ST. PETERSBURG, Russia—The Russian software development industry is working to move away from traditional outsourcing models, relying more on becoming partners with overseas companies and touting talent and innovation over cheap labor.
According to customers, analysts and managers at development companies at the Russoft conference here June 21-22, todays Russian development companies would rather work with customers to create something new than simply churn out program code in the commodity market.
According to Valentin Makarov, president of the Russoft Association, Russian service providers are concerned about more than just the specifications of the program a company is creating.
"When you come to Russia, the question is, What is your problem?" Makarov said, adding that this approach is different from that used in most of the rest of the world, where programmers simply code to a specification and provide no input into whether the specification makes sense. "You create a joint team," he said.
The Russian companies also are trying to be more proactive in getting that message out. For example, Russoft, which represents Russian companies, is planning a U.S. tour next year, something its done in the past.
Throughout the conference, the story was the same. Russian development companies want to be viewed differently from competitors in India, China or South America. Instead of being thought of as outsourcing providers, the Russians want stable, long-term relationships that span the course of years. "I call it team-sourcing," Makarov said. "You have a team dedicated to solving just your problems."
Makarov said that because the Russian software industry has low turnover, Russian companies can offer teams that stay together for a decade or longer, giving them more depth of knowledge than whats normally found in more traditional outsourcing.
Another differentiator is that Russian development companies can help define a customers problem and a solution. "Most U.S. companies dont know what theyre looking for, so its hard to find what they cant define," said Dean Davison, an analyst with NeoIT. Davison said many companies are still trying to figure out what they need. "Theyre doing exploratory work," he said.
Most U.S. companies start out with outsourcing thats aimed almost exclusively at reducing cost, Davison said, something that helps them learn about how outsourcing works and that can lead to more effective relationships with offshore partnerships. However, he said most U.S. companies dont choose where their work is being done. In some cases, they might not even know.
"There are many times the American client chooses a service provider," Davison said. "They may be in Russia, China, India or all of the above."
For many companies that provide such services, the decision as to where to send work greatly depends on what needs to be done rather than simply being a search for the lowest price. "The cultural alignment to the West is key to us and our clients," said Alex Adamopoulos, general manager and senior vice president of Exigen Services, in Boston. "Theres a strong collaborative effort as part of the [Russian] culture. This [country] is very results-oriented rather than task-oriented. That also leads to a more successful engagement. These are people who solve business problems."
Adamopoulos said the ability to be integral to the solution process is bringing bigger and bigger enterprises to companies that provide the services of Russian developers.
"One of the trends were seeing is larger enterprise clients that have traditionally sourced to India are coming here because they want business problems solved and they realize that theres a higher level of specialization here," he said.
Adamopoulos said a critical point is that the Russian workers wont follow a specification blindly. "Theres a willingness to push back in a good way," he said. "They challenge what they see, they ask questions to understand, they say no more than yes and theyre very creative thinkers."
He said hes found that Russian developers work well with the Agile Alliance methodology, which lends itself to effective rapid development. He also said that the Russian developers are particularly effective on jobs where their cultural sensitivity plays a major role. "In areas like social networking sites and [user interfaces], there is more creativity on the customer-facing side. That leads to a better deliverable," Adamopoulos said.
While Exigen Services is based in the United States, Russian and Eastern European service providers are finding the same trends. Andriy Cherevko, marketing department manager for SoftServe, in Lviv, Ukraine, said the cultural alignment and the ability to solve problems have led to a series of successes for his company in dealing with U.S. customers.
"We have a good working relationship with our partners in the U.S.," Cherevko said. "In most cases, its like a partnership. We try to build long-term relationships with our clients. Our objective is to solve business problems for our clients. The main result of our corporation is the business objective for our clients."
Cherevko said one notable success stemming from this partnership and cultural connection was a real estate application that enables agents to virtually fly over a property theyre interested in, inspect it from all angles and even buy it online.
He said the technology was incorporated into a larger application from Real Estate on the World Wide Web, or RE3W, a real estate software company in Santa Ana, Calif.
"Russian developers are creative. They have pretty strong skills in architecture, design and testing," said Dmitry Loschinin, president of Luxsoft, in Moscow. "They have very strong engineering skills, software skills and electronic skills."
Loschinin said this combination of skills means that Russian engineers also understand how hardware and software work together, leading to much of Russian work being used in embedded systems.
Loschinin said companies looking for commodity programming for well-defined tasks might do better in India or elsewhere. But, he said, "for new development, or systems where you need to put a lot of things in place before you start coding, Russian talents can contribute to success."