Outsourcing - a process of elimination

There comes a time when you need to scale quickly and you simply don’t have available resources, but with so many options on the market, which way do you go? 

Approximately ten years ago, I was asked to explore global outsourcing options and by a process of elimination I discovered Bulgaria. A lot of people associate Bulgaria with things like communism, mafia, roma communities, farming, poverty and so on and so forth, when in fact it couldn’t be further from actual reality. 

During my research, I looked at India. India is magical place, with a booming tech industry and no shortage of amazing talent, however I couldn’t find solutions for three main challenges; time zone difference, distance from UK, cultural fit. China was in the same category as India - again amazing talent and very advanced business methodologies, but the same three challenges existed. 

My search was then focused on Europe, and was simply divided by east and west. Although Western Europe ticked all the boxes in terms of the challenges I faced outside of Europe, it was simply too expensive. So in the end I looked at various Eastern European states until I eventually narrowed it down to Ukraine and Bulgaria.  

In terms of my above mentioned challenges, Ukraine was fine. There’s also a lot of raw talent, however, what didn’t work for me was the fluctuating currency and the small issue of being outside of the European Union. Since then, we have all witnessed many problems, including horrendous political issues with Russia. 

Sofia, Bulgaria is a cosmopolitan city with a population of approximately 2 million people. The city has become somewhat of a tech-hub with global powerhouses such as HP employing more than 5,000 people locally. Other companies with large R&D offices in Sofia include the likes of SAP, VMWare, IBM, Coca-Cola, Google, SoftwareAG, Interoute, Johnson Controls and Sensata Technologies - all of which contribute to the employment of over 25,000 professionals in Sofia. 

The question is, why are companies choosing Bulgaria? 

The answer is - I don’t know the exact reason why each company decides to outsource or establish their own office in Bulgaria, however, I would imagine the reasons stated below have something to do with it:  

• Cost - research suggests that establishing your own IT development team in Sofia costs approximately 50% less than hiring in London 
• Talent pool - Bulgaria has one of the largest IT professionals per capita in the world, with many universities specialising in mathematics and informatics and IT academies producing high quality talent 
• Language - 85% of students study in English, with 45% of the population speaking at least one foreign language 
• Culture - Bulgarian culture is similar to Western European culture, which is vital for integration 
• Geographical location - the time zone is GMT +2 and a 3 hour flight from UK airports 
• EU member - governed by EU laws 
• Stable currency - Bulgaria is an EU member, but still uses the Bulgarian Lev (BGN), however, it is pegged to the Euro, eliminating fluctuating exchange rates  
• Education - 28% of the population hold university degrees. Sofia alone has 16 universities 
• Internet - internet speeds in Bulgaria are among the fastest in the world. Depending on whatever source you read, you’ll find Bulgaria somewhere in the global top 5