IT Outsourcing in Ukraine – 4 main trends
January 23, 2014
US$ 1,1bn IT outsourcing market volume, 1,000 outsourcing companies, 25,000 IT specialists…this is all about Ukraine!
According to the “Exploring Ukraine. IT Outsourcing Industry” research IT outsourcing industry in Ukraine grows rapidly and stable enough. Ukraine has made a great progress since the year 2000 and became a leader in the software development market. Moreover, it is the largest player in the software development space in Central and Eastern Europe. Large pool of IT workforce, goal-oriented management, reasonable cost, reliable infrastructure and high quality services create attractive conditions for doing business in Ukraine.
IT sphere is sophisticated one, so it’s not so easy to track all the changes even within one country. As a result the information from different resources may vary and to give a holistic overview of IT situation becomes a complicated task. But we tried and all our efforts are here for you to see and comment. Kindly asking to share your thoughts.
What makes Ukraine such a recognizable outsourcing destination in the world? Why people prefer setting up their business there?
There are some remarkable reasons:
1. Top notch IT specialists
Ukraine is most famous for its strong scientific and educational base. There are 861 Higher educational institutions. Every year 16,000 IT specialists graduating from Ukrainian universities. The country has talented IT workforce with great potential that shows 20% growth annually.
2. Result-oriented approach
Not only strong technical knowledge, qualification and experience make Ukrainian programmers of great demand. The ability of developers to suggest bright ideas and to find the way out inspires companies to set up their Research & Development offices (R&D) in Ukraine. It is easy to cooperate as developers are involved in the client’s project completely. They are goal-oriented and interested in producing results and what is more, high quality software.
3. Software quality
This very advantage is one of the main reasons for outsourcing to Ukraine. Highly skilled and talented IT pool allows to take advantage of it and to get qualitative software and IT services.
4. Significant cost savings
Reasonable prices are the crucial factor that makes Ukraine extremely attractive IT destination. As the industry penetrates into different regions of the country, the prices may differ even within Ukraine. On average the companies may save up to 50%-60% compared to their in-house IT spending.
5. Favorable geographical location
Outsourcing itself doesn’t presuppose working with developers directly. But sometimes face-to-face communication is extremely important. The extended infrastructure in the country makes travelling to Ukraine easy and convenient.
Ukraine is rightfully considered one of the best location for outsourcing. And here is the record of achievements to prove it.
Central and Eastern Europe IT Outsourcing Review
According to the Central and Eastern European Outsourcing Association (CEEOA) research Ukraine was ranked the first among 16 countries of the CEE region. See the “Central and Eastern Europe IT Outsourcing Review”.
TOP 30 Outsourcing Destinations
The world’s leading research organization, Gartner, lists the top 30 outsourcing destinations annually. Ukraine joined it in 2007. See Gartner’s 30 Leading Locations for Offshore Services.
TOP 50 countries for locating outsourcing services – Global Services Location Index
The top 50 countries worldwide for locating outsourcing activities include Ukraine. The report is made by global management consulting firm A.T. Kearney. See the Global Services Location Index reports.
Ranked 49th in the World’s TOP 100 Countries
Ukraine was ranked 49th in the ranking of the world’s top 100 countries. See World’s TOP 100 Countries.
Outsourcing Destination of the Year
In 2011 Ukraine was recognized as the top destination for IT outsourcing and won the nomination “Outsourcing Destination of the Year”. See more info on EOA Summit website.
City Lviv included to TOP 30 emerging destinations for outsourcing
One of the largest cities of Ukraine, Lviv, was included to TOP 30 emerging destinations for outsourcing in the report “Exploring Global Frontiers” by KPMG.
TOP 50 Emerging Global Outsourcing Destinations
Ukraine’s capital Kyiv was ranked among TOP 50 Emerging Global Outsourcing Destinations by Global Services and Tholons in 2009. For more details see the TOP 50 Emerging Global Outsourcing Cities listing.
TOP 20 Leading Countries in the area of IT Outsourcing and High-Tech Services
Every year Global Services in association with NeoAdvisory compile the Global Services 100 list. In 2010 Ukraine was 11th among 20 leading countries. The list can be found here: http://www.globalservicesmedia.com.
TOP 10 countries with the most certified IT professionals
In 2009 Ukraine was ranked 8th in Gaming Industry’s TOP 12 European Countries by The Global Gaming Industry Network.
Below are the main trends of the Ukrainian software development and IT Outsourcing Industry:
- Potential. More and more companies all over the world open their R&D offices in Ukraine. The main reason is a great potential of the country and rapidly developing industry that tends to grow 20%-25% a year.
- Talented people. Dedicated teams or so called outstaffing are being demanded during the last decade. Ukraine is famous for its highly specialized developers. That is why companies strive to find talented professionals with deep knowledge in Ukraine.
- Big projects, big customers. There were times when Ukrainian clients were represented primary by small- and mid-sized companies. But now such global vendors as Google, Microsoft, Huawei, foreign banks like Deutsche Bank, UBS, Barclays Capital and other global companies as IBM, Nokia, Sony, Jaguar rely on Ukrainian software development providers.
- Consolidation tendency. New companies emerge every year and those that already exist become larger and extend their offices.
To sum up the information IT Outsourcing industry in Ukraine gathers pace. According to the experts’ forecast, the Ukrainian market will grow tenfold. The volume of software development and IT outsourcing services may reach US$10 billion by 2020. At this date creative and highly qualified developers stand high favor. Moreover, Ukraine as an IT outsourcing destination is already recognized globally.