Why Genos should be your outsourcing partner 

When you’re choosing your partner for outsourcing there are many factors that you should take into consideration:

  • The pool of talented developers
  • Advantages of nearshoring vs offshoring
  • TCO – total cost of outsourcing
  • GDPR considerations
  • Selecting the optimal outsourcing partner

The pool of talented developers in Romania

When choosing the ideal outsourcing destination for your business, you should create a short list of countries where the pool of IT specialist is large, developing and talented.

Details and advantaged of choosing the IT industry in Romania:

  • Ability to scale large due to the large pool of IT specialists (According to 2016 A.T. Kearney’s Service Location Index, Romania ranks 1st in Europe, in terms of number of certified IT specialists with a pool of about 100,000 people in various IT-oriented profiles)
  • Highly-educated workforce (more than 7,000 IT graduates every year, with by far most candidates coming from the technical universities in Bucharest. Seven thousand IT graduates per year is a conservative estimate)
  • Worldwide Romania is the 6th country regarding the number of certified IT specialists per capita, ahead of UK, Germany and Canada, thanks to its educational system that favours multilingual and technical skills.
  • According to Brainbench, Romania is situated in the top 5 worldwide regarding skills in computer technical support, technical help desk, network technical support, computer electronics, telecommunications, LAN/WLAN communications, network design, ASP.NET, HTML, PHP, web development concepts and many other
  • Employees with excellent language skills (English 98%, French 27%, Spanish 13%, Italian 10%, German 10%)
  • Being part of EU and NATO no visas are required for EU citizens
  • Developers are skilled Java/J2EE, C++, JavaScript, .Net, SQL, jQuery, C#, HTML and CSS, ASP.Net, Microsoft SQL Server and many other technologies

Genos is located in Bucharest where more than 45% of the software developers in Romania are active on the labour market.

Nearshoring vs Offshoring

Traditional software outsourcing in offshoring, typically requires the collaboration with software developers from another continent. Offshoring as a concept implies outsourcing of production or services to another country.

Farshoring is part of the offshoring process which implies outsourcing to far away countries, for example to Asia, the risks encountered by doing so involve lack of controlling measures, linguistic, cultural and moral barriers and questionable enforcement of rules and regulations for punishable behavior, such as thefts of intellectual or owner property.

Nearshoring implies outsourcing software development to countries on the same continent, or in the geographical proximity, where language, cultural and communication barriers are limited or non-existent.

By choosing to nearshore in Romania you will not have to deal with significant time zone difference, long travel duration, accessibility – situations in which it might take 1-2 days before you arrive at your outsourcing partner – and cultural barriers will be minimized.

When considering nearshoring rationally you should focus on Eastern Europe, due to almost 1M developers on the labour market and their less competitive salary levels in comparison to Denmark.

But these should not be the only factors with a heavy weight in your decision-making process, Eastern Europe is divided into countries which are or not members of EU or NATO and mostly Slavic speaking Slavic.

Romania is differentiating itself from all the other Ester European countries by having the following set of characteristics:

  • Romanian is a Latin language like Italian, French, Spanish etc.
  • Member of EU and NATO
  • GDPR is enforced by EU in Romania
  • EET, i.e. 1 hour ahead of Denmark
  • 2 hours flying distance from Denmark
  • No visa requirements

The Romanian culture and professional youth are very similar in norms and mentality to the ones from US and Central European countries, adding to it the typical enthusiasm and strong competitive drive that define them. Building on a balanced blend of high-level technical proficiency in leading-edge technologies, with great communication skills, the Romanian IT specialists excel in fulfilling even the most sophisticated demands.

 

TCO – total cost of outsourcing

While considering outsourcing any processes you need to know the benefits of doing so, in terms of cost, value-added and strategic services in order to decide if outsourcing is economical attractive for your company and in order to choose the ideal outsourcing partner – normally TCO terminology refers to the Total Cost of Ownership, but we use it here in slightly different way, we’ll refer to TCO as Total Cost of Outsourcing

Below TCOs factors are put into the context of choosing Romania as your outsourcing destination:

Quantitative facts:

  • The straight forward way of thinking about TCO is to focus on the biggest cost driver; Brut salary/employee. Roughly we are talking about substantial lower brut cost/employee in Romania compared to Denmark, especially when seniority is taken into consideration.
  • The standard weekly working schedule in Romania has 40 hours, leading to a yearly value of 1.840 available working hours, you have approx. 15% more hours/year compared to Denmark’s working year of nearly about 1.600 hours.
  • The Romanian state is supporting the IT industry by giving lower salary tax for software developers, by introducing the 16% unique taxation on profit for companies, price liberalization, open foreign trade regime and encouragement of fair competition in the informational sectors. By choosing Genos as an outsourcing partner the advantage of tax exemption will be passed on to you.

 

Qualitative facts:

  • Pro-active culture oriented on hard work and customer satisfaction.
  • Cost Effective – value for money, not merely price per hour. It’s difficult to estimate but clients conclude in general that the software developers are very skilled and deliver high value for money.
  • Your HR cost in Denmark will decrease by outsourcing 1) the recruitment process of the developers and 2) continuously following up on development plan through-out the calendar year.

 

Overhead facts:

  • Having your staff placed over more location will add a cost overhead, e.g. travel cost and travel time. As time goes by t this overhead/developer will drop and become insignificant.
  • A fee for Genos – that includes the all other local cost related to office space, office furniture’s, cleaning, internet & talent development

At the end of the year you have to take all the facts mentioned above into consideration when calculating the TCO. Genos can help you calculate the TCO and create the Outsourcing Coefficient, OC, which will allow you to compare the cost/hour in Denmark with cost/hour in Romania.

Profit/Month = Monthly Danish Brut Salary – Monthly Romania Brut Salary * OC, the OC should be between 0.9 and 1.15. The more experienced you become with outsourcing the closer you get to OC <=1.

The benefit of using the OC is that it offers a clear perspective over your resources in the moment you are allocating developers for a project within different locations (e.g. also more outsourcing destinations)

Genos has prepared a report that illustrates in detail all the cost benefits of having Romanian employees!

 

Selecting the optimal outsourcing partner

In the end you must take into considerations a lot of relevant topics for your company and the above listed topics hopefully did inspire you.

Genos is offering outsourcing of software development and Service Desk for Danish clients. Genos can offer you the optimal mix of factors mentioned above. Please contact Genos for further information : contact@genosdanmark.eu

About Genos:

Genos is a Danish company having the full control of a software development centre in Bucharest. Genos has many years of experience in offering outsourcing of Dedicated teams and Applications teams for software development and service desk 24/7/365. Genos has all its employees on Romanian labour agreements and no overhead in Denmark. Genos offers Danish management on daily basis in the software development centre in Bucharest