Benefits and Disadvantages of IT Outsourcing to Ukraine: the UK View
When UK businesses consider IT outsourcing, India is often considered as a premier choice due to old cultural history and high levels of technical skills. But this is now changing with nearshoring locations such as Ukraine growing in market share. Let’s look at some of the main benefits and disadvantages of outsourcing to Ukraine.
Highly Skilled IT Professionals
Ukraine’s main strength lies in its large pool of IT talent. This results from the country’s historical focus on technical education and training. Ukraine comes second in countries with the highest amount of university educated individuals. Ukraine produces some of the largest science and technology graduates in the world. When it comes to certified IT professionals Ukraine was 4th in the world after the US, India and Russia in a survey in March 2013. The graduates are not only technically qualified but offer other skills such as speaking English. Also they offer a more creative approach to IT outsourcing than countries like India.
Significant Cost Savings
As Ukraine produces high levels of IT talent but is not part of the EU, the university graduates do not have the option to travel outside the country for work. As a result the average salaries of IT professionals and developers are much lower than in developed countries. This can help lower your IT outsourcing budget by 40-60%. The option of highly skilled labor at low cost is definitely a key benefit in outsourcing to Ukraine.
Companies have begun outsourcing to locations which are located nearby and in a similar time-zone. This has been called nearshoring. Ukraine offers cultural proximity to western and central European businesses and allows easier social and business transactions based on a shared heritage. English is part of the Ukrainian school curriculum and is widely used and spoken as are other major European languages like German, Spanish and French. Ukraine is only a 2 to 3 hour flight from the UK, France, etc.. This allows project managers to visit on-site for meetings and immediate problem solving. This is much easier than dealing with outsourcing projects in India or China for example. With only a 2 hour time difference the working hours are similar to other European countries which makes communication much easier.
There are some disadvantages to consider before outsourcing to Ukraine.
- Political and social unrest is unfortunately a current issue as Ukraine looks both to the west and east and is caught in the middle of a geopolitical struggle. The situation has become calmer and diplomatic discussions are likely to promote more stability.
- Corruption is also another issue common to Ukraine and other countries in this region. Making sure you are dealing with a professional, transparent outsourcing company is key to managing a successful IT outsourcing project in Ukraine.
Ukraine is a rewarding but challenging country for outsourcing. There are benefits and disadvantages of outsourcing to Ukraine. For the UK and other western European countries nearshoring IT development to Ukraine has substantial cost savings and provides highly skilled IT talent with similar cultural values and good time-zone communication. With some caution taken for political unrest and corruption IT sourcing to the Ukraine is a worthwhile option.