The Secret Behind Romania's Success In Becoming The IT Outsource Hub
In the IT world, working in silos has become a taboo. That’s what is happening in the IT outsourcing world now. Instead of working with several offshore countries, businesses are now flocking towards one IT outsourcing location – Romania. There are two main reasons why so many European companies are outsourcing in Romania . Due to the abundance of English, French, German, Italian and Spanish language speaking people – Romania can be a one stop customer support destination. That’s not possible in traditional outsourcing countries like India. Secondly, for a country situated in the Eastern Europe, Romania is surprisingly tech savvy. The government – both the current and the previous ones – have established a strong IT infrastructure in the country with premier institutions offering courses on advanced Computer Science topics. Let’s delve deeper and see why the industry experts are excited about IT outsourcing Romania.
IT Outsourcing Romania : Why Is Romania Winning The Outsourcing War?
Among the Eastern European countries, Romania has proven itself to be a great outsourcing destination. The IT companies in most of the countries were and still are suffering from lack of efficient work from home processes. But the Romanian IT industry flourished even during the lockdown. In fact, it has grown so much in the last decade that the established Asian outsourcing giants like India, China or the Philippines are getting worried. There are strong reasons why so many big names across the industries trust Romania.
Romania’s Phenomenal Growth As The IT Outsourcing Hub
Romania has been positioning itself as a cost-effective and efficient IT outsourcing hub since the 2000s. Today over 260 well-known companies have partnered with Romanian outsourcing vendors. However, Romania’s success as an outsourcing hub was not an overnight one. It was the result of meticulous planning, commitment and a strong desire to rise above the muck of economic instability.
No Shortage of Skilled Workers : A Great IT Outsourcing Advantage For Romania
The Romanian education system gives extreme focus to computer science and software engineering. Students, here, learn the basics of coding and software development from a very early age. Universities like Bucharest Polytechnic, Universitatea Tehnica Cluj, Babeș-Bolyai University etc are very efficient in teaching not only the already popular courses on Java, C, C++, Python QT and even Kotlin, but they also give immense importance to the emerging technologies pertaining to AI, ML, Blockchain, Containers, Kubernetes etc.
With such a rigorous education system in the country, every year more than 10,000 new software engineering graduates come out of college. All of them are rigorously trained.
Quick Fact: Romanian Developers Secured Rank 19 and 20 In The HackerRank Leaderboard!
The yesteryear communist regime established a strong foundation of the IT infrastructure (and culture) in Romania. In fact back in 1957, under the guidance of the Romanian scientist Victor Toma, Romania built its first computer – CIFA 1 – all by itself. Later came CIFA 2 and CIFA 4. So Romania’s rich IT expertise did not grow all of a sudden. It happened through organized planning.
According to this research paper, there are already 16000 certified IT specialists of Romanian origin in the whole of Europe. Many renowned IT specialists left Romania to gain more exposure. Now they have come back to the country with highly valuable experience.
The Romanian software engineers can think outside the box. This is where they differ from their Indian counterparts. Indian software engineers are great rule-followers. They will diligently do what they are told. But the Romanian software engineers can think outside of the box. They can innovate. They can come up with something entirely new.
The result, Romania is not just a viable offshore outsourcing country when it comes to BPO, a significant number of companies are also outsourcing software development to Romania.
Well Behaved People with Foreign Language Expertise
The Romanians are extremely well-behaved. They know the art of persuasion. The clients of the outsourcing vendors and the end customers as well are satisfied with the Romanian way of service. The direct result of this was, in 2016 the salaries in the call centre industry across Romania increased by 10-12%.
A lot of companies who have shown interest in Romania are particularly excited about the fact that Romanian IT specialists can speak many foreign languages. This makes communication easier and the business process smoother. Below is an infographic that shows why IT outsourcing to Romania makes sense.
The Nearshore Advantage
Romania is quite nearer to the European companies – not only geographically, but culturally too. There are many problems with sending work offshore. However, onshore outsourcing is not viable too. As a middle path, companies are opting for nearshore outsourcing hubs. Here’s why nearshore outsourcing to Romania makes sense for the European businesses.
Romania is within a reasonable reach from the European countries. Even the American countries find Romania easily accessible.
- Travel From London To China Takes 10 Hours
- But Going From London To India Takes 9 Hours
- Travel From Frankfurt To China Takes 9 Hours
- However, Travel From London/Frankfurt To Romania Takes 1-2 hours only.
So, important physical resources can easily be transported to Romania from the parent company. It can also help workers to get the necessary training and instruction on a first-hand basis.
Culturally Similar To The Countries Outsourcing Their IT Work
Since Romania is closer to Western European countries, the Romanian culture is quite similar to that in the West. This makes interactions smoother. The call centre executives in Romania can speak in an accent that sounds familiar to the Western customers. The work culture in Romania is also akin to that in the West.
Overlapping Time-Zones Make Communication Easy
European companies get 8 – 9 or more hours to talk to their Romanian counterparts to clear any issue or to make the decision-making faster and smoother. US businesses, too, get 2 to 3 hours of overlapping working hours when they deal with Romanian companies. This makes issue-solving faster. Romanian developers do not have to wait for the morning to come in order to clear any doubt with the parent company. As a result, the operations remain agile.
Bang for the Buck
Although Romanian companies charge higher when we compare them with those of all the other outsourcing hubs, they charge much less than the European or US companies. In fact, Romanian IT specialists charge 50% less than their German or US counterparts. This is the reason that it has become one of the viable IT outsourcing hubs. According to the same research paper that we mentioned earlier – even back in 2003, the cost of hiring an offshore employee in India was $5,800, in South Africa was $18000 and in Canada was $28000.
Ease of Doing Business
There is a reason behind the cropping up of so many startups ( 200 in Bucharest alone). That reason is the ease of doing business in Romania. It ranks 52 in the Ease of Doing Business index. With tax deductions, little to no red-tapism and the government’s push towards STEM-focused development, the Romanian economic atmosphere has become extremely business-friendly.
Offshore Outsourcing – Romania’s Road to Prosperity
The erstwhile Communist regime in Romania failed to pull the country out of the economic quagmire. After the end of the communist regime, Romania limped towards progress. Gradually, it gained stability and somewhat economic balance. The Communist history of the country-influenced the leaders to craft a Science and Technology focused education system in the country. The IT outsourcing opportunity that the Romanian companies gained has helped the economy immensely. The revenue from IT outsourcing represents 6% of the Romanian GDP.
Naturally, the people, who came out of the abyss of economic instability with the help of outsourcing, are more than happy to please the overseas companies. They go out of their way to do their work as efficiently as possible.
Romania is also known for its scenic beauty
Some Challenges
With so many positive things, there are certain things that are making the offshore outsourcing Romanian companies and the government worried. More and more people are trying to migrate to the UK and other European nations. This brain-drain needs to stop.
- The copyright law is too strictly enforced.
- There is slowdown in the domestic IT projects. This results in the software engineers not getting adequate experience.
- Maybe India is losing out. But other Asian countries like China, Malaysia or Philippines are gradually catching up .
The country needs more investment – particularly foreign investments. The Communist regime kept the country closed to foreign investors and companies. The country is trying hard to lure foreign investors.
Bottom Line
The Romanian IT outsourcing market has matured a lot. It cannot be called ‘new’ anymore. Any foreign company interested in outsourcing to Romania can rest assured that its business is in experienced hands. The skilful workforce in Romania is perhaps the country’s most important asset. Romania has changed the definition of outsourcing – No longer outsourcing means saving costs alone. Romania has also proved that as an outsourcing hub, it can also complement the businesses. In the outsourcing sphere, Romania is here to stay.
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