Eastern promise for outsourcing software

IST Results, Belgium
June 8 2004

With numerous European companies caught in a dilemma of growing
technology demands and shrinking IT budgets, outsourcing software
development to Russia and the Newly Independent States (NIS) is an
increasing attractive option.

ADONIS, an IST programme-funded project, is meeting the challenges of
this dilemma by assisting European organisations and businesses to
outsource software development in collaboration with programmers in
Russia and the NIS of the former Soviet Union, primarily Ukraine and
Armenia. This is a win-win endeavour – European companies can offer
their products and services at competitive prices, while opportunity
is created in the participating NIS. Both benefit from rich research
and development collaboration.

The 10-member consortium collaborated to set up and test a pan-European
network of services for outsourcing software tasks. Project partners
have since formed a Brussels-based company, NewAdonis SPRL. Outsourcing
to NIS and Russia holds “very high potential”, according to project
manager and company Director Dr Ruben Vardapetian.

“The results of 16 pilot projects are still being analysed, but the
three countries, including Belarus, have a huge intellectual capital
largely unexploited by Europe and unused by their own countries,”
he explains.

Global software outsourcing is a lucrative, multibillion-euro
business, with the lion’s share going to India. But Russia is among
the rising stars with an annual turnover of €400 million. NIS and
Russia offer rapidly growing economies and large, highly educated
populations willing to work for lower wages than their European
counterparts. Outsourcing is not an entirely new phenomenon in the
region. Vardapetian notes that Armenia was producing both hardware
and software for the Soviet military since the 1950s.

What is new, however, is the growing recognition of companies in
Europe and across the Atlantic of its benefits. Outsourcing is becoming
synonymous with outsmarting, offering companies the ability to reduce
costs, focus on core business activities, compensate for lack of IT
staff and access specialised expertise at a highly competitive price.

Contact: Dr Ruben Vardapetian NewAdonis SPRL Chaussée de Wavre 352
1040 Brussels Belgium Tel: +32 -2-2306916 Email: info@newadonis.com

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