Key Highlights of IT Outsource in Ukraine
Considering outsourcing your software development to Ukraine?
Here’s some food for thought:
- Current workforce is estimated at nearly 90.000 IT Professionals and over 4000 software companies;
- 75% of software development companies focus on outsourcing specifically;
- The annual revenue exceeds 2.5 billion USD;
- The annual revenue growth is 35%;
- Ukraine is currently ranked as #1 “Outsourcing Destination of The Year” in Central and Eastern Europe and world’s #5th biggest highly tailored IT Outsourcing by European Outsourcing Excellence Awards.
- And it’s still far away from revealing its full potential and capacity.
In this post we at Romexsoft decide to list up the key memes and plausible reasons to team up with Ukrainian IT crowd.
A huge and highly skilled pool of talent, price & value balance, good education program, convenient location and cultural proximity and prevailing startup spirit are just a few of them.
Here are the rest:
Why Ukraine is a High-ranking Destination For Offshore Development
According the A.T. Kearney report on 2016 Global Services Location Index Ukraine has significantly improved its image as an offshore destination gaining 17 positions up in the GSLI and is now ranking as #24, despite the current geopolitical situation.
As mentioned in the report, the increase in political risk is partly offset by the government’s implementation of reforms, which boosted the country’s competitiveness.The government seems well aware of the importance of the IT sector for the country’s modernization and global integration.
Among the other accolades Ukrainian outsourcing market has received, the following are worth mentioning:
- Ukraine is among the Top-10 Countries with the most certified IT Professionals;
- Since 2007 Ukraine has been repeatedly named as one of the Top 30 Leading Locations for Outsourcing according to the Gartner Group Research;
- Currently the country is ranked fourth for software export volume worldwide, according to the same research;
- In 2011 Ukraine won the “Outsourcing destination of the year” award granted by European Outsourcing Excellence Awards;
- 3rd on the list of Top 50 most Certified IT Professionals.
Apart from hosting over 4000 software outsourcing companies, Ukraine also powers up 100+ R&D centers of different international companies, including Cisco, Dell, Microsoft, Bloomberg, Ericsson, Boeing, Oracle, Siemens. According to the World Bank, around 2,120.6 people per million are currently engaged in R&D industry. This includes not only knowledge discovery about the products and processes, but new products and services development as well. Many Ukrainian software companies understand how important constant development is and have analytic departments set up to monitor the market and be the first to assess the best innovations and get them implemented within clients’ projects.
Apart from continuous improvement of the outsourcing services Ukraine’s startup scene is booming. In recent years there have been quite aa a few of spectacular inventions, for example Petcube, Looksery (recently acquired by Snapchat,), Viewdle software (acquired by Google), Ecoisme, Concepter, Kwambio, UGears to name a few.
Ukrainian Freelance Guru’s Dominate The Market
According to Upwork Online Work Report Global and Elance Online Employment Report Ukrainian developers are among the Top 10 Earners on the platforms with a healthy 10-25% growth rate. According to FT Ukrainian freelancers have earned $61m in 2014 through Upwork, the 4th largest freelance platform in the world.
Fun fact: around 16,000 Ukrainian freelancers had registered with Upwork in Q1, 2015 alone.
Reliable Intellectual Protection & General Legal Protection
Ukrainian Intellectual Protection (IP) Laws include copyright protection for computer programs and databases. Similarly to the global practice, copyrights can be transferred and licensed, while the author keeps the moral rights (for example – to be recognized as the author etc.).
However, special attention should be given to ownership and the transfer of IP rights, where IP is created under the employment agreement. According to the Civil Code, property rights are jointly owned by the employee and employer, unless it is otherwise specifies in the agreement. Therefore you should make sure that copyright ownership along with an authorship fee (for transfer of the ownership rights of the developer to the customer) is carefully specified and the description of property rights is present in the contract.
It is a common practise in Romexsoft to sign NDA & Service Agreement with the partners, which guarantee restricted access to sensitive information by third parties along with the provisions for the transfer of IP rights to the end-customer.
If you want to dive deeper into Ukrainian IP Regulations and structuring, we would recommend to take a look at the following materials: DLA Paper IP Outsourcing in Ukraine.
The Huge Software Talent Pool
Currently Ukrainian IT crowd is estimated at 90.000 professionals and is expected to double to over 200.000 in the next 5 years, which makes it the largest pool of talents in Europe. IT Professionals are among the top earners in Ukraine, which stimulates the interest among younger generation and leads to choosing engineering as a profession.
Currently over 80% of software developers are aged under 30. But, young age does not account for low experience. Ukrainian software developers are extremely skilled due to high level of theoretical education provided by the universities, extensive self-education and further career development programs introduced by employers.
Strong Technical Education and English Language Proficiency
Nearly 20.000 students graduate with computer science or related degrees per year. An outstanding number of private institutions, scientific schools and organisations provide the possibility for further specialized education seizing the present and growing need to secure up-to-date competence – for example Lviv IT School and training centers and academies organised by major IT outsourcing companies like Softserve Academy, GL Base Camp, ELEKS.
Ukraine is ranking as #1 based on the number of engineering graduates entering the work market in CEE, according to UNCTAD, and number 4 globally. Over 75% of IT Professionals have a BA degrees from prestigious universities and 6% have received a Master or PhD.
Moreover, a significant number of software developers have international education and/or work experience and continue IT self-education online on international (Coursera, Edx, Udemy) and Ukrainian (i.e Prometheus) platforms. According to the explorer traffic statistics published by the Open Syllabus Project Ukrainians are currently ranked 2nd for attendance.
According to Вrainbench estimates there are around 25.000 certified IT specialists in Ukraine and the country holds the 4-th place for the most certified IT professionals in the world. Ukraine has certification centers available for SCRUM, Java, Oracle, Cisco and Microsoft to name a few.
Ukraine made to the top five countries worldwide for 27 technical skill categories (out of a possible 30) in which Вrainbench offers certification. This includes C++, PHP, Software Testing (Quality Assurance Testing), .NET Framework, MS SQL Server 2000 programming, among others.
Brainbench also offers testing in business process skills and soft skills, where Ukraine is also figuring prominently: Project Management, Business Communications, Managing People, Coaching and Time Management. The report can be ordered via Brainbench.
As to the language proficiency: around 80% of the software professionals have intermediate and upper intermediate level of English along with proficiency in a third language e.g. German, French, Polish or Russian.
IT outsourcing services are mostly provided in English, and less commonly in German and Russian.
When it comes to programming languages a Ukrainian IT specialist generally knows at least three of them: Java, C/C++ and C#/.NET and has expertise in mobile technologies (iOS, Android) as well.
Geographical and Cultural Proximity
Top Ukrainian outsourcing cities like Lviv, Kyiv and Odessa have convenient location and can be easily reached by plane from EU (1-2 hour flight) and USA (around 8 hours from the East Coast). The time difference (UTC +2) makes project management and aligning working schedules easy: working hours overlap with many North Coast cities in US, Canada and there’s only 1 hour difference with EU-based companies.
Ukraine has a west-oriented mentality, which can be easily explained through the country’s location, its business values and cultural heritage. The alignment of both values & mentality makes performance management easier for companies that outsource to Ukraine. Ukrainian software development companies strive to deliver the best results by providing high level of services and implementing latest agile methodologies, securing the flexibility of the development process and project success in the long run.
Visa? No visa!
An obvious benefit of travelling to Ukraine is that as a US or EU citizen you don’t need a visa in case you are planning to stay for less than 90 days within a 6 month period (180-days). Should you exceed this limitation you can get a work permit along with a temporary residence permit.
Ukrainian IT Outsourcers provide excellent technical expertise and innovation along with competitive pricing compared to software development companies in Canada, USA and EU.
It’s worth mentioning that the growing technical expertise and demand leads to gradual increase in labour costs and overall industry growth. Yet, skilled technical employees rates are by far more reasonable than in EU and US. Outsourcing reduces development cost, providing you with a clear control over the budget along with access to world class talents that may not be available for you onshore.
Salary report source: Dou.ua
Ukraine is a thriving offshore destination, which has an established IT infrastructure, a healthy growing and skilled talent pool; western mentality and business approach, allowing you to secure quality of product and staying in control while saving up to 60% of the costs compared to in-house software development in US or EU.