Romania has an ever-increasing reputation as an attractive outsourcing destination. Indeed, several studies in recent years (A.T. Kearney’, KPMG) ranked Romania as the one of the fastest growing market in the European Union in terms of IT outsourcing services.
Romania is named by investors an outsourcing valley for BPO, ITO, software development and research programs, knowledge process outsourcing operations, as well as for shared service centers.
Romania is chosen because of its Geographical (1-3 hour flights) and cultural (business ethics) proximity to Western Europe facilitating close relationship between client and vendor compared to offshore locations; Strong aptitude for multilingual skills; Knowledgeable and experienced IT workforce; Academic readiness to back high demand in talent pool continuity; The right price-quality ratio; EU member state, which simplifies legal and financial issues and Political and economic stability.
As a flourishing technology hub, the country is becoming a leader in ITO. As per data from ANIS, Association of the Software and Services Industry in Romania, the country currently has around 50 offshore centers owned by large international IT vendors. More than half of these are BPO centers, 30% are IT services-related centers, and less than 20% are R&D facilities.
The labour force employed in the outsourcing sector has been increasing over the years, from 15,000 employees recorded in 2007 to over 50,000 employees currently working in the outsourcing industry, as per data from the Romanian Ministry of IT.
Even though Romania does not offer lowest prices when it comes to outsourcing services, the labour force’s multilingual, technical and soft skills proficiency make the cost very competitive compared to the quality of the outsourcing services in India, for example.
Alina Plaia, VP at Luxoft, comments in an interview for ZDNet, a news portal for IT professionals, that the cost of outsourcing to Romania compared to India is justified due to the seniority of Romanian staff and the level of execution. She adds: “The new age of outsourcing is more about innovation and outsourcing certain capabilities rather than merely doing things cheaply. More and more tasks are being outsourced because they cannot be done in house, not only for the economic reasons. Therefore, the cost-related question is often irrelevant.”
The country’s sizable and multilingual labour force and student body are among the main lures for international companies to outsource in Romania. The diverse linguistic profile make it especially attractive for BPO operations that require interaction with customers, while the large pool of IT professionals ensures best-in-class ITO operations.
Romanians are known internationally for their strong aptitude for speaking European languages; primarily English, followed by French, Italian, Spanish and German. In the past 10 years, around 20 multilingual major call centres and BPO organizations have come to operate in Romania, finding here a large multilingual pool which they have drawn upon to serve millions of customers across Europe and the USA.
Almost all Romanian pupils (95.6%) study at least 2 foreign languages according to Eurostat, Romania being among the first European countries as regards to the percentage of pupils learning foreign languages. According to the study “Software & IT Services in Romania – A Study on the Development of the Industry of Software and IT Services in Romania”, commissioned by ANIS in Romania and developed by IDC (International Data Corporation), 95.4% (more than 1.74 million) of the students were studying English. German was studied by 8.6% of the students (156,236), while French was studied by over 1.55 million (85.0%) students, which is more than any other country in CEE (Central Eastern Europe).
The same study also reports Romania to have the largest pool of human capital in Southeastern Europe (SEE), with a total labour force of more than 9 million. In 2016, the Romanian IT sector employed more than 100,000 professionals. The majority of them are technical specialists, such as software engineers, analysts, developers, and project managers.
Indeed, when it comes to ITO, Romania is 1st in Europe and 6th in the world, in terms of number of certified IT specialists. There’s a pool of about 100,000 people in various IT-oriented profiles, 58,000 highly qualified IT specialists. The successful presence of global high tech companies including Microsoft, IBM, P&G, HP, Oracle, Wipro, S&T, Accenture, WNS, Intel, as well as Luxoft, Ubisoft and Amazon confirm Romania’s ITO experience and potential.
The outsourcing business is expected to grow in Romania over the years to come, albeit limited by the numbers of IT professionals that the country’s universities can educate. HR departments complain that it’s now taking longer to find that candidate they are looking for and in some cases, developers’ financial expectations are increasing.
Local employers have complained in recent years with the relative low number of IT professionals delivered by the technical universities – 6.000- 7.000 graduates per year, as the need on the market is for double the number. At the same time, the IT sector has become more important than ever for the Romanian economy, as its contribution to the GDP has overtaken consolidated industries such as agriculture and constructions. For the first 3 quarters of the 2016 financial year, the agriculture sector where more than 2 million people work has contributed with only 4,4% to the GDP, and the construction sector (with over 370.000 employees) contributed with 5,2%. The IT&C is per contract responsible for 6,3% of the GDP in the first 9 months of 2016.
Romania holds its position as a home to more offshore and nearshore centers than any other SEE country thanks to offering a perfect balance between cost and quality, a flourishing technology hub and abundance of professional and multilingual labour pool and it will continue to hold this position as long as this balance remain in place and the efforts made by the local industry to increase the number of qualified resources will be successful.
Ionut has more than 10 years of experience in IT, both on the private and governmental side. He was the head of the European Affairs Department and Deputy Secretary General at the Ministry of Communications and Information Society then Trade Commissioner of Romania to Montreal. From 2013 he started working for Code Factory, first as business development manager and then as head of operations. Now he is VP Operations Code Factory Group. He is certified in project management (Prince2) and IT service management (ITIL).
Code Factory is an independent, global, custom software development and quality assurance services company. We have been operating successfully since 2004; we have a portfolio of over 300 projects already developed, and employ more than 200 specialized and certified testers and software developers. Our software delivery facilities are located in Moldova (Chisinau) and Romania (Bucharest).We also have local presence in the Netherlands and Chile and service clients in many countries including the UK, USA, Canada, Norway, Sweden or Austria.