I noticed this post highlighting some key points from a report “Outsourcing Trends in Central and Eastern Europe: The Second Wave.”  The document was produced by Technology Forecasters, Inc.  I’m relying on the summary post because I can’t afford to buy the actual report.  Although the discussion concentrates on manufacturing, I believe that many of the key points also apply to software outsourcing.

With all of the focus on India and, more recently, China, I suspect that many western companies have overlooked the opportunity to tap the very skilled resources in Romania.  According to the report:

“[Romania’s] labor costs are not as low as China’s, but for European markets Romania is nearly the same as China on a total landed cost basis.”

The report goes on to assert that:

“Romania has the lowest labor costs of all European Union members.”

We’ve had the pleasure of working closely with a ITC Networks one of the country’s top software businesses.  Assuming that ITC is a fair representative, Romania has a pool of very strong software engineers and project managers that are fluent in written and spoken English.  These folks routinely perform excellent work.  Unfortunately, it seems that the size of the available resource base is somewhat constrained, as the report notes:

“[Romania] has a skilled labor shortage”

I actually am going somewhere with all of this…  I’m becoming convinced that the shortest path to really successful China software outsourcing will be through building a truly multinational organization that plays to the breadth of the resource pool in China as well as the depth of the available talent in countries like Romania.  The Indian companies have attempted to put this together, but they’ve met with limited success for well understood reasons.  I’ve covered combinations of Chinese teams with U.S. based front-ends in previous posts.  This is another very intriguing slant on the issue.

Technorati Tags:  China, Romania, China Outsourcing