From machine learning and artificial intelligence to the internet of things, the pace of change in technology is both exhilarating and daunting, particularly for CTOs and IT leaders who are tasked with steering their organisation’s boundless digital transformation efforts.
While new technologies usually aim to make life easier, CTOs face significant challenges in getting their organisations to utilise emerging innovations, be it enticing qualified talent, or adopting it in a cost-efficient manner.
Regarding software development, the digital skills crisis is probably one of the most frustrating roadblocks for IT leaders, for, without capable team members, organisations are unable to move forward.
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This reality perhaps best defines the contrasting allure of software development outsourcing, as this gives organisations the ability to escape the monotonous cycle of employee recruitment and retention by way of opening up external pools of talent.
Curbing the skills gap
According to recent research, the skills shortage in the UK costs businesses £1.5 billion a year in recruitment, temporary staffing, inflated salaries and additional training.
Speaking realistically, it’s hard to see things getting better in the short-term, this means CTOs need to figure out alternative routes to innovate in a state of flux.
This is an angle I spoke about at length with Jaroslaw Czaja, CEO of Future Processing, during my trip to Gliwice in Poland, last month.
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Future Processing is making the most out of Poland’s growing tech economy. Plucking talent from local universities, they have acquired roughly 900 employees, making them one of the country’s largest software development outsourcing companies.
According to Czaja, an outsourcing organisation like his one can appeal more to graduates due to their ability to offer broader opportunities in multiple fields.
He explained: “Employees here get to constantly develop their skills, and follow new trends, without getting pigeonholed in one area. As a result, they enjoy working with us more.”
This is perhaps more apparent when you take into the account the sheer diversity of their projects, whether its building infrastructure for smart cities or developing software for space initiatives.
Czaja added: “People here get to stay agile and open to new opportunities. Therefore, our employee retention is high, in a competitive market like this, that says a lot.”
According to their website, they have one of the lowest employee attrition rates – 9.7% total attrition against the average 12.5% in the Polish IT sector.
Poland’s tech hub
For many, Poland may not be the first place that comes to mind when thinking about tech hubs and software development. However, since joining the market economy in 1989, they have had a number of significant success stories, expanding their appeal towards startups and entrepreneurs.
A report from StartUp Poland recently found in its poll of over 2,400 startups, 39% were software development enterprises.
Poland’s position as a prime outsourcing destination has been solidified by the combination of its high number of tech graduates and cheap labour cost.
Their membership of the EU and their resulting obligation to its laws, particularly copyright laws, furthers their allure in comparison to other common outsourcing destinations like India.
For Czaja, Future Processing’s location in Gliwice is an additional bonus, because of its close proximity to Krakow Airport, which enables quick flights to and from major European cities, like London, Dublin, Paris and Stockholm.
Changing expectations in software development outsourcing
Just because their business model appeals to graduates and their location is beneficial, it would be naive to assume that the outsourcing sector is immune to all the challenges typical to working within an industry that is continually evolving.
Software development has changed a lot in previous years, therefore, so has outsourcing.
For Czaja, cutting costs is no longer the primary appeal of their services.
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He said: “The most significant change I can see, is how we’ve moved from offering purely technical expertise.
“Originally, when we were working with companies, we would engage solely with the IT departments.”
“These days we take on much more responsibility, often having to engage with clients on a business level, nor would it be unusual to speak with various department heads.”
“We’ve invested in business analysis and account management skills, to try and understand the non-technical challenges and trends a client may be facing.”
For Czaja, successful companies outsource IT projects to achieve business agility; this is why he thinks successful companies look at outsourcing as a long-term investment with long-term payback.
Following on from Czaja’s point, it is fair to say that a new model of outsourcing has emerged. Rather than just delegating specific tasks, outsourcing is about providing a partnership that works with its client towards common goals.
The expectation to tackle more subtle and strategic tasks, such as research and development, requires a new type of relationship.
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According to Czaja: “This is evident even on a contractual level, it’s not about just saying we will write the code, it’s about saying we will provide a solution based on the understanding of the client’s challenge.”
This ultimately means that companies using an outsourcing firm should expect a lot more contact. This has motivated Czaja to focus on the cultural aspect of his company. In this day and age, it is common for firms like Future Processing to sit in on their client’s staff meetings, not only to keep in line with the strategy but to contribute and share experiences.
This perhaps explains why outsourcing firms from Eastern Europe are quick to highlight both, the logistic upside of their locations and their shared culture. Being within Europe, these companies also share many of the same public holidays.
To some, it may seem trivial, but time zones play a critical role in a partnership for the apparent reason that there is more time to communicate.