In this section we'll present real-world nearshore case-studies highlighting successful outsourcing experiences of European and North American companies with East European service providers.
1. Berlingske Media: How We Set Up IT Department in Ukraine
Jesper Bagger, Project Director at Berlingske Media, shares his company’s outsourcing experiences at the ITB Conference “Off-Shore – How easy can it be?”
Berlingske, the oldest Danish media house with a 262-years history, moved a substantial part of its software development to Kiev, Ukraine, in 2010. The key factor driving a corporate decision to outsource nearshore was the search for savings. In Ukraine, an IT developer costs about half of the Danish one and the price difference between the Danish and Ukrainian IT consultants is even greater.
According to Jesper Bagger, Berlingske’s Project Director, phasing out 5 to 6 IT consultants in Copenhagen allowed them to hire around 25 software developers in Kiev.
Last year Jesper was tasked to establish an IT branch abroad for the purpose of developing websites and CMS for the regional and local newspapers as well as mobile apps for the Danish Media House and Polish, Dutch and Norwegian newspapers owned by Berlingske’s parent company – Mecom. The required IT department was to be paid off within 12 months.
Although the nearshore IT department is yet far from being a mature organization, it has already delivered a lot of positive results, says Jesper Bagger. Among them are 100 new apps, re-launched and upgraded websites such as B.dk and Dinby, integrated e-commerce engines etc. The IT department in Kiev currently counts about 35 specialists.
Why Nearshoring?
So, why did Berligske actually choose Ukraine and not India or Latin America for its external development? Jesper says there were several decisive factors. One of them was that when you choose to establish and manage an outsourced team, you should be ready to move quickly to the location. Flights from Copenhagen to Kiev are much shorter and cheaper than to the offshore locations. Another reason was that the company wanted to keep its outsourced operations close to Denmark. And overall, the mentality of the Ukrainians, especially those residing in Kiev, is almost the same as in Denmark.
Eventually, it was chosen to partner with the Danish company Ciklum that assisted Berlingske to set up IT operations in Ukraine.
Jesper is convinced that it takes more than mere savings to make any outsourcing adventure a huge success. It is essential to establish an effective cross-border communication and full ownership of the outsourced product.
Berlingske ensured close connections with its Kiev-based team via massive travelling and visible presence on the spot. Before any deadlines, the entire Ukrainian team relocates from Kiev to Copenhagen for several weeks. In the regular work, there are weekly video conferences between Kiev and Copenhagen that allow Ukrainian and Danish teams to constantly see and interact with one another even being thousands of miles away.
“It is also about something as basic as letting people get drunk together, letting them celebrate deadlines and successes together. It helps to break down the barrier between ‘them’ and ‘us’,” says Jesper Bagger.
Due to a two-way knowledge transfer, Berlingske got a chance to significantly increase its project management quality and overall project’s success.
Original article by Kasper Villum Jensen was written for ComOn.Dk and can be accessed at http://www.comon.dk/nyheder/berlingske-sadan-bankede-vi-en-it-afdeling-i-ukraine-op-pa-lyntid-1.459731.html
