Why do US companies outsource IT services to Poland?
What US companies should and shouldn’t expect when they consider outsourcing software development to Poland? ITMAGINATION Board Member and Director of Outsourcing, Paweł Borowski shares his experience.
When I’m in the US talking to clients and prospective clients, most of the time, ITMAGINATION is the first Polish IT services provider that these companies are talking to. I’m often asked to explain how Polish IT companies are different from service providers in Asia or other European countries, and what they should — and shouldn’t — expect when working with Polish IT services providers like ITMAGINATION. Here’s what I tell them …
What shouldn’t you expect from a Polish IT services provider?
Cheap services
I often hear people tell me “hey, you guys aren’t as cheap as I thought you would be.” I don’t argue.
There was a time when Poland was an attractive destination primarily for labor arbitrage reasons. Those days are over. Take a cab ride through any major Polish city today and you’ll see dozens of internationally recognized companies with their names in bright lights atop brand-new class-A office buildings. According to an EY survey of Poland’s attractiveness to foreign investment, as of 2016, Poland had been in the top 3 European destinations countries by FDI job creation for twelve of the previous fourteen years. Interestingly, almost half of the 2016 FDI into Poland came from the UK, the US and Germany. Business is booming in Poland, and a big reason for that is that big companies from world-leading markets are seeing the value of having operations here. That causes immense competition for talent, and thus pushes up the cost of services.
Lift-and-shift services
In the first decade of the 2000s, Poland was a great country to send your remote infrastructure management work or your service desk contracts. Companies would simply take their existing functions (lift) and have them delivered out of Poland (shift). English is pretty much standard in Poland and most young people have studied and/or speak well at least one other foreign language. Combined with the high number of technical graduates and the country’s enthusiasm for IT, this meant that many companies’ first experiences with Polish providers were with services like helpdesks, call centers and remotely looking after servers. That’s no longer the case — the market has matured and, with the advent of cloud infrastructure and customer service by chat and/or bots, Poland doesn’t necessarily make sense as a ‘lift and shift’ destination for your services.
Cultural mismatches
Several years ago, a common stereotype in countries like the US and UK was that, if you outsourced a service to a foreign country, your people and your customers would have to learn to decipher thickly accented English or to undergo some sort of training to work with their “new colleagues in country X”. For many companies, it’s still necessary to invest time and money in preparing your own people for collaboration with off-shore service providers. I’ve heard from companies who proudly tell me that they have specially devised onboarding courses that last several days and are designed to help their existing employees work effectively with their Asia-based off-shore service providers. Somebody has obviously decided that the benefit to the company of having services provided from a distant off-shore location is greater than the cost and time invested in adapting the company for this new arrangement, but this is definitely not a requirement when working with Polish companies. And I often ask myself: In today’s globalized economy, is this really necessary? Isn’t it our role as service providers and aspiring partners to align with the ways of working of our clients?
What should you expect from a Polish IT services supplier?
Some of the best technical minds in the world
It’s widely recognized that Poland has some of the best developers and software engineers in the world. Back in 2016, Hackerrank found Polish developers to be the third-best in the world, behind only China and Russia.
And it’s not just Hackerrank that found Polish talent to be among the best in the world. EY’s study of Poland’s attractiveness to foreign investment found that 57% of companies that had already established operations in Poland stated that the local labor skills level was one of Poland’s top three key assets versus other European countries.
Transparency in terms of profiles and skillsets
Rightly or wrongly, there’s often a fear of the unknown when it comes to outsourcing to a service provider in a different country. Resumés can look great ‘on paper’ and people can come across great on teleconferences, but you often don’t know what the service quality will look like until it’s started (or, in some cases, ‘until it’s too late’). Add to this, the inconvenience of time-zone differences, distance and infrequent opportunities to connect ‘in person’, and it’s easy to lose touch with the person behind a service. The ability to accurately assess tech talent is a recognized problem — Hackerrank research from 2018 found that 65.5% of US Companies find it hard to assess skills before onsite.
Unlike some cultures, where a CV or resumé is an opportunity to sell one’s self (which can lead to problems sorting the wheat from the chaff), Polish resumés tend to be factual and to the point, which makes it easier to ascertain skill levels ahead of any kind of interview or screening process. At ITMAGINATION, engineers and consultants will happily join you on Skype, Slack, Teams or whichever conference service you use to get to know you better before the serious work begins.
A culture of innovation and self-initiative
Poland is fascinating and unique in that it has a history or being restricted economically by communism, and yet that economic oppression seemingly fostered a culture of resourcefulness (i.e. find ways to think differently and outside the system). Now, with the opportunities presented by the country’s accession to the EU and the international experience accumulated by Poles now in their 20s and 30s, the country has risen to prominence as a hotbed for technical innovation. The startup scene is burgeoning (Google Polish startups tech) — some of that’s down to the quality of the coders, some of its due to the international experience amassed through international emigration, and some of it’s down to a history of needing to think differently. Also, tech talent tends to demonstrate a much greater reliance on self-learning (Hackerrank research in 2018 found that 74% of Developer were, at least partially, self-taught) and so when you add that into the unique mix of influences that Poland has, you naturally arrive at a very compelling case for partnership.
Value for money
As I stated, Poland is no longer considered ‘cheap’ but that doesn’t mean that it doesn’t still represent excellent value for money. Wages (and so prices of service) are rising, but when you consider the level of technical expertise, the cultural proximity and quality of service, Poland still represents incredible bang for buck. And business leaders agree — consider the following findings from EY’s survey on Poland’s attractiveness:
- 45% of business cited labor costs as one of Poland’s top three assets versus other European countries.
- More than 70% of survey participants stated that the local labor skills level (81%), potential for productivity increase (78%) and labor costs (74%) are very or fairly attractive.
That’s a compelling combination of benefits for any company that is either interested in investing in Poland or procuring services from the country.
Culturally aligned professionals that serve as an extension of your team
The general standard of English proficiency in Poland fluctuates between high and very high, and is extremely competitive versus other Central Eastern European provides and Asian off-shore destinations. And because, historically, there have been many reasons to leave Poland in search of better fortunes elsewhere, Poles are pretty much everywhere (US, Canada, UK and all over continental Europe). This has fostered a culture of exploration, which was only accentuated by Poland’s accession to the EU in 2004. The result is that many young Poles today have studied or worked abroad and thus understand the international way of doing business. There’s definitely no intensive ‘onboarding’ training you need to take when you decide to work with IT professionals from Poland.
But not all IT service providers in Poland are created equal. What’s different about ITMAGINATION?
A commitment to transparency
Some service providers will want you to sign off on ‘people’ or ‘FTE’s, not projects. You get a dedicated person and — depending on provider — the output might depend from person to person. That can work, but it’s then more difficult to measure the value delivered to your business and the cost of delivering that value. It might also be inefficient — how do you know whether you’re not paying too much for the value you’re getting, and whose responsibility is it fill downtime if there isn’t the volume of tasks or projects you envisaged?
At ITMAGINATION, we apply a Time and Materials model to each and every project that we work on. We provide you with access to ITMAGINATION engineers who are happy (insistent, even) to be on daily standups, calls or videoconferences (Teams, Skype, Slack, Zoom, whatever you choose) and they can work from your Jira backlog or with your code repository so that all aspects of their work are visible to you and their presence feels like a natural extension of your existing team.
A partnership approach — think colleague, not contractor.
At ITMAGINATION, we are happy to fulfil your service needs, but that’s really only our minimum target. We seek to work with you in a partnership model. And that means understanding not only the aims of the project you’re entrusting us with, but also your business challenges and helping you find the right technology solution. We recognize and respect that you understand your business better than anybody else, and we’re keen to augment that vision with the expertise we’ve amassed through our work for clients around the world. At all levels of our organization, we’re keen to establish healthy, satisfying interpersonal contact that results in the delivery of real business value to your organization. Consider us colleagues, not contractors.
The ability to empower the innovators in your company.
ITMAGINATION prides itself on empowering innovators. As a company, we seek to empower the innovator in our workforce, and we seek to achieve the same with you. We’re not here to help you ‘fix’ systems (although we’re pretty good at that too) — we’re here to empower you and your business with technology solutions that deliver real value to your business and help you stand out in the market.
ITMAGINATION and the US market
We have extensive experience working with international clients. More than half of our revenue comes from international clients, one-third of which are US based or have US roots. More than 50 people from our workforce are currently engaged in projects for our US-based clients.
What type of projects has ITMAGINATION worked on for US clients? Here are just two recent examples:
- We’re delivering projects to one of the world’s biggest gaming companies. We’ve been working for more than five years as an extended part of their team and are delivering Java, Angular and Mobile Developer services that are helping the company innovate and deliver a compelling user experience to its end users.
- We’ve been working with a unicorn fintech company for more than a year on the development (.NET core and mobile) of new features for a platform that helps small- and medium-sized business attract funds from investors to support their business growth.
If you’re interested in learning about how ITMAGINATION can empower the innovators or the innovation in your business, let’s talk.
Learn it. Know it. Done.
This article was originally posted on ITMAGINATION website.
