16 Jan 2014 Betting Business Interactive: The Growing Advantages of Outsourcing by Ciklum Today’s fast paced Internet world is heavily influencing the online gambling and sports betting industry. It is characterized by increasing demand for heavy investments in an ever-changing technological advancements, specifically software development. Furthermore, the advent of mobile technologies and the understanding of the shift to mobile devices by industry’s end-users, dictates an ever-increasing investment in mobile software development, in addition to web software development which continues to grow, in order to maintain and possibly increase market position. In this rapidly evolving online and mobile world, some major challenges hinder the success and growth of vendors, especially small-to-medium sized companies. The main challenges faced by leading vendors are: • Ability to recruit and maintain top talent – in the USA, UK, Scandinavia and Israel good software developers are a scarce resource with demand constantly outpacing supply. The ability of vendors, especially small-to-medium ones, to get the right talent is diminishing in recent years as Supply/Demand ratio is worsen and bigger firms are “sucking” all the talent. • Keeping costs under control – the above is resulting in an increased costs sometimes out of the control for companies. Nowadays, in many cases, the innovation and creativity falls victim to lack of development resources – to a point of missing time-to-market, or simply being unable to execute those great innovations. • Maintaining quality and productivity of software development teams – especially in a market that is moving so fast, with a need for constant improvement and a minimal tolerance for errors and failures. ‘Nearshoring’ as a Solution Well, one obvious answer is going off-shore to India or China for resources. Indeed, in the early days of outsourcing for technology jobs, there were many attempts to do it in India and later on in China. The results were mixed: while some tech centers focusing on customer support succeeded and still exist and while very large corporations built successful outsourcing centers with thousands of people – attempts by small-to-medium size companies to outsource core software development have largely failed. Consequently, in recent years we see successful implementation of nearshoring in Eastern Europe, mostly in Ukraine, Belarus, and Russia. The main reasons are: • Well-established mathematical and technological education in those countries. • An inherent cultural alignment of the younger tech-savvy generation to the hi-tech industry in Western Europe and the USA. • Sophisticated service providers (mostly owned by Western companies) offer Eastern-European software developers in a cost-effective, low-risk, and highly productive model. ‘Software Development Cloud’ Nowadays it is possible to outsource your very own “in-house R&D team” (i.e. your Own Development Center) to a nearshore location, having virtually the same qualities as recruiting locally, while getting some major benefits such as: • Approximately half the cost of local hiring. • A much faster and easier hiring process – typically half the time or less. • Off-loading all overhead (office space, IT, HR, operations, etc.) to a service provider who specializes in it and enjoys the benefits of large scale operation – so you can focus on your core business and leave the rest for others. • And for European vendors – having these resources on the same/close time zone and with a very short (and low cost) flights. In a way you are enjoying a true “Software Development Cloud” just around the corner. Thus in addition to the actual software residing in a cloud, you can get some of your resources managed in a “cloud” to enjoy similar benefits from increased scale, reduced costs, and the operational speciality of the “SW Development cloud” service provider. Author: Eran Cohen is the Israel Country Manager at Ciklum, who serves many successful online gambling vendors (e.g. PlayTech) with Own Development Centers in Ukraine and Belarus. To get in contact click here. This article is sourced from Betting Business Interactive, page 58.