PO Trip Adviser: Russia
While working on a outsourcing destinations chapter for my book I realized that tips for travel in many countries could be helpful to those not accustomed to traveling to third world countries and other outsourcing destinations. Of course there are plenty of books, websites and forums covering travel to any place in the world. I am not planning on competing with them in any way, my goal is create a simple list of items to keep in mind when visiting a vendor far away from your home becomes necessary. I am planning to put a couple posts covering few countries that I have a fortune to spend time in and let me start with the one that I lived in for 30 years…
So, here we go – a few tips on traveling to Russia – one of the top Eastern European outsourcing destinations:
- Visas are required and getting one can be a tricky process. Make sure you allocate at least one month for processing the paperwork.
- Unfortunately terrorism and street crime are a part of daily lives in many parts of the Russia. Still, on a relative scale, Russia, and especially the tier-one cities, are safe and great places to visit.
- Shop around for tickets. If you know any Russians who stay connected to their motherland, ask them for help. There are many Russian travel agencies that can find great deals on tickets.
- Staying in nice hotels can be price prohibitive, particularly in tier-one cities. Ask your vendor for help with travel arrangements.
- You can rent a car and drive in Russia. Be prepared for a manual stick shift and very aggressive driving styles. You may face very serious traffic and won’t see any signs in English, so finding your way can be a challenge.
- Ask your vendor to arrange sightseeing for you. Due to large distances and complexities in city navigation, you would be much better off on a guided tour. And I assure you Russian cities and their suburbs have a lot to offer a curious visitor such as architecture, landscape and even shopping.
- Ask your vendor for recommendation when it comes to restaurants. Nowadays, especially the big cities, offer a great variety of styles and cuisines but the cost can be astronomical. Just like many other destinations, not only drink bottled water but also brush your teeth with it.
- Prices are generally quoted in rubles. Currency can be freely converted at banks, hotels or kiosks specifically for tourists.
If you have any suggestions, ideas or tips on travel to Russia please comment or email me, I’ll be happy to update the list.
Oh, Those Russians
Am I dating myself? “Oh, those Russians” was the last line of “Rasputin”, ’78 hit by Germany-based pop and disco group Boney M. Well, of course that’s not what this post is about. A few days ago I talked with an old friend of mine once a VP of engineering for a s/w startup in the Bay Area and now a successful entrepreneur and owner of a small offshore outsourcing firm with a development center in St. Petersburg, Russia.
We started to chat about two sides of outsourcing, challenges of trying to do things right and make money in the process, and then found ourselves locking horns on a portrait of a Russian developer. Both of us are originally from Russia even though from two “competing” cities. Both of us have tons of experience working with outsourcing teams from all over the world. Both have been working with Russian developers for years. Yet with my friends’ past years of provider experience and my experience being mostly on consumer side we found ourselves on different sides of the barricade. Since we’ve known each other for years we could also take the gloves off and beat each other to pulp. At the same time there were not much difference in opinions and we could easily shift the sides. Well, I guess you would have to take my word for it. So, what makes Russians special, different, easy / hard work with? What to expect when you find yourself outsourcing with Russians?
oDesk Freelancer Stats and Mashups
A few posts ago I mentioned a report covering some insights on international freelancing community that was made available by oDesk. Sine then I had a chance to take a deeper look at oConomy and found information there even more interesting and insightful. oDesk did a great job on presenting freelancer statistics in chats and Google mashups.
Of course when it comes to picking an offshoring destination freelancing data needs to be taken with a grain of salt. In particular a freelancer’s rate is a product of many criteria and only portion of those are locale-dependant. Freelancing through aggregators / monster boards like oDesk is still in its early stage, over time the rates and other stats will have a greater degree of correlation to local salaries, availability, etc. However, even today, these figures provide an interesting reference in terms of understanding the local dynamics. Let’s take for example geo distribution for Russia vs. population and rank for top 10 cities on oDesk list:
| oDesk Rank | City | Number of Providers | Average Charge Rate | Average User Score | Population | Rank |
| 1 | Moscow | 486 | $19.39 | 4.21 | 10,470,318 | 1 |
| 2 | Omsk | 444 | $16.12 | 4.28 | 1,134,016 | 7 |
| 3 | Taganrog | 207 | $15.82 | 4.28 | 281,947 | 66 |
| 4 | Saint Petersburg | 200 | $17.76 | 3.69 | 4,661,219 | 2 |
| 5 | Novosibirsk | 121 | $16.75 | 4.34 | 1,425,508 | 3 |
| 6 | Tomsk | 98 | $15.83 | 3.99 | 487,838 | 34 |
| 7 | Rostov-on-Don | 69 | $15.28 | 4.15 | 1,068,267 | 10 |
| 8 | Nizhniy Novgorod | 44 | $15.11 | 3.28 | 1,311,252 | 4 |
| 9 | Smolensk | 34 | $14.24 | 3.54 | 325,137 | 56 |
| 10 | Irkutsk | 32 | $24.13 | 4.62 | 593,604 | 24 |
As you can see the figures are somewhat counterintuitive. Take for example Taganrog a small city in the same region as Rostov-on-Don which is roughly 3 times bigger and considerably richer as well, yet freelancer community is 6 times the size of Rostov-on-Don’s. Taganrog is even ahead of Russia’s second largest city Saint Petersburg. Most likely these figures confirm that freelancing community’s embrace of oDesk services is in its humble beginnings and that more business will flow to companies like oDesk, Guru, eLance and others.
I hope oDesk keeps oConomy live and updated with the latest info, it would be also great to see their competitors to follow in suite.
Offshore Destinations: Russia
I was born in Moscow, USSR and the word “Russia” in my mind associates with a large empire of 15 republics. Things since than have changed dramatically and referring to some of the parts of ex-USSR as Russia is not just politically incorrect. Yet you are likely to hear about Russian outsourcing even if the ODC is located in Minsk, or Kiev. As a matter of fact in many respects outsourcing landscape of Byelorussia, Ukraine, and Russia has a lot in common. More so, large outsourcing organization such as ePAM, Luxsoft, and others have offices in these countries. Most of other countries of ex Soviet Union do not play significant role in offshore market, some due to low density of IT talent, some due to high cost. While offering in these countries exist, and you may find great providers in Estonia, Moldova, and others, in terms of outsourcing statistics these countries would be a rounding error. With that in mind let me cover some Pros and Cons of doing business in Russia.
- Infrastructure. IT infrastructure in large cities of Russia is very good; smaller, second tier cities lag behind, the difference if pretty dramatic. Generally today you will find sufficient network bandwidth, stable connectivity, and solid pool of Sys Admin talent that would allow you stay in touch with your ODC. The cost of it will be not inconsequential though and needs to be taken into consideration. A very important aspect of infrastructure which you need to asses is vendor facilities – it is difficult to find well equipped offices with quality server rooms, etc. that is especially serious for companies with offices in second tier cities. In my view Pros here outweigh the Cons.
- Operating Environment. Running offshore engagement with Russian ODC will offer many operating challenges even if you stick to tier one cities (for the purpose of this discussion that’s Moscow, St. Petersburg, Kiev, Minsk). Getting to these cities is fairly easy, they offer great selection of hotels, solid municipal infrastructure, and … mind boggling prices. As I heard Moscow has been recently awarded with a title of the most expensive city in the world with St. Petersburg following it closely. Second tier cities are substantially cheaper but you get what you paid for in terms of quality of hotels, food, transportation, etc. Another issue to be aware of is high crime rate (accidental traveler be aware!) and very high rate of corruption. Corruption could become a very serious obstacle for models involving ownership of the resources such as BOT. With caveats considered I would still put Operating Environment as a Pro of doing business with Russia.
- Skills Availability. That is in my view is one of the weakest traits of the region. First at a very high level, Russia produces IT resources at a fraction of speed of the countries such as China and India. This problem is exacerbated by fairly consistent internal demand for IT resources and high geographical dispersal of the talent pool. In large degree Russia talent pull is already exhausted. Pretty much everyone who is interested in working in offshore organization is already working for some client, often for several, as many of talented engineers work several jobs, moonlight or find other ways of get themselves reasonably compensated. Finding software aces is challenging even in second-tier cities, in the first tier cities it’s practically impossible.
- Cultural Compatibility. My experience in that arena has been surprising to say the least. I left Russia in ‘91 as an accomplished technology professional with almost 10 years of experience under my belt. I had not expected to have any problems in dealing with companies in Russia and yet I found it easier to work with companies in India instead. Some of my greatest pains came from several areas of communication / work related behaviors.
- Customer is always right… Maybe, but not in Russia. As a matter of fact the vendor seems to always know what I want better than I do.
- Being “Politically Correct” is not a Russian way. However, while I prefer straight forward communications I do not enjoy when my vendor is rude to me or more so to some of my employees.
- Work ethics. Very sensitive topic, I have seen many great, hardworking developers in Russia, but unfortunately they seem to be outnumbered by short-timers with “get money and run” attitude.
- There is one interesting aspect of Russia’s culture which while “positive” contributes to the difference – attitude towards education. It is amazing how many highly educated people you find among Russian developers and even QA engineers. I am not talking BS, I mean Ph.D. and above. While by all means commendable quality the negative impact of it is actually multifold: theoretical approach to problem solving, abandoning career for the sake of education, investment in education at cost of work skills, etc.
- English Skills. In my opinion English skills of Russian outsourcing community are at the level you would expect them to be with a typical bell curve distribution and the median being at acceptable level. Chances are you won’t have problems understanding developers and would be able to carry on a rich conversation with account managers and other client facing resources.
- Rates. Rates of Russian development workforce vary greatly depending on location. Rates in T1 cities are very high, often making Russian outsourcing to be cost prohibitive. To deal with this issue many T1-city based vendors diversify by opening locations in small cities. Rates for smaller city are as the standards of living in those cities – they fall off the cliff as soon as you move 100 miles outside of the tier one city boundaries. However resulting rates continue to stay on a high side comparing to India’s.
- Resource Turnover. Turnover tends to be on a low side comparing to India especially in a T2-T3 cities. The trend is however discouraging – according to what I hear from my network the turnover rate has bean steadily growing correlating to growing demand and increase in expected standard of living.
Let me close this post on a positive note covering one of the most important Pros of Russian outsourcing community – its Technical Capability. For many reasons Russia IT community in many cities in Russia offers above average technical capacity, innovation and creativity. That is particular notable for boutique vendors from St Petersburg, Moscow, Kiev, Minsk and Novosibirsk as well in the top echelone resources from lagre Russian outsourcers.
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The Pragmatic Outsourcer series consists of 5 volumes, each covering a different phase of the outsourcing process. Volume 1: Making the Decision is available today for your free download. Volumes 2 through 5 will be available during 2010.
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