The surprising Polish IT Outsourcing potential

April 8, 2013 • Business, Post • Views: 2886

Typically, when you think of IT Outsourcing you think, India. However, India is not everyone’s holy grail. Many emerging countries might have better conditions. Poland is a prime example of such pearls in IT.

This post has been published in BizPoland Magazine – April 2013, page 18. 

Back in 2005 I investigated the Polish IT market to assess its readiness for Western European outsourcers. Honestly, I was surprised. The level of innovation, the knowledge, the skills, rates, everything seemed perfect and exceeded my expectations.

What Poland has to offer might seem unbelievable

Compared to India, Poland offers several advantages. It is nearby with a favourable time zone, the cultural background is similar, and thanks to the EU there are common legal regulations known to all. That’s why, together with my business partner we started an Agile software house in Poland in 2006.

Over the past years many analysts have reported the growing Polish IT outsourcing attractiveness. Several Polish cities are ranking high on for example the Tholons Top 100 Outsourcing Destinations 2012. Unfortunately, too often I notice that this Polish, or maybe even Eastern European, potential remains unnoticed [see my previous post about the attractiveness of Eastern Europe as well].

For different reasons people seem not to be aware that Eastern-Europe is developing almost at the speed of light. We realized it especially when talking to our potential (non-Polish) clients. They appear to have a very old fashioned image of Poland. They still think it’s a rather poor and industrial country and associate it only with its legendary figures Lech Wałesa and Pope John Paul II.

It’s great to see how astonished they are once they actually visit Poland. They immediately conclude themselves that Poland is a rapidly developing and modern country with a lot to offer. They notice that Polish IT developers are at least as clever as their counterparts back home, and very often way ahead, winning international programming competitions. Moreover they realized that Polish developers are proud of what they do, and who they are.

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Cost saving still the most common outsourcing reason

As mentioned initially Poland might be skipped as an attractive outsourcing destination. Mainly because the main reason for doing so is still cost saving. Even more so in times of economic downturn.

The price tag being the sole motivation of outsourcing is a mistake. It should be a strategic decision to increase flexibility, to reduce the time to market of new solutions and possibly to eventually enter the attractive Polish/Eastern European market.

Skills will make the difference

We have already noticed that a more important reason to consider Poland as an outsourcing location is the increasing skill gap. In most European countries it’s getting hard to find the right-skilled software developers. Not enough people seem to be interested in IT related careers compared to the demand. Ambitions drive a major part of software developers to become architects, consultants or (project) managers as soon as possible, not leaving enough craftsmen at the core levels.

This is not the case for Poland. Recently, one of our clients stated in an interview for a Dutch newsletter: “The Dutch labour market offers not enough engineers. We solve this issue by hiring Polish developers. Being extremely intelligent and proud of their job they are true professionals. In the Netherlands every educated person wants to become a manager. In other countries they want to learn a craft”.

Today this availability of skills is a unique selling point for Poland. Many good universities across Poland annually deliver well-educated engineers. However, finding the right ones slowly becomes a challenge. Many Western companies already found their way to the leading outsourcing cities like Cracow Wroclaw. Salaries in these areas are rising and so are the costs of the companies’ services. Depending on your needs and what you can offer, it might be better to look for employees or service providers in other Polish cities.

Poland very suitable for smaller outsourcers

The organizational readiness is essential before you can outsource. This is probably the main reason that corporate organisations were the first ones to outsource. They took huge projects to, among others, India. Some were more successful than others, communication, project management and quality control dictated the result.

When you are not so experienced with outsourcing, it might be better to look for a nearby destination. Preferably to work according the Agile approach. In general it is close to impossible for an outsourcer to clearly specify their needs. When you cooperate using Agile with a nearby provider it will be easier to understand each other’s needs and to correct the developers in time. Making all the difference between a failed and a successful project.

Huge corporations are probably still better off in countries like India. Due to the simple fact that India is way bigger, it’s easier to scale up (increase) the team in India than it will be in Poland. But for smaller, more innovative projects and for smaller, less seasoned organizations a so-called nearshore location will prove to be a far better option.

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