Former Soviet Union has skills to provide future offshore outsourcing

While users appreciate the cost savings of moving software development to India, the Aberdeen Group has reported that the former...

While users appreciate the cost savings of moving software development to India, the Aberdeen Group have reported that the former Soviet Union is a good bet for any future offshore work.

But the region's software development skills, which can be accessed at a cost well below US rates, is also appealing to managers of non-IT firms.

"Many [Russian developers] are ex-Soviet military technologists and programmers, and because of that, they have had classical training in software development," said Craig Maccubbin, vice-president of technology at online travel service

"They are so disciplined that there is almost a level of inflexibility to their approach." But, he added, that level of discipline also "helps the process of working with them immensely".

Aberdeen Group also found that IT suppliers account for about three-quarters of all the offshore work done in Russia, said analyst Stephen Lane.

IT companies are setting up development centres in Russia to help build a market there and to use Russian talent for high-end development.

"What they do have is a culture that is focused on problem-solving and focused on using technology in an innovative fashion," Lane said. But "there is not a Russian company out there that can compete with an Indian company in terms of scale or scope," he added.

Maccubbin uses Epam Systems, a services provider that has operations in Moscow and Minsk. He said he relies on the development workers in Minsk to build and maintain most of the website's back-end functions.

But the customer-facing aspects, such as graphic design work and other "defining characteristics", are handled in the US.

"You can't outsource that to anybody," he said. Developers in the US charge about $38 (£24) per hour, while the Russian hourly rate is $20 less.

Bob Pryor, who heads Cap Gemini Ernst & Young's outsourcing services in New York, agreed that Russia's workers have advanced technological skills. However, he said, the country will remain a small part of the offshore outsourcing market because its government is not developing the industry.

"I don't see any significant investment for new skills and capabilities," he said.

Marc Herbet, executive vice-president of Sierra Atlantic, an application management company which runs an offshore centre in India, said Russia may well take off as an offshore outsourcing centre if Europeans begin embracing offshore work, particularly because of the proximity.

Patrick Thibodeau writes for Computerworld

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