As Eastern Europe makes significant progress in the IT sector, the region’s reputation as a technological backwater is rapidly fading. There is a considerable demand for outsourcing services which is shown in the fact that the worldwide IT outsourcing industry is worth over $585.57 billion and is expected to reach $701.88 billion by 2028.
Eastern European countries have jumped in on this trend, drawing in companies of all sizes that have come to a conclusion that outsourcing is more cost effective than developing their own products in house. This article explores the growth of IT firms in Eastern Europe and highlights the extent to which the region has come in its pursuit to become a center of innovation and technological advancement.
For many years, Silicon Valley has been widely recognized as a top notch hub for modern technology and software engineering. But things have changed recently as a result of globalization and advances in technology. Because of this people are starting to recognize Eastern Europe as a hotspot of software development business.
Statista predicts that Eastern Europe’s IT services industry would grow from its current US$4.17bn to a whopping US$15.70bn by 2027. The rapid expansion attests to Eastern Europe’s rising profile and importance in the global software development industry.
The Advantages Of Outsourcing To Eastern Europe
Outsourcing to Eastern European countries offers significant cost savings without lowering the overall quality of the work. Because of the region’s political and economic environment, it is feasible to employ capable professionals at a fraction of the cost that would be required in Western Europe or the United States. Because of its competitively cheap prices, Eastern Europe has emerged as the top choice for business outsourcing in recent years.
Data security and compliance are guaranteed in Eastern European nations because of their adherence to European standards. Non-disclosure agreements, copyright rules, and the General Data Protection Regulations (GDPR) help ensure that confidential information remains secure throughout the outsourcing process.
While Western countries in continental Europe, including the U.S. and Canada have witnessed a strong increase in demand for Information Technology (IT), software engineers, and cybersecurity specialists in recent years following the pandemic, some household names have looked towards Eastern Europe to fulfill their needs.
Across the region, companies such as IBA Group, InfoPulse, and SoftServe, among others have provided them with the necessary solutions for business processing outsourcing (BPO).
With thousands of in-house professionals, and development centers in Bulgaria, Czech Republic, Hungary, Poland, Romania, and Ukraine, to name a few, many Western employers have found it more convenient, and seemingly affordable to partner with Eastern European software agencies.
Moreover, the English spoken in Eastern European nations is among the best in the world, making it an indispensable tool for international communication. Eastern European IT workers are well equipped to work with customers from all over the world because of their command of many languages.
One research paper found that there are currently more than 1.45 million experts scattered across the region, representing over 3,100 software development companies.
While these estimates are affected by the growth and investment of the global marketplace, Eastern Europe provides Western companies with more than technical solutions, they’re actively helping them fulfill their dire need as commercial demand for their products continues to expand across borders.
IT Outsourcing Destinations In Eastern Europe
Data from Emerging Europe shows that in 2022, Central and Eastern Europe’s IT talent pool (together with the Balkans and several bordering nations) topped 2.2 million.
The highest concentrations of IT outsourcing and R&D professionals may be found in Poland, Ukraine, Romania, and the Czech Republic. There are about 500,000 IT professionals in Poland, however only 40% are employed in IT outsourcing. There are over 300,000 IT specialists in Ukraine, making it a leading outsourcing hub in Europe.
Constant innovation, government backing of the business, and a rising number of professionals are drawing their attention to Bulgaria and Hungary as well. There are 175,000 ICT professionals in the former and 101,000 in the latter. As a result, countries like Moldova and Slovakia are gaining traction as viable options for IT outsourcing in Eastern Europe.
Smaller countries like Serbia, Bosnia, Herzegovina and Montenegro have seen rapid increases in their IT labor forces as well, fueling the region’s overall economic progress. An increase in the availability of qualified IT experts has aided these nations’ economic development. Among the notable companies in the IT sector is Coinis, which stands out prominently.
Commenting on the prolific growth, Anton Jurovicki, CEO & Co-founder of Coinis, a leader in the ad tech industry that delivers end-to-end subscriptions for webmasters, app developers and publishers, says that “Having companies within our domestic market – Eastern Europe – experiencing an influx of global recognition further established the presence of our information technology industry.”
Over the course of its 9 years in business, the company has evolved into an innovative platform that equips publishers, media buyers, influencers, social media marketers, and app owners with the latest techniques for achieving their goals.
The fast expansion of the IT outsourcing industry in Eastern Europe is challenging long-held beliefs about the level of technological advancement in that part of the world.
The countries of Eastern Europe and its western clients are able to collaborate productively because they share the same values and worldviews. This makes it possible for them to operate together. When both parties in a partnership share the same perspective on management, dispute resolution and working together, the partnership is more likely to be successful and to foster innovation and productivity.
While the Eastern European ecosystem is still somewhat in its infancy, it carries further potential to help revolutionize how both Western European and further reaching markets portray the region.
While there has been promising growth, there remains a bigger intake for opportunities, especially in the IT sector, which has experienced remarkable expansion over the last several years.
“As an international company with a strong presence in major markets, we recognize Montenegro’s remarkable ascent in the IT domain, earning its well-deserved status as a Rising Star in Eastern Europe. With ever-advancing IT skills, language fluency, and cultural adaptability, this tiny nation is opening countless doors for enormous investment opportunities. That being said, we take pride in leading the IT sector’s evolution within our home country and anticipate a future brimming with unparalleled opportunities and groundbreaking innovation,” says Jurovicki.
The region is quickly becoming the go to location for outsourcing technology projects due to its large talent pool, low costs, cultural compatibility, data security, and language competency. Businesses in the area are revealing their potential as a center for IT outsourcing is becoming more apparent to companies throughout the globe.
Final Words
Companies everywhere, including those in Eastern Europe, are rethinking IT outsourcing in light of the changing circumstances of the digital era. 76% percent of business leaders in the Deloitte Global Outsourcing Survey 2022 said they outsource at least some business operations. While cost cutting is still a top priority for 57% of businesses, around half also see the need for new skills and approaches to doing business.
Companies of all sizes are increasingly turning to outsourcing in order to improve efficiency, streamline procedures, and save costs without sacrificing quality. 62% of respondents describe managed services as a way to stay up with the rapidity of digital and technological advancements. Cybersecurity risks can be reduced, and new requirements can be understood, with the assistance of outsourcing partners.
Outsourcing IT allows you to concentrate on your business’s core responsibilities while still having access to a wide variety of IT capabilities, implementing projects more quickly, automating processes, and scaling as needed. Team extension, managed teams, customized solution development, and technology consultancy are all options for firms looking to get the most out of their IT resources. Successfully navigating the difficulties and possibilities of today’s digital world sometimes requires adopting IT outsourcing strategies.
