There is an abundance of skilful, low-cost, fl exible resources in Northwest Russia that could easily be utilised more by Finnish companies in software production. From the Finnish perspective, cheap labour and high-quality expertise is an attractive combination. The goal of the CYMBOL Software project was to improve the competitiveness of companies in the software industry in Northern Finland. This would be achieved by both lowering costs and by freeing capacity from routine work for product development and business development by creating permanent capabilities for companies to engage in subcontracting in the software industry in Russia. The intention of the project was, therefore, to create a permanent foundation for Finnish companies to obtain high-quality, cost-effective and flexible software production resources from Russia in the future. The project was to assess Finnish companies’ needs and also their attitudes towards subcontracting in the software industry. Conversely, the project was also to study the subcontractors and expertise in the software industry in the Republic of Karelia and St. Petersburg areas and assess the needs and expectations of the Russian parties regarding subcontracting and the operational model criteria. In addition, the project was to map the support processes, bureaucracy and legal issues necessary for implementing software subcontracting as well as carry out a risk analysis of software subcontracting from Russia. These were to be used as a foundation for creating and piloting an operational model for subcontracting activities. A permanent effect could be achieved by turning the expertise created by the project into branded business activity. On one hand the project was seen as a way to offer Russian counterparts access to a strong market area through low costs and on the other hand it was seen as opening a gateway for Finnish companies to a rapidly growing economic area of 30 million residents just a short distance away. Achievements: During the project, the participating companies were convinced to at least consider subcontracting from Russia. During the project, it became clear that lowering costs is only one part of improving competitiveness. Product development capacity and special expertise in situations requiring problem-solving abilities is, at minimum, an equally important factor. One company began implementing a subcontracting project during the initiative and two others remained at the specifi cation phase. The permanent conditions for subcontracting in the software industry were implemented during the project by establishing a company to handle operations between the Finnish and Russian businesses. Interest in Russia is increasing and companies in both Russia and Finland have directly expressed the need for a company of this nature. In particular, companies appear to want a supportive resource during the initial phase of subcontracting, when time is taken up with creating definitions, seeking and evaluating partners, and creating requests for and evaluating quotations.