CEO of Ideamotive, a platform that connects tech talent with businesses worldwide. Co-author of the report "The State of CEE IT Outsourcing 2021."
"Balance your strengths and delegate your weaknesses." This tired adage takes on new meaning in the post-pandemic world. As the demand for an agile workforce that is no longer constrained by physical borders grows, the broader benefits of outsourcing become apparent.
Once viewed as a band-aid solution to skills shortages, outsourcing has evolved into a strategic model that enables businesses to achieve the flexibility, scalability, and resilience necessary for sustained growth. Companies seeking these benefits are looking for the most advantageous location to outsource their functions and resources. If they wish to delegate any software-related work, I would advise them to concentrate on Poland.
Outsourcing Is Not Limited To Large Businesses
For an extended period, outsourcing was envisioned as a means of facilitating large-scale supply chain processes. In the context of information technology, Eastman Kodak, by no means an SMB, popularized the concept of delegating strategic functions to an external company. Throughout the 1990s, thousands of corporations followed suit, outsourcing non-core functions to external partners. In 2021, we will inhabit a completely different reality in which outsourcing will no longer be the domain of large corporations.
The adoption of outsourcing partnerships by SMBs began a few years ago. In 2019, when no one knew how the situation would develop in the months ahead, 37% of SMEs had already outsourced IT functions. Covid-19 put a temporary halt to their plans. However, as a new era of change unfolds for business, smaller organizations have an unprecedented opportunity to gain an edge over competitors by enhancing their expertise and nurturing growth through IT outsourcing.
What Are the Reasons for Startups to Consider Outsourcing?
Cost savings no longer define the actual value of outsourcing IT on infrastructure or personnel. It's usually only a matter of time before internal capacities are maxed out in a fast-paced startup environment. Burnout occurs as a result, team productivity suffers, and the backlog grows. By offloading additional workload from their clients, external partners can help avoid this, expedite existing projects, and free up energy for what startups excel at innovating and churning out brilliant ideas.
Moreover, by partnering with external technology providers, startups gain access to global capabilities. The United States is experiencing an unprecedented skills shortage in the information technology field. Certain technologies (for example, Go or Kotlin) are exceedingly difficult or impossible to obtain locally. Outsourcing may be the solution to this problem.
Finally, hyper-growth is every startup's ultimate goal. By enlisting external assistance, startups can meet growing customer demand and demonstrate their worth without rapidly scaling up and depleting funds.
IT Outsourcing for Startups in the United States — Why Poland?
As outsourcing motivations evolve, new destinations emerge that provide startups with value beyond cost-benefit analysis. Among the countries that have excelled at software development and information technology work, one state has consistently grown in importance: Poland. There are several legitimate reasons for this:
- Geographical location. Poland's central position on the European map positions it as a strategic crossroads connecting East and West, always within easy reach. Compared to other traditional outsourcing destinations, Polish cities are six to seven hours ahead of the East Coast, a time difference that is more manageable for American startups.
- Innovation hub. Poland has over 3,000 startups and over 130 venture capital firms. Additionally, it is a European leader in terms of foreign direct investment.
- A sizable pool of IT talent. Poland has the most extensive collection of IT experts in Central and Eastern Europe, with nearly 430,000 IT specialists on the market. With that quantity comes a certain level of quality. Poland has consistently ranked among the top three countries with the best programmers in the world.
- Simplicity of doing business. Poland is ranked 40th in the world for ease of doing business. It can boast a highly competitive and diverse market (ranked 37th in the World Economic Forum's Global Competitiveness Report) and the region's lowest corruption score. Poland was the first member state of the former Soviet bloc to enter a developed market, and it can boast a stable economy that continues to grow.
- Information security. Polish information technology service providers must adhere to stringent cybersecurity and data protection regulations imposed by the country's EU membership. Poland is a low-exposure risk country, according to the Global Cybersecurity Exposure Index. It is ranked 16th in Europe and 22nd worldwide, surpassing China, Israel, and Mexico.
What To Look For When Collaborating With Polish IT Outsourcing Providers
- Collaboration models that are amenable to outsourcing. Consider an outsourcing partner who will enable you to collaborate flexibly. Seek out partners who will fit your company's culture and toolkit, require minimal documentation, and provide transparent financing models (e.g., pay-by-hour instead of pay-for-project).
- Real-time reporting and tracking of progress. Outsourcing will always be about cost optimization and budget management. Choose a partner who can provide you with real-time reporting that is accessible at any time, allowing you to maintain complete control over the project's progress.
- A diverse range of technologies. Because many CEE IT agencies are built around a specific software development technology, ensure that any potential partner provides tech talent aligned with your requirements, not theirs. A broad selection of software development technologies on the partner's part should be a strong indicator of compliance with this requirement.
The Outsourcing Startup's post-pandemic Growth Path
Covid-19 exposed the vulnerabilities of numerous startups, jeopardizing their future and existence. Additionally, it demonstrated the utility of outsourcing and offshoring as strategic tools for increasing resilience and scalability.
In the aftermath of the pandemic, it's time for startups to rethink their approach to outsourcing and embrace it as a new, effective strategy for expanding their businesses. They should consider markets such as Poland as they pursue that strategy, as they may offer them a far more significant advantage than simply doing more or less.
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