A report by Pierre Audoin Consultants reveals that Romania and other eastern European countries are virtually ignored by UK firms but are predominantly the first choice for the rest of Western Europe.
The report, Offshore 2003 Romania, claims that not only is the cost of using and providing IT services there much cheaper than India, but there is an abundance of well-educated and highly-skilled workers who also have a better understanding of western European culture.
Pete Foster, research director at PAC, told silicon.com that the UK's use of India is largely driven by historical and cultural links to the country, but firms may be forced to look elsewhere as skills and resources become more scarce and costs start to rise.
"There is great competition for cost and there is a view that India is getting more expensive. Europe represents a good opportunity and a new area to find resources. But it is virtually ignored by the UK," he said.
There is both the opportunity for service providers to improve their competitive edge by acquiring resources and companies in Romania more cheaply than India and for users to buy comparable levels of IT service at a much lower cost.
Foster said: "It is the area of choice for everyone else in Europe. From the business point of view it is quite backward compared to Western Europe and probably no better than the Indian and Asian alternatives. But it is arguably closer in cultural affinity. The language and education are good enough."
The report reveals that the mid-range price for offshore software development in Romania is around £100 per person per day and that the cost of employing a recently qualified graduate from an approved specialist university is approximately £4,100 a year. Experienced project managers can also be recruited for between £13,500 and £20,000 a year.
PAC estimates that in 2003 Romanian revenue from European countries will reach £78m, mostly from France, Germany, the UK and the Netherlands.
Talkback
The report's major stressing point seems to be culture, rather than cost cutting. I find it hard to understand how Romania might be culturally closer to the UK or other countries in the west?? Or is this a reference to shades of a certain colour? Very unconvincing.
We have played with ousourcing SW design & maintenance in India and China since 1996. In 2001 we gave up because of incredible high costs of outsourcing. A SW project requires design, verification, integration and especially coordination. Although the salaries in China & India are 2-4 times lower than in North America, the number of iterations to accept a project segment is 6-10 times larger than here. As for the quality of the code there is none: the code came several times not compiled, without coments, structure and of course not tested. The costs to understnd, debug, correct, retest become astronomical. In the last year we ousourced part of the design to Romania: these guys seem to be quite professionals.
Thats okay, the best programmers in every country would be skilled to the same extent. I don't agree why culture,eating,dressing habits should matter. Work ethics in the s/w industry is same all across the globe.
I have seen and worked with east european programmers to be damn good and write superb code. But They are are individualistic and not team players.
Can programmers from russia,romania, china or philippnes do good project management,risk management, marketing, work as a team and take care of quality assurances that comes along with ISO and SEI-CMM certifications?
Of course it is. After all it's a European country sharing pretty much the same history for more than 2,000 years with the rest of Europe. The language is derived from Latin just like French, Spanish, Italian and Portuguese. The society is modelled pretty much after the French society. Of course there are differences, but undoubtfully there is greater affinity between two European country like Romania and UK, than between Asian and European countries.