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Frequently Asked Questions

Q: What is IT outsourcing?

A: Definition: Outsourcing of IT processes - this may range from infrastructure, to software development, maintenance and support.

The concept of taking internal company functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, or free company resources for other activities. Outsourcing was first done in the data-processing industry and has spread to areas, including telemessaging and call centers. Outsourcing is the wave of the future.

Q: Why Outsource to Russia?

A: Highly Educated Workforce and a Large Resource Pool
Math and science are synonymous with the national mentality. In fact, 50 percent of the student population major in technology, science or engineering, which is far more than in China, India, Japan and the U.S. Furthermore, Russian students spend between five and six years in university before entering the workforce with a B.Sc. degree. Right now more than 1.3 million degreed professionals are circulating in the economy, with an estimated 2.35 million more in the university system.

Is this sustainable? Global research firm IDC thinks so. They have predicted a 40 percent growth in the software developer population alone between 2005 and 2008, which makes Russia’s developer population one of the fastest growing in the world. Head to head population figures underscore which country is preparing for long-term success in the industry.

If numbers, percents and studies seem too academic, the actions of global technology leaders speak directly to the strength of the Russian talent pool. Across the region, independent research and development centers owned by Sun Microsystems, Intel, Alcatel, IBM, HP, and many others have been springing up.

Low Attrition, Cultural Similarity
A large labor force is just part of the ‘human’ story of Russian outsourcing. Low staff attrition, and alignment with European and North American business cultures are the other half.

Just eight percent attrition across the Russian market is a remarkable benchmark and a testament to the region’s resilience to the labor migration common to Asia, India and many other outsourcing destinations. By focusing on complex, high-end application development work, Russian outsourcing providers put high priority on retaining staff. Specialized, market-focused developers are the backbone of the industry and respected by their employers who work hard to keep them ‘in the fold’.

Work ethic, mentality and an understanding of customers’ approach to business can be as important to a successful partnership as a developer’s technical skill. Russia can claim parallels in each of these cultural factors to North American and European customers.

Communications: Time zones, solid infrastructure
Successful outsourcing requires top-line communications between geographically dispersed teams. This means both from the comfort of customers’ offices and ease of travel.

Glance at a map and the proximity to any European country is apparent. Each of the major technology centers in Russia (like Moscow or St Petersburg) is just 2-3 hours flight from any major European capital, making nearshoring very attractive. A bit longer for travels from North America, yet far more friendly than traveling to India or China.

A reliable power grid and a mature communications infrastructure are both mandatory business tools – and a non-issue in Russia. The country’s systems are top-grade and kept in good repair.

Bottom-line Economics
Skills, experience and stability are the most important criteria for choosing an outsourcing provider; however, cost savings are typically the gating factor. It is important to realize, however, that real cost analysis goes far beyond comparing the resource cost per hour. Clients of the Russian firms report that the Russians’ creativity, autonomy, and problem-solving oriented thinking translate into higher "uptime", projects moving faster, and shorter time to market on projects, which in turn means lower cost per line of working software than that of the competing geographies.