Outsourcing Software Development to the Czech Republic: The Ultimate Guide

As we all know, spending cuts are a game rule during a recession. And the first thing companies do is downsize their workforce, lower salaries, and decrease production. But to survive, they must, on the contrary, speed up development and, far more significantly, accelerate time to value. In this light, IT outsourcing in low-cost countries has become a more viable strategy than freezing activity until better times.

But where to outsource better? Much has been said about IT outsourcing in Europe. It can be a highly beneficial option, saving time and money and offering numerous advantages for any business. However, don’t forget that Europe is composed of different countries with unique lifestyles, cultural differences, and business practices.

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We have already explored some of these differences from the perspective of IT outsourcing in our articles about Bulgaria, Poland, Romania, and of course, Ukraine. Now it is time to examine the Czech Republic. 

Top 5 Destinations for IT Outsourcing

Currently, the world offers more than one profitable outsourcing destination: Eastern and Western Europe, Asia, and South America, and so on. We have selected the most popular and proven countries of these destinations for our overview – Argentina, India, Ukraine, Poland, and the Czech Republic. Let’s take a look.

Argentina

Argentina has experienced significant growth in software development outsourcing over the last decade, with many renowned international companies, including IBM, Hewlett Packard, Motorola, Accenture, SAP, Capgemini, McAfee, and Oracle, choosing to set up operations in the country. The increased demand for skilled developers has led to a more diverse educational offering and more job opportunities in the country.

Argentines are highly skilled in software development, with expertise particularly in computer programming (80%) and mobile device development (89%), as per the Coursera Global Skills Index 2021. Moreover, approximately 30% of developers in Argentina are currently dedicated to app development. Argentina also ranks third in Latin America in data science and is recognized as a competitive country with strengths in data analysis (100%) and statistical programming (91%). 

Outsourcing software development to Argentina gives businesses access to current and future talent. According to the Argentine Chamber of the Software Industry (CESSI), there are currently around 114,000 developers working in the country. However, CESSI estimates that by 2030, the number of such specialists will increase to 500,000 people.

India

Over the last 30 years, the Indian IT industry has burgeoned into a $149 billion industry by capitalizing on a straightforward proposition: global companies save on costs by outsourcing routine IT tasks to low-cost engineers in India. Indeed, Indian developers’ hourly rates are among the most competitive worldwide, ranging from as low as $25-40 per hour. That makes India an ideal option for businesses seeking to outsource straightforward tasks, where the service’s price is the primary consideration.

But be careful with Indian outsourcing services if the project you want to delegate is complex and requires great coding skills. While the IT sector is steadily approaching a workforce of 5 million people, India needs more efforts to educate them in the appropriate fields. It results in poor-quality services that self-taught vendors provide. Additionally, the Indian software market also faces challenges with data protection and privacy laws.

The significant time zone difference (often over 10 hours) can make team coordination challenging, reducing efficiency. Additionally, geographical distance can make travel to India costly and time-consuming. 

Finally, cultural and language barriers may also pose challenges. On the one hand, India is the world’s second-largest English-speaking country, making communicating with Western clients easier. On the other hand, Indian English has a strong local accent, which potentially causes communication barriers.

Ukraine

Despite the ongoing war, Ukraine remains a resilient software development hub in Eastern Europe and provides economic support to the country in harsh realities.

Recent statistics indicate that the Ukrainian IT industry has achieved remarkable growth in exporting services, doubling its capacity in the last three years. The sector proved strong during 2022, reaching a record $7.3 billion in revenue, up from $6.8 billion the previous year.

Ukraine also boasts an impressive talent pool of 240,000 certified programmers that is constantly increasing. That is largely due to the extensive network of technical universities nationwide, which graduate 20 000 students annually.

Ukrainians are known for their high expertise and skills, reflected in their consistent ranking in various lists of the best programmers in the world. According to the latest SkillValue quiz, Ukraine ranks 4th, and the average success rate for testing Ukrainian programmers on this platform is 58.17%. HackerRank also ranked the country 11th in the world regarding technical skills, surpassing traditional coding giants like India and the US. 

Poland

Poland is another prominent country in the CEE region for outsourcing. The country ranks 3rd among the most skilled programmers, with an impressive 98%, according to HackerRank.  The Polish IT outsourcing ecosystem unites about 700 business service centers in Warsaw, Lodz, Krakow, and Wroclaw.

Polish software engineers possess expertise in various emerging technologies, including virtual reality, e-commerce, mobile, and video game development. They also exhibit proficiency in major programming languages like JavaScript. Global companies can hire developers with diverse technical skills such as TypeScript, PHP, Kotlin, and C++/C#.  In addition to their IT skills, Polish professionals have other advantages, such as a good command of English.

A vast talent pool of 401,000 experienced professionals makes Poland a prime location for research and development centers for international enterprises. Poland’s IT industry is attracting the attention of global tech giants such as Google, IBM, Samsung, Siemens, Intel, and Ericsson. 

This list is by no means exhaustive. But since our article is about the Czech Republic, let’s look at it more in the context of outsourcing.

The Czech Republic

Among the most budding destinations in central Europe is the Czech Republic. With its highly educated workforce, favorable business environment, and proximity to Western Europe, the Czech Republic outsourcing offers a compelling value proposition for companies looking to develop software. Let’s find out why. 

Software Development Outsourcing to Czech Republic: Overview

The Czech Republic is undoubtedly one of the world’s top software development destinations. The country is a hub for 7 700 IT firms, many of which are located in four major IT hubs: Prague, Olomouc, Brno, and Saarbrücken. Until 2021, Prague was the top location for hiring developers in the Czech Republic, but Olomouc has since replaced it. 

After joining the EU in 2004, the Czech Republic emerged as the most economically developed country among the former Eastern bloc states. Its stable legal system and efficient government earned the Czech Republic an A1 rating from Moody’s. Additionally, with corporate taxes set at a modest 19%, investment incentives, and grants from the EU, Czechia provides further support for growth in its local IT sector. 

That is why the headquarters of leading companies, including Google, Microsoft, Oracle, IBM, RedHat, Microsoft, and NetSuite, are located here. It is reinforced by a rich tradition of education focused on technology and a history of successful startups like Avast and JetBrains. Furthermore, language barriers are not a significant concern as locals are proficient in at least one global language. 

As an EU member, the Czech Republic has implemented data protection laws that include the EU Data Protection Directive requirements. Information security is good, with a reasonable depth of professionals trained at a technical level.

Five Reasons why the Czech Republic is Perfect for IT Outsourcing 

The Czech Republic is among the leaders in the list of development outsourcing destinations. The reasons are listed below:

Software development expertise

Due to the high level of IT proficiency in the Czech Republic, Czech developers achieved 9th place in the World Programming Olympiad. The country boasts over 15,000 STEM graduates annually in Brno alone, ensuring the availability of experienced and qualified professionals in every field. IT services in the Czech Republic include the design and development of web and mobile applications, information systems, and other custom software.

Convenient time zone

The time zone of the Czech Republic (GMT +2) offers convenient overlap for conducting business. Additionally, it is only a few hours behind the Asian region and about 5 hours ahead of most US states. Therefore, Czech companies share business hours with many enterprises worldwide.

A large talent pool

The Czech Republic has a large talent pool of 200k IT professionals, with new graduates entering the workforce yearly. According to the Techloop recruiting platform, the most in-demand programming languages in the Czech Republic are Java, JavaScript, PHP, and C#.

English proficiency

The Czech Republic boasts a high level of English proficiency, ranking 27th among European countries. It ensures effective communication with developers and minimizes the risk of misunderstandings.

Competitive rates

By outsourcing software development to the Czech Republic, you can significantly reduce the cost of your project. The average Czech Republic software developer’s salary is around $3153,30, which is half as much as what an average developer in the US ($7,900) or the UK ($6,500) earns. 

Disadvantages of Outsourcing Development to the Czech Republic

Although outsourcing software development to the Czech Republic has various benefits, it is crucial to acknowledge the possible downsides. These are a few some to keep in mind:

• Language Barrier: Even though English is widely spoken in the Czech Republic, explaining complex technical concepts can still be difficult. 
• Cultural differences: The Czech Republic may have unique cultural and business practices that differ from other countries. As a result, it’s crucial to establish clear communication channels and expectations early on to prevent misunderstandings.
• Distance: If you’re located in a different country or time zone than the Czech Republic, it can be challenging to coordinate with your outsourcing team. That could lead to communication issues and slower project delivery.
• Limited availability of specialized skills: While the Czech Republic has a large pool of IT professionals, finding individuals with technical skills or experience in niche technologies may take a lot of work. That could limit the scope of your project or require additional resources to be dedicated to training new team members.
• Time and cost overruns: While outsourcing to the Czech Republic may be more cost-effective than hiring an in-house team, unexpected delays or changes in project scope can lead to cost and time overruns. Establishing clear project timelines and budgets is important to mitigate these risks.

Czech Republic vs. Ukraine: Where to Outsource Your Next Project?

While both countries have their strengths and weaknesses, here are five reasons why outsourcing to Ukraine may be the better choice for your next project:

• Ukraine is generally a more cost-effective option for IT outsourcing than the Czech Republic. The cost of living and labor costs are lower in Ukraine, which means businesses can get high-quality IT services at a lower price.
• Ukraine has the largest talent pool of over 240,000 IT professionals and a rapidly growing tech sector. That means businesses can access a wide range of expertise and easily find professionals with the specific skills needed for their projects. 
• Ukraine is known for its expertise in cybersecurity, with several companies offering specialized cybersecurity services. It is particularly crucial for businesses that must safeguard sensitive data and systems from cyber threats.
• Ukraine is in the same time zone as most of Europe, which makes communication and collaboration with outsourced teams convenient for businesses. It ensures that companies can maintain real-time communication with their outsourced teams.
• Despite offering lower costs, Ukraine is well-known for providing high-quality IT services, especially in the field of software development. Many Ukrainian IT companies have won international awards for their services and have a reputation for delivering outstanding software products.

In conclusion, while the Czech Republic has its strengths as a destination for IT outsourcing, Ukraine offers a more cost-effective option, a large talent pool, expertise in cybersecurity, and high-quality IT services. 

Wrapping Up

No matter where you are, finding the perfect team to build your product might take plenty of effort. But, by partnering with a reputable software development company like Relevant, you significantly speed up this process.

If your priority is high quality, a proactive approach, a long-term partnership, and the best price-to-earnings ratio, you’ve landed in the perfect spot. At Relevant Software, we provide software development services that help accelerate growth and enhance the competitive edge of Fortune 500 companies and SMBs. Our portfolio includes more than 200 successfully implemented projects in such industries as fintech, healthcare, IoT, and others.

With delivery centers in Poland and Ukraine, we possess the necessary resources to cater to the requirements of businesses of all sizes, regardless of location. Our clients can choose from various engagement models that align with their project needs, including dedicated teams, offshore development centers, or team augmentation.

Would you like to witness it personally? Overcome hesitation and contact us right now.

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