Dear counterparts,

I recently discovered the German Business Contact Network “Open BC” and I read some interesting articles and comments in their “Offshore Outsourcing Forum”. Some professionals wrote that offshore outsourcing is only a matter of finding a reliable partner with consistent experience, wherever this company may be located. I do not agree. I believe it is much more complex than that… One has to consider offshore business from several perspectives, not only as a cost effective venture. It is also about providing value to customers and meeting the challenges of competition. So the choice of a country where to outsource definitely matters.

Let me tell you what our experience with Romania and Moldova has taught us and why we believe they are to become major outsourcing players on the European market.

I think the first thing that has to be done is finding an appropriate working environment regarding not only costs and infrastructures but also education, legal issues, language and culture, ensuring the lowest possible risks and difficulties likely to arise in the scope of an outsourced project.

Why did some UK companies take back projects that had been outsourced to India ? Not because of lacking expertise or lacking commitment (we do know that they are very capable), but because communication and management were too hard to handle. Of course Indian workers speak English, but not the same British English western Europeans are taught. Of course they are well trained on global business and management standards but their social organization and corporate culture are different from ours, which sometimes makes it difficult for them to understand and meet European customers’ expectations.

So, let us go back to Romania and Moldova. Those countries enjoy the same advantages as any other European nearshore locations : good education infrastructures with thousands of new IT-graduates each year, geographical proximity, closeness to regional emerging markets, low costs, etc.

But they also have something more than their neighbours: Romania will soon be part of the EU, which means adherence to European standards and lower risks regarding legal issues. And what is even more important to me: Romanians and Moldovans have excellent language capabilities. Many low cost countries have excellent IT professionals but few have good language skills at the same time. The result of Romania’s and Moldova’s historical past is that there are still many German- and French-speaking people living there. Students are willing to learn foreign languages. It is very common that IT developers there speak at least 2 of them (English most of the time, as well as French, German, Russian, Italian, Ukrainian, etc.) and they are very good at it. I have some Romanian colleagues who learned French within a few months while it took me years to learn English! So I think this is really an advantage making cultural compatibility barriers fall. They are able to adapt quickly to various cultural environments and have a good understanding of western European clients’ needs and ways of working. This is definitely a competitive edge on the European market today.

As far as prices are concerned, we do know that they are going up in Eastern Europe. Yet Romania remains one of the cheapest locations in this regions and Moldova is the cheapest-one.

Finally, the choice where exactly to outsource in Romania or Moldova is also a crucial question. Working with a team in Bucharest or in a medium-sized province city like Brasov does not induce the same rates and conditions. The next step is to find the city that best suits the type and size of the project. But this is another story Monica has already told you: see Pentablog article from 17th May.