Europe is a well-bred region of technological activities from hardware, software, and other IT services. For instance, countries such as UK and Netherlands are dominant in procuring software development services from foreign companies. On the other hand, countries like Ukraine and Poland are brimming with a pool of IT talent and have thus become software development providers. In addition, other countries outside of Europe look for outsourcing companies in Europe, making the area a hotbed of IT services and software solutions.
List of the Content
- State of IT outsourcing in Europe
- Countries that outsource it most
- How to research outsourcing companies in Europe
- Popular outsourcing destinations in Europe
The software development outsourcing industry in Europe is further backed up by solid factors such as the convenient geographical location. Among the European countries, there are similarities in the use of common languages, culture, and a general mentality, making interaction easier. Also, a close time zone facilitates foreign European countries working together and the common expectation of software quality.
You may now ask, “What causes one European country to outsource from another?” There is a difference in pricing for software development services between Western and Eastern Europe. Besides, Eastern Europe has a greater pool of talent, making their IT services more affordable than countries in Western Europe that struggle with IT talent and workforce shortage.
STATE OF IT OUTSOURCING IN EUROPE
IT outsourcing is a widely adopted practice across Europe, and its popularity is growing rapidly. Several factors are contributing to this trend, including the increasing demand for digital transformation, cost reduction, and the need for specialized skills.
A large talent pool of developers, high-quality IT education, and strategic location are among the factors that encourage outsourcing of IT services in Europe, especially Eastern Europe. Eastern European developers are among the world’s most experienced and qualified software development IT experts, and their services are usually affordable.
In turn, most Eastern European countries have the IT industry as one of the top sectors in their economies. Countries such as Ukraine, Poland, and Romania have experienced major returns from outsourcing software development over the last five years. In a country such as Ukraine, for instance, the share of the IT industry in the Ukrainian economy is 4% of the GDP. Ukraine often becomes a more financially attractive outsourcing destination in Europe when, for example, Poland has a significantly better business environment at the cost of higher prices.
Most of the hired software development companies in Europe offer dedicated development teams, R&D, custom software development, and consultation services. Most developers in the European market are experts in various technologies and different development services. Major organizations are known to have a solid relationship with software development companies in Europe due to the high-quality services they acquire. Such companies include Manodo (KTC Control), Lebara, Anoto, Anybill, Staffcare, and Spoke, which are well-known for outsourcing in Europe.
Want to know more about outsourcing in Eastern Europe?
Find out what the advantages of Eastern Europe are in terms of outsourcing and what countries are the best to choose from.
COUNTRIES THAT OUTSOURCE IT MOST
The rapid advancement and growth of technology are a coin with two sides; one side is positive, while the other leaves developers to struggle and match their skills with the latest IT developments. More creativity and knowledge are required by developers whose work is being replaced by technological innovations. Countries that face such challenges of the limited skilled workforce in technology and overpriced IT services in their home country find consolation in outsourcing from other countries.
Countries with challenging IT skill sets include the USA, Canada, Germany, and the Netherlands. It is difficult to find qualified IT experts in these countries due to various reasons, such as the small growth rate of the German population. In the Netherlands, approximately 10% of the software developers required are available. This could be attributed to poor literacy among Dutch teenagers and youth. North America faces a skill gap while it has numerous IT job openings, which causes companies to experience losses if they do not outsource the required services.
Many countries face a shortage of technical skills which in turn results in high rates of software development services making the companies outsource. There are several reasons why countries outsource software development to Europe:
Skilled workforce: Europe is home to a highly skilled and talented workforce, including software developers who are proficient in various programming languages and technologies. Many European countries have well-established education systems that produce highly skilled graduates, making them an attractive destinations for outsourcing software development.
Cost-effectiveness: Outsourcing software development to Europe can be cost-effective, especially when compared to outsourcing to the United States. Many European countries have lower labor costs than the US, making it a more cost-effective option for businesses.
Time zone advantage: European countries are generally located in a favorable time zone for many businesses, making it easier to work with European software development teams without significant time differences.
Cultural similarities: European countries share many cultural similarities with other Western countries, making it easier to do business and communicate effectively. Many Europeans speak English, which is the primary language of business, making communication and collaboration easier.
Access to new markets: Outsourcing software development to Europe can give businesses access to new markets and customers, which can be beneficial for companies looking to expand globally.
Overall, outsourcing software development to Europe can be a smart business move for companies looking to take advantage of the skilled workforce, cost-effectiveness, and other advantages offered by European countries.
HOW TO RESEARCH FOR OUTSOURCING COMPANIES IN EUROPE AND WHERE TO FIND THEM
Once an organization has decided to outsource software development services from Europe, the next big step remaining is picking the right IT outsourcing company for the project. A client can acquire outsourcing companies to compare and choose from listing platforms such as Clutch, Extract, and Goodfirms.
Clutch allows applying various filters to get the list of the companies that suit you most. Including but not limited to the location, average hourly rate, and the number of employees.
These are sources from which clients can view different IT companies and even information about them. A client can then acquire the appropriate company in accordance with his or her requirements for the listing portals. The advantages of using listing resources are:
- The availability of detailed information on the available companies. Each of the IT company’s information on the research and review portals is specified in terms of location, hourly rate and the client’s reference.
- Another pro is that the information made available to the client is collected from the company’s customers; therefore, the results are a recommendation of their requirements.
However, the disadvantage of using the listing services is that companies do not get the chance to advertise their services, meaning the client could be missing some essential details.
Here are a couple of examples of the most popular listing resources for software development companies and how you are going to see the company profile there.
For large, medium, and small enterprises trying to make decisions on which company should provide them with digital or IT and marketing services, Clutch is the better option. It is a research firm that provides analysis for companies that offer procurement and technology support services.
Standard preview of the software company’s profile at Clutch.co. By opening the full profile, you will access the complete texts of all reviews, portfolio items, a list of industry domains, etc.
Besides being a research platform, GoodFirms offer reviews of software development companies. The availability of reviews enables clients to choose the best software design, development, and marketing services. GoodFirms also offers a platform for software development companies to increase their clients and brand awareness.
Standard preview of the software company’s profile at GoodFirms. Worth to say, that often you can find a big interview with the CEO of the company in the profile and learn more about the company’s core values and cooperation model from the story-like text.
Another recommendable source of outsourcing software companies in Eastern Europe is from Google. At first look, this recommendation looks pretty obvious, but even a simple Google search can be done in many ways. First, you can play with the search queries, for example, “Outsourcing companies in Europe” (36.4M Results) or “.NET development company in Europe” (3M Results). You need to take into consideration your location as well. If you are located in Europe, it is worth using keywords with the particular country, like “outsourcing company in Ukraine”. Google tends to show you relevant results in close proximity to you, and if you’ll use more general phrases like “software outsourcing companies,” you are more likely to get the majority of the results in the EU. For anybody from North America, it is worth adding the words “in Europe” to let the search engine know that you’re interested in getting the list of the companies in that particular location.
Before approaching a search on Google, there are a few things to consider to save your time. Ask yourself a couple of questions about the ideal company you want to find.
- What are my primary evaluation criteria: price, experience, location, or experience in a certain domain?
- Which cooperation model am I looking for: cost +, time and material, or dedicated resources?
- What location is more suitable for my needs? (we will explore three main outsourcing destinations in Europe further)
- Does the company necessarily have to have expertise in your industry? If yes, define which domains have priority for you? For example, you’re looking for somebody to work on firmware for your new video streaming device. Should it be the company experienced in video streaming or embedded systems development?
Are you price shopping, or is it the relevant experience that matters most? Maybe you need to work with an outsourcing company that leverages a dedicated software development team model instead of a project-based approach. In this particular case query “hire dedicated development team” will be a better choice. Use your answers in the search queries and get results that really matter to you. Having a list of the companies with, for instance, fintech expertise is much more convenient than browsing through the infinite list of the companies related to the keyphrase “offshore software company in Europe” with the hope of finding “finances” in the industries sections of their website.
Evaluation criteria for the outsourcing companies
Finally, a client should always use a point of comparison when going through the outsourcing providers for them to choose the best IT company.
Choosing the most affordable company is the easy way to go, but cheap can become expensive later. Therefore, the best decision would be to pick a company with stiff competition with the rest so that their service rates do not differ from the other outsourcing companies.
What is the actual cost of hiring cheap developers?
Have you considered the importance of focusing on quality, productivity, or developers’ experience instead of just pricing? Find the comprehensive guide on hiring cheap developers vs expensive specialists and how it might change your final decision.
Pay close attention to each company’s previous work. While at their site, read through their portfolio to get acquainted with their know-how in design, specialization, and use of modern technology. For instance, if you want front-end development, the outsourcing company should have experience in UX and design. Also, companies that are focused on particular sectors are more likely to excel at the specific areas if that is what your project involves.
The interaction between the customer and the IT company needs to be constant and interactive. As a client, you need to be frequently updated on the work status. The more projects an outsourcing company has handled, the more experienced it has in communication with clients.
Outsourcing of IT services requires good project administration in terms of management of resources, time, the gathering of requirements, and reaction to change. The outsourcing company that you select should be able to ensure the project goes on smoothly for completion of the set budget and time frame.
POPULAR OUTSOURCING DESTINATIONS IN EUROPE
Outsourcing has become one of the increasingly popular strategies to reduce development costs, increase efficiency, and focus on core competencies. Outsourcing allows companies to delegate non-core functions to third-party service providers that can perform them more efficiently and cost-effectively. In recent years, Europe has emerged as one of the top destinations for outsourcing, thanks to its favorable business environment, talented workforce, and cost-effective solutions.
Let’s explore the most popular outsourcing destinations in Europe and the factors that businesses should consider when selecting an outsourcing destination.
Ukraine is a popular outsourcing destination in Europe. The country has a highly skilled workforce, with over 100,000 IT professionals, and is known for its technological advancement, making it an ideal destination for businesses looking for software development services. Ukraine also has a competitive cost advantage, making it an attractive option for businesses looking to reduce costs. Also, it has over 4000 IT companies and 100 R&D centers resulting in competition leading to affordable service rates and high-quality standards of software development processes.
Want to know the average development rates in Ukraine?
In the article, we’ve discussed the core aspects related to outsourcing to Ukraine and provided relevant information about the salaries of software developers.
Poland has emerged as one of the top outsourcing destinations in Europe thanks to its great business environment, skilled workforce, and cost-effectiveness. The country has a large pool of IT talent, with over 300,000 IT professionals, making it an ideal destination for outsourcing IT services. The IT industry is a fundamental sector of the Polish economy. Its value, including hardware, software, and IT services, summed up to 2.1 billion EUR in 2018, with a forecast of 2.4 billion EUR in 2021.
Romania is a popular outsourcing destination in Europe, particularly in the IT industry. The country has a large pool of tech talent, with over 170,000 IT professionals, and is known for its competitive costs. Additionally, Romania has a Western-oriented culture and is a member of the European Union, making it a culturally compatible destination for many outsourcing companies in Europe.
The Czech Republic
The Czech Republic is another popular outsourcing destination in Europe. The country is known for its low labor costs, making it an ideal destination for businesses looking to reduce costs. Moreover, the Czech Republic is strategically located in the heart of Europe, making it an ideal location for businesses that require a central European location. The number of IT specialists in the Czech Republic reaches the point of over 100,000 software developers.
Finally, Europe, particularly Eastern Europe, is a region rich in software development services, among other IT solutions. It is a fortress that companies can seek in their efforts to match up to the ever-evolving technology. A country like Ukraine, for instance, has professional IT experts who offer nothing less than high-quality IT services and solutions worth investing in.
How to find outsourcing companies in Europe?
If you are searching for an outstanding offshore software development company in terms of their experience and skills, contact us at Existek. We offer services ranging from dedicated software development teams, custom software development, and professional IT services to software product development.
Why is Europe attractive for IT outsourcing?
This region is attractive for IT outsourcing for a variety of reasons:
Highly skilled workforce
Access to advanced technologies
Multilingual talent pool
Strong data protection regulations
What are popular destinations for outsourcing companies in Europe?
The following destinations have become excellent options for finding outsourcing companies in Europe:
the Czech Republic
How do businesses research outsourcing companies in Europe?
Of course, they can use many approaches to find their outsourcing partners. One of the most common options is referring to the rating and review platforms like Clutch, GoodFirms, Extract, etc.