Over the last few years, Eastern Europe has become one of the top destinations for offshoring. It all started when the giants like Apple, Google, Microsoft, and IBM opened their branches in Eastern European countries. They inspired other tech companies to outsource the development to Central and Eastern Europe, seeing its benefits.
According to Clutch, over 2000 offshore software development companies are based in this region.
Today, many companies prefer to outsource software development as it provides many advantages like working around the clock, cost savings, and ease of scalability.
After the Covid-19 pandemic, distances and borders mean even less. This opens up new horizons for the technology sector. Companies recognized that remote workers can be as efficient as on-site, so they turn to offshore with more ease.
Are you wondering what the top outsourcing destinations in Europe are? Or why choose developers from Poland to create your product? Keep on reading.
What is outsourcing?
Outsourcing is a business approach in which firms employ outside vendors to deliver certain goods or services rather than generating them in-house. Outsourcing is derived from the words "outside" and "resource."
Organizations that contract out different portions of their activities to a third-party contractor are called business process outsourcing (BPO). For many years, the outsourcing business was centered on the manufacturing sector, but it has since grown to cover many goods and services.
Types of software development outsourcing
As mentioned earlier, Polish developers can provide you with various outsourcing services in different outsourcing models. But what are the types of outsourcing? Let me explain.
Outsourcing models can be classified by how they align across three attributes:
- location - onsite, onshore, nearshore, offshore
- relationship - staff augmentation, managed team, project-based
- contracts - time & materials, fixed price
Software development outsourcing: by location
This type of outsourcing model is defined by distance:
Onsite
A situation where a service provider sends skilled professionals to work in your office for a fixed period. It is outsourcing implemented onsite.
Onshore
This means outsourcing services to a provider within the same country but outside your company.
Nearshore
Nearshoring is defined as outsourcing services to a provider in a neighboring or nearby country (in the same time zone).
Offshore
Outsourcing of services to a provider in a more distant country.
There is also a possibility called multisourcing or multisource outsourcing, which means you simultaneously use various location-based outsourcing engagements from multiple providers.
Software development outsourcing: by relationship
Relationship-based outsourcing models describe the balance of ownership and responsibility held by the client and the service provider.
Staff augmentation model
The majority of responsibility is on the client. In this model, you are leasing workers from the outsourcing provider to assist your projects. You still own the product from start to finish.
Managed team model
In this model, the client and outsourcing provider share responsibility for and ownership of developed projects agreeing on which responsibilities belong.
Project-based model
The majority of the responsibility is on the outsourcing provider. The development partner completes the project based on your requirements owning the project from start to finish.
Software development outsourcing: by contracts
The type of contract determines this model of outsourcing.
Time & materials contract
The project has an agreed-upon rate based on the resources and time spent by developers.
This allows a great deal of flexibility and scalability; however, the price you will pay is not always clear ahead of time.
Fixed-price contracts
The project is billed at a flat rate regardless of the time spent or resources used.
The main benefit here is that you know precisely what amount you will be paying; however, some changes often have to be made to fit into the fixed budget.
What are the benefits of outsourcing
To realize why outsourcing can be the correct choice for your company, you must first know why other businesses do it. What benefits does it provide, and how much value does it add? Let's look at some of the most common reasons why companies seek support from outside sources.
Grow more rapidly
Companies growing frequently discover that they might appreciate having additional workers on hand but cannot afford the costs of employing and sustaining additional full-time employees. This restricts your company's opportunities for expansion and reduces any momentum it has gained. Some businesses may take a chance and recruit fresh employees, only to discover that luck isn't always on their side. Instead of slowing down, they've reversed their growth.
Outsourcing work is a wonderful strategy to guarantee that your company continues constant growth while preserving the core of your team engaged in core capabilities since it's more economical to outsource work than it is to establish your in-house staff. You can terminate an outsourcing contract without having to lay off employees.
Retain flexibility
The fact is that your company might not require the same level of personnel all year. Outsourcing, at the very least, gives you more options. Without the financial investment of recruiting in-house personnel, which might take years to pay off, your organization can staff up ahead of a busy season. You can easily change back to an exclusively in-house staff if you've made it through a hectic season. Your outsourcing demands can be scaled with the help of an expert outsourcing agency.
Benefit from top talent
Top talent gravitates to them because the world's largest corporations can afford to pay and benefit their employees considerably more than you can. This may hinder your company's capacity to produce the greatest possible outcomes. It might even put your top staff in jeopardy of being recruited by larger organizations with higher incentives. To assure client satisfaction and competitive performance, outsourcing firms are capable of hiring top personnel
Maintain company focus
Another advantage of outsourcing is that it allows you to concentrate on your company's most critical internal duties. Customer service, for example, is a critical component of every company. However, essential team members may find it time intensive and unpleasant. There are two advantages to outsourcing customer service. To begin with, you offer consistent customer service to your clients. Second, you free up your internal team members to concentrate on their jobs, allowing your company to function more smoothly and, as a result, enhance your ROI.
Increase brand loyalty
A well-trained customer service team, supported by seasoned management, will provide the service that will keep your customers returning. Internally, it's virtually hard to go from no support personnel to an industry-leading support team. Most organizations cannot afford the financial pressure and experience necessary to assemble such a team. Your consumers will feel catered for and valued after using the expert services provided by an outsourcing business.
Fulfill compliance requirements
New restrictions can have a financial impact on even major corporations. Several businesses have stringent privacy and security regulations that might increase the cost of sustaining a workforce.
More significantly, they increase the severity of the effects. It might cost your organization a lot of money if your employees aren't properly taught and don't follow the rules. It's difficult to assemble such an experienced team without the resources of a huge firm.
When outsourcing is the right choice for you?
When should a company outsource? We break it down below.
When you need to lower costs
One of the most well-known advantages of outsourcing is cost savings, and for many businesses, especially in these times of economic turmoil, outsourcing is a major priority. Timing is crucial while weighing your alternatives. It's entirely up to you if now is the perfect moment, but whenever you're ready to cut expenses and improve the efficiency of your back-office operations, outsourcing can help.
The reasons for cost-cutting have varied, but one thing kept static: outsourcing helps businesses focus on what counts by reinvesting funds where they will have the greatest influence. Perhaps you need to invest additional money in sales and marketing to boost income, or you've already made cuts and are trying to fill in the holes, or you need to add duties to your team's plate, but recruiting isn't in the budget right now. Outsourcing is a precise option that meets the bill if you need to minimize expenses for any reason.
When you need to focus on business-critical processes
Adding employees to your team to perform skills that aren't part of your main business can be intimidating, time-consuming, and costly, not to mention impede your company's development. By devoting money and effort to attracting, hiring, training, and retaining employees in areas outside of your core capabilities, you're devoting resources that could be better spent on business-critical tasks. Outsourcing may be your best option in this instance. Many businesses outsource their back offices, accounting, digital marketing, customer support, and other functions to focus on what they do best — and do more of it.
Many outsourcing companies are ready to assist you with activities that aren't within your core capabilities. Is that what your business delivers, even if you're incredibly good at bookkeeping or customer service? If the answer is no, outsourcing makes a lot of sense and can help you focus on your core offering, grow your operations, introduce new services/products, and even increase revenue. As this article demonstrates, timing is crucial. As small businesses increase to mid-size, many discover that they don't have enough time to focus on strategy and growth while continually hiring back- and front-office team members who may be outsourced.
When your business is growing quickly
Anyone who has led or assisted in the leadership of a startup or a company in growth mode understands the rush of adrenaline that occurs when things get going. Your output has increased, your client base has grown, or you anticipate significant expansion. It's an incredible sensation accompanied by the question, "What do we do now?" Fast growth comes with its own set of obstacles, and many organizations discover that they require outside assistance at this point. Now is the time to outsource once more.
When you see the need to scale, establishing a relationship with a BPO provider can help you organize what can be outsourced and what should be kept in-house while establishing a long-term outsourced program (and grow with you). Scaling is the fundamental business of outsourcing companies. Do you need a team of one, ten, or one hundred people who can work with your systems and have particular skills? It's no issue. What better way to expand than with an outsourcer who creates enormous teams with remarkable efficiency daily?
When you need more hours per day for strategy
How much of your day is spent on administrative tasks? We were also curious, so we questioned CFOs about how much of their time is spent on procedural vs. strategic activities in our F&A Leadership Survey (download the complete report here). Would you think that 88% of CFOs stated they didn't have time for strategies because they were too busy with procedural responsibilities like accounts payable, accounts receivable, and closing the books? That's a lot of CEOs that are stuck in the weeds daily. The trouble with running a small to medium-sized business is that you have to wear many hats, and while you're in a player-coach mode, strategic work suffers. However, the strategy will also help your company achieve its objectives and achieve those margins.
Give your non-core duties to an outsourcing company to concentrate on your objectives and engage in productive work again, rather than concentrating time and energy on non-core activities that must be completed with deadlines approaching. Picture not needing to worry about the specifics because you have a reliable staff who regularly deliver consistent KPIs and well-organized reports. This is the brilliance of outsourcing: it frees up your time and energy by taking care of the back-office and administrative activities that eat up your time and energy.
Why choose Poland for outsourcing your product development?
If you are on the verge of deciding which country to choose to locate the development of your product in, let's discuss some advantages of picking Poland.
Poland is one of the destinations known for programming talent with a perfect price to quality ratio.
25% of the entire developer community in Central and Eastern Europe is located in Poland. That means over 250 000 specialists. In Poland, 1.4 persons per 100 are software developers.
Polish development teams are widely recognized as the best programmers in the world. This is why more and more overseas companies outsource IT services to Poland. They recognize the benefits of working with our engineers like:
1. Strong educational background
Nearly 40% of Polish people aged 25-34 have a university degree. This puts Poland in second place in the category among the three dozen countries listed. It makes up around 10% of ICT specialists of all university graduates in the EU. Thanks to the strong emphasis on STEM (science, technology, engineering, and mathematics) education, the market for software developers is growing fast. Therefore, it is quite easy to find skilled engineers in Poland.
2. Stable economy
In 2018, Poland experienced a 5.1% growth in GDP. This trend continues as the Gross Domestic Product is constantly rising. Poland experienced uninterrupted growth for the last 27 years, averaging 4.2% GDP yearly growth between 1992 and 2019.
Also, during the Covid-19 pandemic, the Polish economy remained quite stable compared to other European countries.
3. English proficiency
Polish developers speak English very well, and it is much appreciated by companies wanting to outsource their development to Poland. Poland ranks 11th out of 100 countries on the English Proficiency Index with a very high proficiency mark.
Many Polish software developers spend their careers working on foreign clients' projects, which means daily exposure to the language.
4. Cutting-edge technologies
Although the history of software engineering in Poland is relatively new, we use the latest tools and technologies, work with modern practices and care about code quality. Staying up-to-date with the recent technological trends, we constantly learn and improve our skills. This is reflected not only in the self-development aspect but also positively impacts the products we create.
5. Variety of outsourcing services in different outsourcing models
Polish developers are specialized in different areas and can support you with various challenges at any stage of the product development process. We can provide you with UX design, MVP development, and maintenance of fully functional service.
With the wide choice of companies available, you can work in different outsourcing models depending on your needs and requirements, like building a new team or team augmentation.
6. Smart and effective work
Developers in Poland are familiar with the best project management practices. We work with agile and scrum daily and closely align with clients' teams to achieve the best productivity.
We always stay focused on the quality, performance, design, and user experience while ensuring client satisfaction.
7. No cultural gap
Contrary to countries like India or China, there are no big cultural differences in Poland. What is more, Poland ranked 9th in the world for English skills in the EF English Proficiency Index, ahead of many Eastern European countries. Successful communication contributes to the success of development and product.
8. Acceptable time difference
Offshoring is always a bit challenging due to time differences. How to deal with time zone differences in software development offshoring? Choose an offshoring partner in a time zone closer to you or turn the difference into an advantage.
There is a maximum 9-hour difference between the USA and Poland, so it is possible to schedule a video conference at a time that suits both sides. The time difference is not a problem with the right approach and can be easily turned into an advantage as developers can work around the clock.
Pro tip: to ensure no surprises, save a list of local holidays of your remote team to play ahead and avoid delays.
9. High-security standards
As a member of the European Union, Poland is bound by international security standards and regulations like GDPR. Data protection and secure data management are highly important, especially in outsourcing. Therefore companies choose countries within the EU.
10. Low pricing
Although you might say that India or China have lower hourly rates, European countries usually provide higher skill levels and better product quality. The apps are delivered faster and are more efficient and performant. They are easily scalable, and the code quality makes it easy for another team to take over the project if you decide to grow your in-house team.
Summary
Looking at all of the numbers, there is no surprise that clients from the USA and the UK are choosing European companies as outsourcing partners. Countries like Poland are recognized as reliable, reasonably priced, and having skilled software engineers. What is more, they can work within various outsourcing models like staff augmentation or offshoring.
If you want to read more about outsourcing trends in 2024, go to our post about outsourcing trends In software development. If you are interested in staff augmentation, read the article What Is Staff Augmentation? A Model To Extend Your Team. It will provide you with more information about this outsourcing model.
If you are searching for a reliable outsourcing partner from Poland, contact Selleo. With over 150 software projects and 12 years in business, we can build you a cutting-edge solution fitted to your needs. Review our portfolio and blog for even more insights into our work.
