IT Outsourcing in Ukraine during the War: FAQ

Dmitry Pomohaibo

Dmitry Pomohaibo

Head of PMO at Andersen

Jul 15, 2022
6 minutes to read
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Ukraine is a remarkable provider of talents for the global IT market. According to the Ukrainian IT Association 2021 report, the number of IT specialists in the country increased from 244,000 to 285,000 in 2021, which means Ukraine can meet the increasing demand for engineers in the global market. The beginning of 2022 became a very turbulent period for Ukraine, but IT professionals there continue to work against all odds. In this article, we will consider the peculiarities of outsourcing in Ukraine during the war and why the country keeps on being competitive in the global IT market.

Ukrainian software development market overview

According to the main Ukrainian professional online community DOU, there are more than 20 IT clusters in the country. The Ukrainian IT Association 2021 report states that nearly 5,000 Ukrainian IT companies are present in the labor market and the country takes 11th place in the IT Competitiveness Ranking by Emerging Europe. In 2022, 12 software development companies from Ukraine were included in the top 100 outsourcing companies in the world. The majority of Ukraine’s IT companies are service-based and focused on such client industries as eCommerce, Banking and Finance, Healthcare, eLearning, and more.

As a rule, IT specialists are located in large Ukrainian cities:

  • Kyiv — the Ukrainian capital — has one of the fastest growing and most vibrant professional communities. Many senior specialists choose Kyiv as a place to live and work.
  • Kharkiv is the second biggest city in the country and has a prominent talent pool due to the fact that three technical universities are located there.
  • Dnipro also has a big IT community and impressively educated specialists as the two other top Ukrainian technical universities are situated there.
  • Odesa is a tourist destination on the Black Sea and one of the fastest growing outsourcing communities. Many international customers are familiar with it.
  • Chernihiv has a well-consolidated IT cluster incorporating both outsourcing and product companies.
  • Lviv is a big industrial hub with many technical specialists and educational IT centers.

The Ukrainian professional community is fast-growing and highly reputed, and its clusters continue to operate even under extreme conditions.

IT Outsourcing in Ukraine during the War

The future of Ukrainian IT outsourcing

As the number of software developers in Ukraine increases, the market evolves. The organizations still maintain a compelling quality-price ratio. The country is trusted by foreign companies. Rakuten, Huawei, Google, and other world market players have R&D centers in Ukraine. In general, the Ukrainian IT sector remains export-oriented and provides sufficient support for the national economy.

In Ukraine, developers are used to working remotely and the trend has only got stronger during the COVID-19 pandemic. That’s why the industry can continue to work in stressful circumstances. Ukrainian specialists are highly motivated and have the necessary experience to meet the needs of customers around the globe.

It is expected that the talent pool of engineers in Ukraine will continue growing while receiving support from the government and recognition from the international community.

Challenges of IT outsourcing in Ukraine

Ukrainian software companies have a reputation worldwide, though some customers may have doubts about collaborating with them. When a country goes through trying times, it affects all areas of life. Let’s consider what kind of challenges could be expected from working with Ukraine during the war.

Slow Internet

In general, Ukrainian specialists are located in safe areas and have reliable Internet access. The connection may slow down due to potential damage to the telecommunication systems or attempts to breach security systems. Nevertheless, your vendor will be able to manage such inconveniences.

Communication disruptions

Ukraine has a convenient time zone for European partners. However, the disruptions of the Internet connection may affect communication. The good news is that the Ukrainian outsourcing companies have a good command of English and a mentality that is similar to their customers’, so they will find a way to stay on the same page as you.

Team composition changes

As a rule, the members of a team and its size are discussed in advance, during the project’s Discovery phase. The top IT outsourcing companies in Ukraine are quite flexible and form dedicated teams according to the objectives of every project. Due to external circumstances, some team members may leave your project during the work process. Luckily, Ukrainian vendors have enough resources to replace the team members in such cases without affecting the project flow.

Top six reasons to outsource your software development to Ukraine

Collaborating with Ukrainian specialists means many advantages for the customers. As well as having bright and talented tech geeks ready to translate your ideas into modern software, there are many more reasons to outsource IT services in Ukraine.

Education

The country has a solid base for technical education and the number of graduate engineers is growing annually. According to the Ukrainian IT Association 2021 report, computer science, computer engineering, and software engineering were the most popular majors. Apart from state educational institutions, there is an extensive network of private and corporate training courses. A well-developed educational system facilitates the preparation of specialists who are highly demanded and competitive in the international market.

Technical expertise

Due to a good educational base, Ukrainian specialists are ready for various challenges at work. Ukrainian outsourcing companies deal with advanced technologies and grow their teams’ expertise. According to the DOU rating, JavaScript, Java, C#, and Python are the most popular programming languages among Ukrainian engineers. You will easily find specialists with a suitable technical stack providing outsourced IT services.

Variety of provided services

The Ukrainian IT Association 2021 report states that half of Ukrainian IT companies are service companies. They specialize in such domains as Gaming, HealthTech, FinTech, Supply Chain, Logistics, Entertainment, and more. Whether you need pre-packaged software or custom software development, you can easily find a partner who specializes in it.

Soft skills

Ukraine is a part of Eastern Europe, which affects the mentality of the Ukrainian professionals and explains its similarities with the mentality of European and US customers. Ukrainians have a similar work ethic. They stick to deadlines, meet their responsibilities, and strive for transparency in communications and work.

Customers

Ukrainian IT outsourcing has become well-known among US and European customers. The Ukrainian companies provide mobile and web development services according to the needs and standards of their clients.

Legal aspects

The Ukrainian government creates a supportive environment for IT companies and nurtures technical specialists throughout their career paths. For example, it offers tax incentives including a simplified single tax model to provide advantageous conditions for IT businesses.

The government has put into practice a special legal framework for the IT industry. The framework is named Diia City and is supposed to provide a special tax regime, more flexible ways of hiring specialists, some legal tools for investment protection, and other incentives to the residents. Such conditions will have a positive effect on the business activities of the IT sector.

To sum up

Ukraine has great potential for the IT outsourcing market. Even in hard times, Ukrainian companies continue their work and follow through on commitments made. If you are interested in cooperating with bright technical specialists, feel free to contact us.

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