Ukraine is a reliable player on the offshore IT outsourcing market
Information technologies are no longer limited to the tech industries - over the past decade, IT have managed to infiltrate almost every industry in the world: from retail and pharmacy to fishery and agriculture.
Every business today has to use IT tools if it aims to bring people to its service or product. A website, its mobile version, a smartphone app, and a certain level of process automation are all must-haves in this day and age.
And since IT developments show no signs of slowing down any time soon, the role of computer technology in the world’s economy is only going to grow even more.
The IT outsourcing isn’t just a tool to save money anymore. It brings skilled
people and a level of expertise which most companies don’t have among their
But what if a company has been working in a particular industry for a long time and has its core expertise in something other than tech? Or what if it’s creating a piece of technology and does not have a complete set of specialists to do the job? In such cases, these companies usually opt for outsourcing.
Outsourcing involves the contracting out of a business process or a specific portion of work to another party. It sometimes means transferring employees and assets from one firm to another.
It’s not about money
Companies used to outsource to reduce costs - such as peripheral or non-core business expenses, high taxes, high energy costs, excessive government regulation, production.
With many individuals telecommuting from home, the companies who choose outsourcing do not need to allocate additional funds for setting up or renting office space and paying salaries to a management team.
Read about experience with a dedicated development team from Ukraine
The digital workforce of the Eastern European countries and countries like India and China are also less expensive. They are only paid a fraction of what would be the minimum wage in more developed countries like the US or the UK.
But IT outsourcing isn’t just a tool to save money anymore. It brings skilled people and a level of expertise which most companies don’t have among their regular staff.
Due to a large list of advantages, Ukraine has been repeatedly ranked among
the top outsourcing destinations over the past five years.
Entrusting your software development project to some unknown guys on the other side of the world, however, can be risky, regardless of how brilliant they are.
Spotlight on Eastern Europe
An increasing number of businesses are considering Eastern Europe, China and India as primary destinations for outsourcing their software development. And today the Eastern European countries and particularly Ukraine are getting more popular.
Due to a large list of advantages, Ukraine has been repeatedly ranked among the top outsourcing destinations over the past five years.
Read interesting facts about outsourcing to Ukraine
The country has over a thousand IT outsourcing vendors, which offer virtually any kind of software service. This includes web and mobile design and development, software development, testing, dedicated development team building, research and development services, and IT consulting.
An extensive piece of research by PwC done in partnership with the European Business Association shows that in 2016 the amount of human capital in the Ukrainian IT industry increased by almost 20 percent. In fact, the sector has doubled in size since 2011. It currently counts more than 90,000 tech specialists, according to a recent Ukraine Digital News report.
And it’s not just about the quantity of IT people.
Just recently, the International Association of Outsourcing Professionals (IAOP) named 13 software developers - either subsidiaries of international tech companies that have R&D offices in Ukraine, or purely Ukrainian IT firms - in the annual list of the world’s hundred best IT outsourcers.
The Global Services Location Index shows Ukraine’s fascinating ascent in the world of outsourcers over the past two years - the country jumped from 41st place to 24th in the global outsourcing ranking.
The Ukrainian software industry was valued at $2.5 billion in 2015. The wealth of the country’s tech scene has also fueled explosive growth among the local startup community.
DepositPhotos, TemplateMonster, GitLab, Viewdle (reportedly acquired by Google for $30-45 million), PetCube, Mobalytics, Preply, Attendify, Jooble, MacPaw, Grammarly, Looksery (acquired by Snapchat for $150 million), and Readdle are just a few of the famous startups that have Ukrainian roots.
Amazing talent in a safe environment
Given the fact that Ukraine, according to Bloomberg, has one of the 50 most innovative economies in the world , it should come as no surprise that the country is home to more than 100 research and development centers for global tech giants, including Ericsson, Siemens, Oracle, Ubisoft and many others.
Add to this the kindred spirit of Ukrainians: the work ethic characterizing the Ukrainian IT industry is very similar to that of Western countries. Ukrainian tech workers are open to new challenges and ready to overcome obstacles. They usually get personally involved in the projects, trying to do their best to facilitate success.
The icing on the cake is that 80 percent of Ukraine’s tech workers report having an intermediate or higher level of English proficiency.
One of the few concerns that can influence the decision to outsource to
Ukraine is safety and reliability.
One of the few concerns that can influence the decision to outsource to Ukraine is safety - both physical and legal.
In spite of the news about the Ukrainian crisis, most of the nation is stable and safe: the military conflict is essentially limited to the eastern part of the country and has developed in just two Ukrainian oblasts out of 24. Kiev, Odessa, Kharkiv, Lviv and Dnipro serve as outsourcing hubs and they are far from danger.
Some companies may also worry about legal issues that concern the protection of intellectual property, but the law is working here the way it does in most of the developed countries.
Read about outsourcing and software security
Outsourcing to Ukraine is commonly concluded through a third party - a company that hires IT professionals and manages all the legal issues for them. Such a hierarchy has both jural and financial advantages.
And clients, of course, obtain all the intellectual rights of the developed product. The parties just have to discuss it beforehand.
In order to make sure the intellectual property will be safely conveyed, the client has to write a precise definition of the product, the service they’re going to purchase, and set down a list of all the rights a developer will part with as soon as the work has been executed. Then, the transfer of rights and a copyright fee have to be committed to paper. The progressive Ukrainian laws allow everything to be invoiced via email and easily paid online from any place on Earth over the internet.
These steps are quite standard for most developed countries when dealing with intellectual property rights. By establishing these rights in advance, there is simply no risk of the developers using, say, a part of the code for their next project, or claiming somewhere down the line that a client has inappropriately used their groundwork.
There is one more vital step, though. Developers should always sign a non-disclosure agreement (NDA) for each separate project. This will secure the data a client gives them to build on.
So all things considered, is it safe to outsource to Ukraine? Well, it seems it is not just safe, but even smart to do so, because the Ukrainian IT industry has a great deal to offer.
Written by Denys Krasnikov