. workers. Instead of competing with just India, now U.S. IT workers will need to go up against workers all over the world. In 2005, about 24% of North American companies used offshore providers to meet some of their software needs, according to Forrester Research (FORR). Over the next five years, spending on offshore IT services is set to increase at a compound annual growth rate of 18%, according to IDC.
The effect in the U.S. is that starting salaries in the engineering field—when adjusted for inflation—have stayed constant or decreased in the past five years or so, says Vivek Wadhwa, executive in residence at Duke University. "It doesn't make much sense to get into programming anymore," says Wadhwa, who worries that a lack of talent in certain industries, such as telecom, along with the outsourcing of research and development will erode U.S. competitiveness (see BusinessWeek.com, 11/7/06, "The Real Problem with Outsourcing"). But U.S. companies say that hiring programmers in India, who might make a fifth of what programmers do in the U.S., allows the companies to survive in a globally competitive economy.
After traveling the world, Ping Identity's Wood finally settled on Luxoft, an outsourcing provider based in Moscow that has served high-profile clients such as Boeing (BA), Citigroup's (C) Citibank, and Dell (DELL). While programmers are typically 20% more expensive in Moscow than in Bangalore, Wood found that there wasn't much difference in the hourly rate for the kind of work that he needed. "Indian companies are cheap until you ask for people with experience, and we wanted workers with eight years or more of experience," he says.
Russia's high-end software developers are drawing plenty of offshore business to Moscow and St. Petersburg, which together account for about 60% of the country's software development exports. Those exports have grown from $352 million in 2002 to nearly $1 billion in 2005, according to RUSSOFT, an association of software development firms from Russia, Belarus, and Ukraine (see BusinessWeek.com, 1/30/06, "From Russia with Technology?"). Providers EPAM and Luxoft are starting to gain some international recognition as well, both making Brown & Wilson's Top 50 Best Managed Global Outsourcing Vendors for the first time in 2006.
For Wood, the biggest benefit of working with Luxoft is a cultural one. "One of the reasons we're in Russia is that we found a common value set. Their work ethic is strong, and these people are very outspoken," says Wood. He says engineers in Moscow have no trouble proposing a different course of action when necessary. He says he found workers in Bangalore to be reticent. And since Russian developers stick around longer—turnover is now in the low teens—Wood has plenty of time to take those opinions to heart.
Source: Business Week, 12-11-2006
http://www.businessweek.com/technology/content/dec2006/tc20061207_164472.htm
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Romania rivals Bangalore for availability of exceptionally gifted programmers at rock-bottom prices
Cheap brainpower is one key to Romania's success in outsourcing. Romania is one of Europe's poorest countries, and programmers' salaries start at around $500 a month, which is on a par with India and 50% less than more prosperous neighbors such as Poland and the Czech Republic. Romania also boasts a well-educated workforce with an estimated 60% speaking at least one foreign language.
"Start your career!" exhorts an advertisement in a local magazine seeking speakers of German, Italian, Hebrew, Hungarian, and English for a call center run by Akela, a Romanian software developer that was acquired last year by U.S.-based TechTeam Global (TEAM ). It's among more than a dozen foreign companies that have set up Romanian call centers handling everything from software troubleshooting to airline customer-service requests.
SKILLED AT RESEARCH. Language skills and low wages are only part of the appeal, though. IT executives rave about the topnotch training and problem-solving prowess of Romanian computer specialists. Student teams from Romanian universities routinely take first place in global software-development contests sponsored by Microsoft (MSFT ) and Oracle.
"If you want 5,000 people doing coding, India is a better choice." But for more advanced research and development, "it's better in Romania," says Eugen Schwab-Chesaru, who heads the local office of Pierre Audoin Consultants, which has helped broker several multinational investments, including the recent Adecco deal.
About half the country's 16,000 software engineers now do research and development rather than coding, says Varujan V. Pambuccian, a computer scientist who serves in the national Parliament. German chipmaker Infineon Technologies recently set up a center in Bucharest where about 120 engineers are to conduct research on power semiconductors used in automotive and other applications, a priority for the company. And several of Microsoft's antivirus offerings, including Windows Live OneCare, are built on technology developed by Romania's GeCAD.
FOCUS ON EDUCATION. To strengthen the country's hand in bidding for more skilled research jobs, local industry leaders are lobbying hard for increased spending on IT and mathematics education. Oracle is subsidizing IT courses in local universities and has agreed to offer additional programs in secondary schools.
Oracle has some 350 employees in northern Bucharest working on software development and product support. The workforce is expected to swell to 1,000 in the next few months. "This has become a global and regional hub for us," says Stefan Cojanu, the company's managing director for Romania.
Perhaps most encouraging, some young Romanians who moved abroad during the economic chaos of the 1990s are now trickling back. Software engineer Eduard Fabian worked in Sweden, the Netherlands, and Ireland but moved back to Romania in 2004 to take a job at Oracle. Although he took a big pay cut from his last job in Ireland, "On balance, I'm better off," he says. "And it's good to be home."
Source: Business Week, 08-21-2006
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Long Lasting Tradition
Romania has a strong history of education and research in all fields of engineering and software. Of the 116 universities in Romania, 36 have a computer science department.
“The Romanian education system distinguishes itself through its quality, a fact that is well known at an international level, an eloquent proof of this view being offered by Steve Ballmer, Microsoft CEO, who has recently said that he appreciated the high talent on the Romanian market, especially in computers and Mathematics"
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Governmental Support
"To support future specialists in the IT&C field, discussions have been started on creating a technological park at the Politechnic University in Bucharest. A few big companies are already looking for locations for their research and development centers” said minister Dan Nica at the school year opening at the Politechnic University in Bucharest.
XcommNews, October 2, 2003
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Romanian students earned the first place in "The World for Oracle`s" educational programs
Students from the Tudor Vianu college students earned the first place in the annual “International Data Modelling Competition” organized by the Oracle Internet Academy
The awards were presented on February 17th 2004, during the ceremony celebrating the opening of Oracle Services and Technology Centers in Romania.
“Besides the worldwide recognition of Romanian students` value, this award is a materialization of the success Oracle`s investments in Romanian education had for the past years” said Mr. Alfonso Di Ianni, vicepresident of Oracle for European Union Enlargement Countries.
"Romania was the 2nd country to implemente the Oracle Internet Academy, a global program of Oracle for college students. Romania is the 1st country in Central and Eastern Europe and the 2nd in Europe after Great Britan that benefits from this program.
“Choosing Romania for opening these centers is mainly based on the human potential represented by the large number of specialists with technical skills acknowledged in informatics field” said Mr. Stefan Cojanu, General Manager of Oracle Romania.
Source: Oracle Romania
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Romania shone at the 2003 International Olympiad of Informatics held in Wisconsin (USA)
Competing with computer geeks from 70 other countries, the Romanian Olympic team of informatics won the 1st, which it shared with the American and South Korean teams. The Romanian students won two gold and two silver medals. This was the first time Romania was awarded the 1st place. It is worth mentioning that Romania has made it to the top 5 each time it attended this competition.
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NASA award for Romanian high school students
Two Romanian high school students were awarded in 2003 by NASA for a project about an outer space station with a capacity of 10,000 people. This project was a part of an international contest for high school students. In recognition of their work, the two students have been invited to a special scientific holiday at NASA’s headquarters.
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First place for team Romania at the IT Olympics of Central Europe
The eight edition of the IT Olympics of Central Europe, held between June 30 and July 6, 2002 in Kosice, Slovakia, brought the highest achievement possible to Romania's olympic team of informatics.
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Romania - number 5 in the EMEA region
The Cisco Networking Academy program's statistics show Romania in the 5th place in the EMEA region (Europe, Middle East and Africa) and in the 11th place in the world, with a total of approximately 3.000 students registered and 105 local Cisco academies.
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Romania - A New Star in Software Outsourcing
Offshore Romania 2003, a report by Pierre Audoin Consultants (PAC), made the headlines in the international media devoted to business fields (mainly B2B).
The report presents Romania a the ideal outsourcing alternative to India, due both to the lower costs and to the rich supply of IT specialists with impressive technical and linguistic skills. "(Romania) is the area of choice for everyone else in Europe," Pete Foster, research director at PAC, said “and it is closer in cultural affinity".
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Microsoft has turned its attention toward Romania
For a country the size of Romania (23 million inhabitants), having more than 300 software developers working for Bill Gates in Redmond, WA is a remarkable achievement.
Bill Gates has a very good opinion about Romanians
"Bill Gates once told me that he is very satisfied with the quality of the Romanian programmers and that he is already used to hearing English with a Romanian accent on campus. Moreover, other people from Microsoft share Bill Gates's opinion on the high level of expertise the Romanian speciaists have brought to Microsoft” said Mr. Silviu Hotaran, General Manager Microsoft Romania.
Source: “ Banii nostri”, September 17, 2003
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Oracle pushes for Romanian “Minicom” Valley and starts 3 centers of excellence
“Oracle aims to help push Romania into becoming the Silicon Valley of Central and Eastern Europe according to Giacoletto, Executive Vicepresident for Europe, Middle East and Africa. The firm has opened 3 Oracle Services and Technology Centers in the Bucharest Financial Plaza to supply services to clients all over Europe to prop up this target. The 1st center will be specialized in administrating resources and offering support for Oracle`s partners in entire Europe. The 2nd center, the one for technical global support, is a software development and technical support department for Oracle users in the entire world. The 3rd center, the one for consultancy support is intended to be a regional source for Europe, Middle East and Africa for competences in implementing Oracle`s solutions for telecommunications companies. “Romania has a good tradition in mathematics, a large population and a Government motivated to make a mini-Silicon Valley for Romania” said Giacoletto to BBW. Giacoletto has hired around 100 Romanians, mostly software engineers, for the new project and he expects to increase their ranks to 3 to 4 hundred people over the next 3-4 years.“
Source: Mediafax and Bucharest Business Week Magazine, February 23 – 29, 2004
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Eastern Europe Enjoys the Highest Concentration of Certified Technical Specialists
Bench Games, an international contest conducted by Brainbench (the Global Knowledge Testing Program) to complete online employment skills certifications, had surprising results in 2005. The findings challenge commonly-held views about concentrations of the world's technical talent pools: Eastern European nations such as Romania, Latvia, Bulgaria, and Belarus lead Western countries such as U.K., Australia, Germany, and France in total certifications.
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Romania Ranks High on Professional Competence and Intelectual Training
According to a global IT IQ conducted by Brainbench, Romanians dominate Europe with more than 16,000 certified specialists. According to this research, Romania ranks 6th place in the world and 2nd place in Europe when it comes professional competence and intelectual training. The reasearch studied the qualification of the labour force in various fields: software, general knowledge, finances, health, industry, information technology, foreign languages and communication, management and executive. Brainbench is world`s most important agency specialized in on-line research on professional qualification.
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Romania received BrainBench's bronze certification
Romania earned BrainBench 's bronze certification in "the Most Certified Nations (Overall)" section. This award confirms Romania's competence in the IT field. Being the third nation in the world when it comes to the number of specialists holding certifications is an achievement that few countries have managed. Preceding nations with strong traditions, such as United Kingdom, Germany or Australia, Romania has sent a signal to all businesses interested in offshore and nearshore software outsourcing.
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Shiny Forecast for Romania's Software Industry
“The software industry is growing at a remarkable rate, more than 4800 firms currently activating in this area. Over 25,000 employees are working in the software and services area. The total number of Romanian specialists is also growing steadily as the market expands. The software industry has posted an exponential growth as the big corporations use highly skilled Romanians for off-shore software development. This is a market segment that occupies a significant share of the specialized IT work-force. However, a highly qualified labor potential is left available to develop more competitive high-tech products. “
(“Information And Communications Technology” - brochure of Ministry of Public Information)
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Excellent Track Record on Rent a Coder
"IT freelancers and small businesses from over 130 nations compete for IT jobs at Rent A Coder, an online marketplace for professional services that facilitates over 12,000 IT projects per month. With over a dozen bids per project, buyers at Rent A Coder enjoy a wide selection of low-cost, high-quality suppliers; currently nearly 130,000 freelancers and companies are registered to bid for IT projects. Surprisingly, the largest proportion of these projects ends up not in the hands of Indians or Americans, but rather with IT professionals from Romania, an Eastern European nation.
One such buyer is Athens Development, Inc., a small company from Tennessee that specializes in software applications for marketing. The company uses the marketplace to outsource 100 percent of its software development and support as well as some marketing-related services such as Web design. "For a small company like ours, it might be difficult to get adequate treatment from a typical Indian outsourcing provider as we do not generate enough work," says Tracy A. Childers, the Founder of Athens Development. "A marketplace like Rent a Coder that provides access to talent from all over the world, along with value-added services such as escrow accounts, document storage, and arbitrage, is an excellent solution for us. My business heavily relies on Rent a Coder. If something happens to Rent a Coder, it would be hard for me to switch to a different outsourcing channel," he adds.
For years, Romanians have been among the top three most active nations at this lively international bazaar, according to Rent a Coder Founder and CEO Ian Ippolito. In November 2005 Romanians accounted for 18 percent of the marketplace transaction volume, followed by Indians and Americans with 17 percent and 16 percent respectively.
Why Romania?
Athens Development, which has been using Rent a Coder for 18 months and runs several small outsourcing projects on a monthly basis, has developed a special preference for coders from Romania. According to Childers, Romanians always deliver high quality and are very committed to results. This type of attitude is supported by Ippolito. "Some buyers have told me that they prefer Romanian coders because their experience was that Romanians were harder working, more reliable with deadlines, and didn't pester them with requests for payment before the job was completed."
However, even if Romanian freelancers are as hard working and cheap as it gets, this alone hardly explains why the country, with a population of just 22 million, is performing so well compared to offshore outsourcing giants such as India or Russia.
Struggling to seize a portion of the offshore IT outsourcing pie, post-communist nations in Central and Eastern Europe (CEE) are trying to capitalize on a variety of strengths. Poland and the Czech Republic put forth their newly-acquired EU membership and attractive business climate; Russia builds on a vast scientific and technological heritage of the Soviet era; the Ukraine tries to exploit its new democratic image. In this race, Romania, the birth-place of the infamous Count Dracula, is primarily relying on its talents.
With over 100 universities, the country annually produces 30,000 engineering graduates; 8,000 earn degrees in IT. Romanian student teams won first place at the International Olympiad of Informatics in 2003 in the US and were third in the world at the International Mathematical Olympiad in Mexico in 2005.
However, mathematical and programming skills are typically strong in all CEE countries. What really makes Romanians stand out is their language skills. The Romanian language belongs to the Romance language group, making it easy for Romanians to pick up French, Italian, or Spanish. In addition, they held first place in the Certificate of Proficiency in English exam at Cambridge University, according to a 2003 Pierre Audoin Consulting report.
Add to this the fact the country's struggling economy was not offering a great deal of jobs after the collapse of the central planning system, and you will have a good picture of the forces driving skilled and foreign language-savvy Romanians to online marketplaces like Rent a Coder, Elance Online, or eWork.
How Outsourcing is Affecting the Romanian Economy
The shadow of the 1989 revolution that climaxed in the execution of Romania's communist leader Ceauºescu and his wife, and a prolonged economic recession through the most of 1990s, did not contribute to immediately turning the country into an investor's hot spot. Romania still remains one of the least well-off CEE countries. What makes a difference, though, is that today Romania is a NATO member and a candidate to join the European Union in 2007; its economy is showing considerable growth (8.3 percent of GDP in 2004 and 4.1 percent in 2005) and the country's image is changing.
Big names such as Siemens, Alcatel, and Motorola have set up research and development, software development, or manufacturing facilities here. Siemens is the leading foreign employer with over 2,000 in the local workforce. Oracle maintains its European development and call centers there; its call center in Bucharest provides support in 13 European languages.
IT export became an important part of the economy, currently involving nearly 17,000 people. In 2005 the export of software and IT services reached $250-280 million, estimates Florin Vrejoiu, Executive VP of the Romanian Association for Electronic and Software Industries.
On the export side, Romania is especially strong in three areas: R&D outsourcing, security and embedded software development, and mechanical engineering outsourcing. A good example is Softwin, a 500-person Budapest-based company known for its anti-virus tool BitDefender. Microsoft acquired GeCad, another successful maker of anti-virus software, in 2003, which reflects the increasing interest of foreigners in buying local companies. In 2005 the volume of acquisition deals in the IT industry reached ? 250 million, says John Mennel, a US consultant working for USAID Enterprise Development and Strengthening Program in Romania.
IT outsourcing companies include Akela, Intrarom, IP Devel, and Totalsoft. Mennel estimates that around one third of approximately. 40,000 IT industry employees work for companies with 15 or less people. This estimation, however, uses official statistics and does not take into account hundreds or even thousands of freelancers who do not report their earnings to tax and statistical authorities.
Even the government, a stakeholder which is usually slow to give a hand to the IT industry in other countries of the region, has contributed to the progress by granting a 100 percent income tax exemption for IT workers. What remains to be seen is whether the thousands of freelancers and small businesses who are successful at IT marketplaces will be seduced by corporations (which will inevitably start exploring this lucrative pool of resources) and eventually give up their independence in exchange for handsome salary packages.
This perspective may seem questionable to some, considering Romanians' love of being their own masters. "In Romania people like to own themselves. They do not like to be managed," says Bodgan Castaliu, the 26-year-old executive manager of XcellenceIT, a 15-person Web development company. "As a matter of fact, every Romanian dreams about having a company of his own." Considering that online IT markets still grow at a high rate (over 60 percent in 2005 in the case of Rent A Coder), it looks like big companies may have a tough time taking Romanian freelancers and small businesses under their wings.
Lessons from the Outsourcing Journal:
- Romania attracts Western clients due to the high level of technical and language skills of IT workers, its well-developed (albeit fragmented) IT industry, and availability of a vast IT labor pool, largely untapped by IT outsourcing companies.
- The Romanian IT outsourcing industry is growing ahead of the rest of the economy. IT attracts foreign investors and is experiencing a wave of acquisitions of local companies by foreign investors. Evolutionary transformations, such as further growth and acquisitions as well as a reduction in the level of industry's fragmentation, can be expected.
- Online marketplaces are becoming increasingly popular with small and medium businesses that outsource their IT tasks. These marketplaces enable access to a wide range of offshore suppliers, provide mechanisms for competitive supplier selections, safeguard transactions, and provide a number of other value-added services. Small companies and IT freelancers from Romania are very active at these marketplaces."
Source: Outsourcing Journal
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Impressive linguistic skills for Romanian IT specialists
The Eastern European Translators Association classed Romanians as the best speakers of foreign languages in Europe. A study conducted by this organization shows that 60% of the Romanians speak a foreign language (usually English), 25% of them speak 2 foreign languages (usually English and French), while 4% of them speak more than 2 foreign languages. These figures clearly outdo the ones from countries with higher standards of living. For example, only 40% of the Germans, 35% of the French and 25% of the English speak a foreign language.
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Excellent quality at affordable rates
India and China are not the only places on Earth where you can find highly skilled labour to cover your offshore outsourcing needs in custom software development. As shown on this page, Romania's pool of IT experts earn accolades worldwide for their professional and linguistic competences. Furthermore, they command significantly lower pay rates than their counterparts from developed countries. This apparently surprising situation is fostered by Romania's relatively low cost of living, which means that a Romanian specialist can make a good living on much less money than his American and English couterpart.
Since costs in Romania are comparable with those in India or China, you can rely on Romanian specialists without worrying about cost disadvantages. Remember that we are proficient in Engish and this fact alone can bring important time savings and lead to a high quality of the deliverables. Furthermore, we are located in the European space, which makes us easily reachable by plane from any country in Western Europe. We are also part of the Western culture and thus understand you better than a chinese or indian specialist.
You might end up finding deals in China that seem extremely convenient. Before going for them make sure you take all the important variables into account (distance, linguistic abilities, cultural gaps, etc).
We guarantee you that AROBS will offer you the best value for each dollar you pay.
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