There is no doubt that outsourcing pays off. After all, this is one of the most effective ways to create mobile applications today. There is much to be said in its favour, whether it is a less time-consuming process, quick response rate or ability to bring in short-term experts without paying the associated costs. Not to mention the most obvious – which is software development costs. Most companies appreciate this form of cooperation. As many as 78% have a positive opinion about outsourcing and BPO (on the basis of Deloitte’s 2016 Global Outsourcing Survey). Yet, some firms have unpleasant issues in cooperation with outsourcing companies. Thus, it is very important to know what you are signing up for. All types of doing business have their advantages and disadvantages, but knowing them is what gives you the opportunity to use the potential in 100%. And believe me, there are very good reasons why the biggest players do so. Of course, you can always rely on your own in-house department. Spend time and money on building a team, supervise it or pay almost 3 or 4 times more for someone on site. But let’s be honest, it will be difficult to keep up with companies that take advantage of outsourcing opportunities. If you are interested in a duel between in-house and outsourcing, check out our 7-round match between the outsourcing and in-house app development. Once you have made the decision to outsource, let’s look at what options you have.
Far, Near or Just Next Door
The selection of the country or region of the company you are looking for can be divided into 3 categories: onshore, nearshore and offshore. What are the differences?
Let’s assume that your company is located in the United Kingdom. If you also choose a company from the UK, it will refer to onshore outsourcing. If it is an other country from Europe, for example from the central or eastern part of it, it will be nearshore. And if it is from another region of the world (like Asia or Africa), then it is offshore. For the purposes of this article, we assume that the company looking for a partner is located in Western, Southern or Northern part of Europe. In this case, Poland, Slovakia, Lithuania and Ukraine will be examples of nearshore countries. The following will be examples of offshore countries, e.g. China, India, Taiwan and Bangladesh.
Of course, the above example only illustrates the approach, and it is not a strict determinant. The countries lying side by side (e.g. the Benelux or the Scandinavian countries), which have, relatively speaking, small cultural differences, a high level of language skill, a high probability of frequent knowledge of their language, and similar rates, are not considered nearshore. But for Germany and Poland, these differences are larger, although the countries are also placed in direct contact with each other.
The IT industry is now getting used to running remote projects. This is a result of the technological development of which it is a part of itself. Thanks to this flexibility we often use tools such as Skype, Jira and Slack even when departments and team members work on site.
Once it’s technically easy to run remote projects, the center of gravity shifts to the cultural aspects and the way business is run.
The Best of Both Worlds
It all comes down to a compromise…
…or at least to the best balance of profits and sacrifices. So, to be able to compare options, it is necessary to have a set of indicators. These are the most important key points when selecting a service provider:
Costs – not always the smallest are the best
The lower, the better? Isn’t it the main factor in choosing the best outsourcing company?
You need to remember that you are going to cut costs anyway. Think about the level to which it will be worth it. Rates are one of the key factors, but they are also the most correlated with the rest of them.
You can’t call it effective if you spend three-quarters of your time talking to someone who simply doesn’t understand you (and you don’t understand them either).
High skills are essential
Although we care about the individual skills of specific developers or teams, we can draw some conclusions from the statistics. Why stats are useful? Competitiveness works at all levels but always starts in small environments. Companies compete first with their direct competitors in which situation the level of all players increases, and the overall game is much more interesting. Companies have to compete (at least in order to gain experience) first on the local market, then in the home country, then region and then all over the world. Where can you find the best developers statistically? According to the Programming Olympics study, the top leaders are China, Russia and… Poland. Yes, Poland.
Isn’t it puzzling that Poland is 3rd? After all, it competes with the biggest countries in the world! Russia has more than 144 million inhabitants, while China has more than 1.38 BILLION. Poland alone… 38 million. What is the reason for this? This is something that will be said about soon.
Language is the core of communication
As in the case of skills, command of English is a good indicator of the level of service we can expect in the whole outsourcing company. In particular – of the general level of English proficiency in a given country.
It may sound a little humorous, but another important factor in communication, apart from the knowledge of the language itself, is… accent. There are not many people saying this, but practically everyone knows how important it is. However, it should be noted that there are no better or worse ones, only those that you understand better intuitively or with whom you have more experience.
It should be stressed that people with excellent language skills and proficiency are everywhere, but some conclusions can be drawn for every region in the world.
Culture and its understanding
There are no more sustainable laws than customs and practices, and there is no better understanding than the one in which we assume something implicit.
I have experienced a situation where two teams working together sent each other information with an FYI note. Both were from different parts of the world. For the first one, this simple acronym meant – that’s to your message, please take care of it. Others understood it differently – okay, it’s our message, we’ll keep this in mind, but in this case, no action is required. It took a few months to understand where the cause of the misunderstanding was.
Understanding and matching cultural differences are extremely important. That is why you need to bear it in your mind.
Why the location is still important
Even if you choose an outsourcing company from another country, you cannot overestimate the benefits of being close to it. Why? Because long journeys are less frequent and more expensive. Large differences in time zones make it also difficult to organise meetings.
You may think – I don’t need visits or frequent meetings. But we have to admit that we are completely different with regard to someone we met face to face than to someone whose name we are not even able to pronounce correctly.
Plus, it feels good to wake up, check your mailbox and have a solution ready. But 12 hours of time zone difference is often too much. Especially when the tasks are urgent and you have to react right away. When your company is on the other side of the world, your employees will not be working overtime. They will simply be sleeping.
Another thing to keep in mind is its geopolitical situation and the region in which the country is located. It is of great importance from the point of view of business stability.
Is Nearshore the Golden Mean?
We can simply cross previous factors (costs, skills, language, cultural fit and location) with 3 options we have – onshore, nearshore and offshore. The correlations are best illustrated by the graphics below:
Of course, the skills factor does not best reflect these relationships, but it does give a general view of technological, educational and business opportunities around the world. This graph simplifies the indicators above, but the idea remains clear.
When it comes to costs, the biggest difference is between onshore and the other two options, which are much cheaper. While the biggest discrepancy in project management and business culture is definitely made between onshore, nearshore versus offshore. The cultural differences can have a significant impact on the implementation of the project and its realization time. Today’s style of working in software development is very similar for suppliers from the same country or close region. For nearshore you minimize this risk because cultural gap in this business approach is minimal, the difference in time is hardly noticeable, but the costs are anyway much lower than in the case of a company from the same country. In turn, in an offshore approach, which tempts you with low costs, the risk of the project succeeding is definitely higher for a number of reasons.
5 Reasons why Poland is the Best Nearshore Destination
#1 Low costs
Mobile application development is never cheap. However, Polish dev teams have a lot to offer. This is due to one of the lowest labour costs in the European Union. You can hire an experienced Polish developer for less than $3,000 a month.
Where does this come from? From the difference of currencies, but also from the competitiveness of developing countries on the market.
The average pay for a Software Developerin Poland is $23,912 per year. A world-class and experienced developer can be employed there for $30,000 – $40,000 per year. For comparison, in Silicon Valley, you have to pay even 100.000 or more a year.
Would you like to know how to save a lot of money? Multiply these differences by a team of 30 programmers…
#2 Top-class skills
Polish developers are one of the world’s top-qualified. The study, which was quoted before, was conducted in 2016 by Hacker Rank. It is an independent survey aimed at assessing and comparing the skills, speed and quality of developers from 50 countries around the world. On a 100 degree scale, Poland has 98 points. As a result, Poland is ranked third in the world (only Russia and China were ahead of it). Want to learn more about the survey and in which areas were the top countries? Visit Hacker Rank.
In addition, Poland is currently ranked 4th in the Top Coder ranking! Polish developers are highly valued all over the world and win many international competitions such as Google’s Code Jam or Microsoft’s Imagine Cup.
#3 High level of English proficiency
English has been a compulsory subject in polish schools for several decades. In the English Proficiency Index of 2017, Poland is ranked 11th in the world. Ahead of Switzerland, France, Italy, Spain and the countries of its region (Czech Republic, Slovakia, Ukraine). The overall level of language proficiency is considered “high” in relation to these studies.
However, it will be more interesting to compare Poland with Russia and China, which gained a slightly greater advantage in the skills ranking. China ranks 36th and Russia 38th. In comparison, India, one of the best known offshore regions, ranks 27th.
#4 Strong cultural matching
One of the biggest advantages of outsourcing an app development process to Poland is the fact that there is almost no cultural gap. Poles are Europeans who know what a hard, but not senseless work is.
Poland keeps abreast with technology and demands of the market. Student exchanges, a huge increase in the number of SSC and BPO businesses located in large Polish cities, make Poland very competitive in relation to the countries of so-called old Europe.
Due to the high level of emigration, Poles have gained experience and cultural knowledge. Today, Poland is becoming one of the most promising emerging markets.
This avoids many of the problems of remote cooperation, such as cultural misunderstandings and different time perceptions.
#5 The location – close and safe for business development
Location is very important for many reasons, but the speed of execution of tasks, travel possibilities, geopolitical factors are the most significant ones.
The first one boils down mainly to the difference in time zones. Poland has small time differences with the United States (about 5-6 hours with New York), very small (about 1 hour with the UK), or none at all for other European countries. With similar time zones, overlapping work schedules and no travel restrictions, the following are fully achieved. You can even visit your partner’s office regularly. Slight time differences result in a short response time and a level of control not achievable in the case of other locations.
Travel options include flight time, frequency and prices. In this regard, Poland has very good possibilities of offering domestic flight operators, connections with the largest airlines in the world, as well as the availability of cheap airlines in Europe and near Asia.
Poland is a well-established country in terms of the stability of the political and financial systems. The region is also free from major political breakdowns. It is also worth mentioning that there are practically no natural disasters there, and those that emerge, are incomparably smaller than in other parts of the world. The climate is moderate and with slight deviations.
Another very important factor is EU membership. Polish international agreements on free trade and employment also have an advantage over offshore countries. This applies to both legal and copyright issues, as well as to remuneration and the most recent GDPR regulations.
Why does Poland seem to be such a good choice?
There are good reasons why every fourth programmer from Central and Eastern Europe is from Poland.
Companies from all over the world cooperate with Polish vendors for many reasons. The most important is the cost/quality ratio of the work performed. Polish developers are world class and the general level of technical expertise is far above average.
To this must be added the commitment. In Poland, IT developer is still a very well paid profession. That’s why employees simply want to work and they want to do it well. This also pays off to the companies that hire them.
A high level of education, very good language skills and the ability to work in overlapping time zones are advantages over offshore countries that are greater than they might seem.
A lot of time and resources are wasted on a simple understanding. Not to mention cultural differences. Communication takes time. Time is a cost, and overheads can be much more than normal hourly rates would suggest.
Therefore, if outsourcing is the best form of cooperation, and nearshoring is its best version, Poland seems to be an excellent choice, which is more than worth considering.
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Jacek Knaflewski CEO of ITgenerator, deeply passionate about helping companies transform their businesses through modern technologies.