8 Reasons to Choose Ukraine for Software Development Outsourcing

IT services outsourcing is a popular way of creating tech products. In recent years, when business needs ultra-fast digitization, many companies decide to “delegate” software development or its components to a vendor to keep up with progress in the tech market and save money.

Ukraine is one of the leading regions for IT outsourcing. In this article, we will discuss which popular startups were created by Ukrainian developers, what the country can offer investors, and why it is worth outsourcing software development here.

The Benefits of IT Outsourcing for Business

The global business process outsourcing market was valued at $245.9 billion in 2021. Experts claim that from 2022 to 2030, it will grow by 9.1% annually. The main reason is the need to increase business flexibility and efficiency while simultaneously reducing operating costs.

IT outsourcing is no exception. This approach is

• Saving money. Small and medium-sized businesses often don’t have the funds to find and hire an entire development team. Full-time employees are significant expenses not only for salary but also for insurance, taxes, etc. Outsourcing helps hire a specialist for specific needs, with particular experience, and at low rates.
• Easier risk management. If you hire employees, you risk not getting the desired result and losing time and money due to unsuccessful adaptation or other reasons. Outsourcing is primarily about contracts with precise requirements and compensation in case of non-compliance.
• Time-saving. You get a full-fledged team of specialists who will complete the assigned tasks with clearly defined deadlines. In the case of in-house development, it’s quite time-consuming because you need to look for the right engineers, adjust business processes, choose optimal approaches, etc. You can also choose the desired level of control and free up some time for other tasks instead of managing the whole team of different people.

Ukrainian IT Industry Today

Describing the IT industry of Ukraine, it is worth highlighting several important facts:

• It is a popular country for outsourcing, and its exports of computer services are increasing by an average of 27% annually.
• Over the past four years, the financial income of the industry has doubled, and the trend has practically not changed even due to the russian invasion.
• The primary consumers of Ukrainian IT services are the USA (40% of exports) and Great Britain (10%).
• According to Open Data Maturity 2021, Ukraine has significant achievements in Open Data services and ranks 6th in Europe.

The top five technologies include JavaScript, Java, C#, Python, and PHP, and the number of mobile app development specialists is also rising. A typical Ukrainian engineer has a university degree (often technical) and two years of work experience.

8 Reasons to Choose Outsourcing to Ukraine

Let’s talk about why it is worth outsourcing software development to Ukrainian companies.

#1. Profound Development Background and High-Quality Service

According to the report of the IT Ukraine Association, over 20,000 tech students graduate in Ukraine each year. Ukraine provides high-quality and affordable technical education, which in turn provides a vast pool of IT talent. Ukrainian engineers specialize in various technologies (Java, Flutter, C#, PHP, .NET, etc.), in data science, artificial intelligence, and machine learning.

#2. Strong Tech and Startup Community

Ukraine is home to powerful and bright startups such as Grammarly, People.ai, MacPaw, etc. They emerged thanks to a solid community supporting ambitious projects and creating a pleasant development ecosystem. Formal and informal IT events are held in Ukraine, and such organizations as the IT Cluster and the Ukrainian IT Association are successfully functioning.

#3. 5000+ Software Development Companies

There were more than 18 000 legal entities related to the IT industry in the Unified State Register of Enterprises and Organizations of Ukraine at the end of 2021. Of course, the actual numbers are smaller, but experts estimate around 5000 IT companies on the market.

#4. International R&D Centers

Ukraine has become home to many international R&D centers. For example, Oracle has offices in five cities: Kyiv, Lviv, Kharkiv, Dnipro, and Odesa. After the acquisition of Mellanox in 2020, Nvidia opened its research office in Kyiv.

The ABBYY Eastern European head office and the first Ukrainian Ring R&D center are also located here. Ring opened another representative office in Lviv in 2018. Assassin’s Creed fans have a chance to get a job in Kyiv or Odesa UbiSoft studios. And it’s just a part of the list of R&D centers that work successfully in Ukraine.

#5. English Proficiency

According to the Ukraine IT Report 2021, 80% of Ukrainian IT specialists know English at an intermediate and higher level. This makes communication much easier and helps understand the client’s requirements perfectly.

#6. Convenient Time Zone

Ukraine’s time zone is about an hour ahead of European countries and 7 hours ahead of the US East Coast. This is quite a small difference for offshoring, especially since Ukrainian companies have an effective communication system with clients, taking into account the time difference.

#7. Favorable Business Climate

Ukraine offers a loyal tax system, new opportunities for foreign investors and a unique project of digitalization of tax relations called Diia City. This allows exports of the IT industry to grow by $853 million, or more than 20% per year.

#8. Intellectual Property Security

Intellectual property is respected in Ukraine, so IT companies treat this issue very strictly. For example, all reliable IT service providers sign a non-disclosure agreement from the beginning of cooperation. And it really protects your ideas and creations.

IT Outsourcing in Ukraine and Other European Countries

How to Outsource Properly and Avoid Hidden Costs

IT outsourcing has its own pitfalls, so it is crucial to build a relationship with a partner properly and outsource projects effectively.

• Choose the right outsourcing partner. A reliable provider is a big part of success. View testimonials from previous clients and employees, conduct reputational research, and assess the company’s outsourcing approach.
• Check the portfolio. It demonstrates the skills and experience of the engineers, as well as whether the team will be able to work effectively with your specific business needs.
• Discuss the cooperation details and pricing model. Discuss all the nuances of work, the vendor’s approach to communication and development, and create a contract with “insurance” in case your needs are not covered. Also specify the pricing model: fixed (a clear and unchanged budget for the entire project), T&M (engineers engagement on an hourly basis), dedicated team (in cases, when long-term sustainability and product knowledge keeping are valued by a client), etc.

Choosing the right outsourcing relationship management model is also a good practice. Determine how deeply you are willing to be involved in the development process, how much time you can devote to it, and if necessary, choose a specialist from your company to manage communication with the vendor and provide regular reporting for you. This way, you will always be aware of the progress.

Easy Way to Outsource in Ukraine With Leobit

Leobit is a full-cycle web and mobile application development service provider for technology companies and startups primarily located in the US and the EU.

We’ve delivered more than 150 projects including 3 unicorns and 9 successful exits (check our portfolio). Our tech stack includes .NET, Angular, Flutter, Ruby, PHP, React, iOS, Android, and a comprehensive range of other technologies from the Microsoft, Web, and Mobile Stacks.

Therefore, we have everything, so you can easily outsource development services to us: experience, skills, a solid portfolio, and an exceptional approach to each customer. And we’ll be pleased to answer all your questions.

Summary

Summing up, Ukraine has everything for successful IT outsourcing. This is a large pool of tech talents who work in a convenient time zone and have a high level of proficiency in English. Ukraine also offers a loyal tax system and convenient cooperation conditions for foreign customers.

It is also worth noting that such giants as Microsoft and Oracle have their R&D centers in Ukraine, and the IT community is actively developing a system of non-formal technical education. Thanks to this, each customer receives high-quality services from talented developers at practically the lowest price in Europe.

Leobit is one of the most successful development companies in Ukraine. And we will be happy to advise you on outsourcing in more detail.