Eastern Europe Software Development Outsourcing: Market Overview

It is pointless to cite stats and impressive facts about Eastern Europe when the region is often so ambiguously defined.

The name alone suggests that the region is made up of the countries positioned in the eastern part of the European continent, namely Belarus, Ukraine, Romania, Moldova and Russia.

But this would only be partly true.

Due to its tumultuous past and complex international relations, Eastern Europe extends beyond the purely geographical notions of the East; It is a cluster of countries with a shared ethnic and cultural heritage, history and/or close political relations.

Even defined as such, there are two official ways to look at Eastern Europe.

The United Nations Department of Economic and Social Affairs recognizes the following countries as Eastern European:

• Belarus
• Bulgaria
• Czech Republic
• Hungary
• Poland
• Republic of Moldova
• Romania
• Russian Federation
• Slovakia
• Ukraine

The second definition of Eastern Europe, albeit somewhat outdated, is based on past political ties in the region. It includes the Baltic countries (otherwise classified as Northern Europe), as well as the former Yugoslav republics and a few of their neighboring Balkan countries (otherwise classified as Southern Europe).

So, what countries make up Eastern Europe?

For the sake of a more comprehensive, yet focused overview, we have tried to find a happy middle between the two definitions of the region.

We focused on the countries with similar quality of IT education, professional standards, business environments, skill levels and cost.

Our research of Eastern European custom software development companies, therefore, encompasses:

• Belarus
• Bosnia & Herzegovina
• Bulgaria
• Czech Republic
• Croatia
• Hungary
• Montenegro
• North Macedonia
• Poland
• Republic of Moldova
• Romania
• Russian Federation
• Serbia
• Slovakia
• Slovenia
• Ukraine

A Few Key Facts To Know About Eastern Europe Software Development Outsourcing 

Eastern European countries are classified as economically developed, yet remain highly affordable compared to their other European neighbors.

The region is one of the most sought-after software outsourcing hubs because it combines the best of both worlds:

• Highly specialized software professionals
• High-quality output
• Access to the latest tech and innovation
• Familiarity with Western culture and professional values
• Modern legal and business systems
• Digitized, efficient and safe banking
• Cost-effectiveness

However, there are a few technical dissimilarities to be aware of:

• Not all Eastern European countries form part of the European Union (EU): While most of these countries have favorable trade relations with the US, not all of them come with the added benefit of the EU’s economic, logistical and legal systems. If thinking about partnering with an Eastern European software development company (one without the US or EU offices), be sure to learn more about its home country’s relevant trade relations with the US. The US Chamber of Commerce is always a great source of information for all international business matters.
• Not all Eastern European countries will have the same level of English proficiency: Some Eastern European countries’ public education systems introduce English classes as early as the first grade of primary school, while others don’t place as much emphasis on the language. A great resource to check out for more info on this score is the EF’s ranking of the English language proficiency by country.
• Eastern European countries with EU membership tend to command somewhat higher prices than its non-EU peers.
• Eastern European countries span across three time zones: From Slovenia and Check Republic in the easternmost, and the Ural mountains in the westernmost part of Eastern Europe, the region covers three time zones, namely GMT +2 to GMT +5.

Why Outsource Software Development To Eastern Europe?

In some Eastern European countries, children start coding as early as at the age of five. The trend of tech-focused education continues throughout the school system.

The region abounds in high quality IT university programs and academies.

Thanks to these initiatives as well as the government and business incentives for software development in Eastern Europe, as of 2019, the region has been rated among the top five outsourcing destinations globally.

Software Development In Eastern Europe: Hourly Rates

Eastern Europe has some of the best and most affordable software development pricing structures in the world. On average, brands can expect to pay between $25 and $50 per person per hour.

This is a drastic cut form North American software development prices, which can exceed $170 per person per hour.

Eastern Europe Software Development Outsourcing: How To Find The Right Software Development Partner For My Business

Go in prepared. This is crucial for a successful search.
Here is what we mean by it:

Before you start your search for Eastern Europe software development companies, look at your own organization first.

Start by clearly defining your requirement, i.e. the tasks you will want to outsource and the expertise you will need. Be sure to address the “why” behind every point, preferably backed by relevant data.

Next, prepare a provisional budget that will include all the direct and indirect costs related to outsourcing, such as third party subscriptions, currency exchanges, bank fees, travel and training costs, equipment and other applicable expenditures.

Keep in mind that your provisional budget is likely to change by the time you decide on a partner, but it is an important strategy to ensure the maximum payoff of the outsourcing project - part of which is finding a development partner that can provide the biggest return on your investment.

And, finally, define any other particularities that you find important for the successful development of your software solution, i.e. the delivery of the company’s services; High English proficiency, perhaps? Closer time zone? EU membership? Other important features?

All these will act as key parameters in your search.

The next steps to take as you start looking for an Eastern Europe software development company, are:

Focus On A Hub Or Two

Your key requirements, including your budget, will help you narrow your options down to one or two countries that are most likely to deliver the biggest value to your organization.

Strive to learn as much as possible about doing business in the target markets. This will not only prepare you for a partnership with a local software development company but also equip you with important questions to ask during the company screening process.

Research Local Software Companies Based On Skills And Portfolios

With your target market(s) defined, you have a more manageable pool of candidates for software development outsourcing.

Your goal before starting conversations with any of them should be to filter out a few of the best Eastern Europe software development outsourcing companies, that promise to provide the biggest value to your business.

A little note for context:

Eastern European software development companies tend to develop deep expertise in particular fields, technologies and some even in industries.

As mentioned earlier, your pre-defined requirements will act as search parameters and help you identify the candidates with the expertise and experience you need.

Screening Software Development Companies in Eastern Europe: Questions To Ask

You are now in the final stages of your search for the perfect software development partner in Eastern Europe.

You have identified a couple of the best candidates and are looking to sign a contract with one of them.

Here are the questions to ask to select your cosignatory:

• How do you usually deliver your services? Most Eastern European software development companies will offer two types of services: staff augmentation/dedicated teams and project-based services. If yours is a one-time project, you will want to look for a company with a healthy and recent portfolio of project-based development. If you need a long-term collaboration, get more information about their staff augmentation services, terms and conditions.
• How do you recruit your talent? The best Eastern European software development companies will actively work on building and promoting their brand and maintaining partnerships with universities and tech communities. Besides, their proactive approach to attracting the best talent their market has to offer, staff augmentation service providers will -or, should, rather- also include the client in the recruitment process, allowing you to handpick your own dedicated team.
• What is your attrition rate? How do you earn employee loyalty? Research shows that the biggest reasons why employees leave their jobs are poor management and professional stagnation, mainly in terms of learning. Eastern European software development companies that are on top of their game will know and internalize this information; They will be dedicated to their staff, compensating them adequately, acknowledging their dedication and granting access to continuous learning.
• How do you ensure transparency over the development process? Most companies will have their preferred project management tools and development methods/processes in place to grant you visibility and control over the progress of your project.

Which Eastern European Country Is Best For Software Development?

The country to look for Eastern European software development companies largely depends on your personal brand needs, as different regions tend to excel in different areas of software solutions.

However, overall, Eastern Europe is possibly the best value when it comes to a return on investment for software projects. Top-rated companies in this area offer affordable development costs, demonstrate well-rounded knowledge of western culture and businesses, and also have wide-ranging expertise.

...

Looking To Outsource Software Development To Eastern Europe?
Check Out Our Comprehensive List Of The Best Eastern European Software Development Companies Above!