Nearshore Development Centers

Nearshore Development Centers in Romania, Eastern Europe

When faced with a shortage of local skilled engineers as well as global competitive pressure, Western European companies can look to a near solution and outsource to Eastern Europe or take the more distant Asian route.

At RINF, we provide nearshore outsourcing solutions in Eastern Europe and we know that our strategic position has weighed heavily on the success of our clients' nearshore investments. The set of factors that allow Eastern Europe and particularly Romania to outcompete Asian destinations are revealed annually in research reports to have a crucial impact on the overall investment returns but are still insufficiently known or not given the correct weight.

We present some of these factors bellow and talk about how and why they impact outsourcing results, in the end allowing Romania to outperform traditional software outsourcing destinations.

Geographical, time-zone and cultural proximity

Communication and management oversight have an important impact on outsourcing returns, specifically in ensuring the center will be productive and efficient.

The main strategic advantage of nearshoring to Romania over offshoring alternatives stems from its favorable location in Eastern Europe which allows managers to travel in less than 3 hours from anywhere in Europe, thus facilitating control and oversight.

Another notable advantage, time-zone proximity, would allow centers to work in sync and thus be more efficient. Furthermore, the cultural closeness with similar ways of thinking and shared traditions and customs eliminates communication gaps that could arise.

Quality of available skills

With the highest density of IT professionals per capita in Europe, according to Brainbench, Romania produces 8000 computer science and engineering graduates per year. The country has a history and culture of technical excellence in a region that is already known for its solid education. Romanian IT professionals consistently win top prizes in international mathematics and engineering competitions.

This makes Romania a suitable destination for outsourcing high level IT tasks. The availability of skilled top specialists makes a significant impact on the overall results of the outsourced center. These individuals contribute invaluable experience and often drive innovation in IT system's design and processes.

By contrast, high level engineers are more difficult to find and engage in Asia - despite the high numbers of developers, there are relatively few truly experienced ICT engineers.

Foreign languages

Romanian programmers have excellent foreign language skills with 80% English speakers and large pools of French, Italian and German speakers.

Geo-political risk and ITO environment

Compared to Asia, an investment in an Eastern European software development or support center comes with lower associated risk and promises sustained return on investment perspectives. While India is slowing down, Romania, labeled as an emerging outsourcing destination, has great potential yet as the region's natural engineering talents are drawn towards a vibrant ICT sector.

Eastern Europe and Romania in particular benefit from a stable political and business environment with laws that are frequently harmonized with those of EU countries and economical policies aligned to encourage investment in IT. Sizeable tax deductions for IT engineers and developers are in place to retain talents in the country while a flat 16% profit tax rate is applied to stimulate business.

From opportunity to implementation

While it is one of the most efficient outsourcing delivery models, an NDC's profitability depends upon the ability to attract and retain suitable people as well as on selecting the best architecture. At RINF we leverage our outsourcing experience and ability to attract top IT specialists by delivering complete solutions for setting up dedicated IT development and support centers in Romania.