The Pros and Cons of Outsourcing Software Projects to Ukraine


Intro

What makes Ukraine a top nearshore IT outsourcing destination? Are there any hidden dangers to outsource IT tasks to it? Let’s walk through the pros and cons of IT outsourcing to Ukraine based on the example of Onix Systems – a software development company based in Kropyvnytskyi, in the heart of Ukraine. 

High Level of Expertise

Ukraine has been the technological hub since the Soviet Union times and is an IT center today. Many young people choose to pursue technical professions and enter the technical universities which can be found in major Ukrainian cities.

Major software development companies in Ukraine offer their own training seminars/courses for their software engineers, testers, designers, and managers. These initiatives help Ukrainian IT companies to hone the skills of their employees and prepare them for the next level of expertise.

Without exaggeration, Ukraine can be called a Silicon Valley of the Central and Eastern Europe (CEE). This country has:

  • the highest IT share of the outsourcing market in CEE; 
  • 16,000 IT graduates per year;
  • pro-Western orientation;
  • membership in the World Trade Organization.

All of these factors make Ukraine a fruitful land for outsourcing IT projects to.

Good Price-to-Quality Ratio 

Ukraine is a cheap place to live in, according to the cost of living index of NUMBEO, ranking 120th out of 136 countries by the midyear of 2019.

Despite the recent growth of IT specialists’ salaries, Ukraine still offers more attractive software development prices compared to the US and Western Europe. When Western companies transfer their IT “production capacity” to Ukraine, they can reduce their total onshore costs by 50%.

The cost of software development in Ukraine or any other country depends on the chosen cooperation model:

  • Full-cycle outsourcing. That is when a project is assigned to an outsourcing company which prepares the scope of work to be done. Then, the development work starts from scratch. 
  • Outstaffing means hiring software developers or other specialists if you lack them in your in-house team. Hired specialists will be part of your team despite being geographically far away from your main office. 
  • Launching startup implies hiring a whole Ukrainian office to create a new startup: developers, QA specialists, a PM, business analysts, an HR manager, accountant, and so on. 

The average middle software engineer’s rate is $25-35 per hour in Ukraine. You will be surprised at the level of quality for such a fee. Ukrainian IT engineers are capable of turning most ambitious ideas into reality. 

However, before entrusting your idea to an outsourcing company, do extensive research. Read independent reviews and visit the IT companies’ websites to see if they are reputable organizations. For instance, Onix has a website where you can read their story and see some of the projects they are involved in. Most importantly, if you are interested in working with a specific company, get in touch with their customers to get their feedback.

Convenient Time Zone

Ukraine is in GMT + 2 time zone. That is convenient for clients living in Europe, as their business hours are practically the same as the working hours of Ukrainians. Even for U.S.-based companies, Ukraine is a better time zone than Russia, India, or China.

Fast and Cheap Broadband Internet

As of June 2019, Ukraine is ranked 53rd for fixed broadband speeds in the world and 88th for mobile speeds. 100-megabit connection with unlimited traffic costs less than $6/month in major Ukrainian cities.

The Drawback: Military Conflict in the East? 

Many people are afraid of the fact that there is an armed conflict taking place in the East of Ukraine. However, the military conflict occupies only 7% of the Ukrainian territory. The rest of the country enjoys an ordinary peaceful life. The Ukrainian situation is similar to that of Israel. Israel has been in the state of military conflict since its inception, but that didn’t prevent the country from becoming the world’s technological hub. Israel’s startup ecosystem is inferior only to Silicon Valley, Google, Microsoft, and IBM R&D centers.

The difference is that Ukraine is Europe’s largest country. For example, the distance between the home town of Onix-Systems and the troubled area is comparable to the entire length of Israel from the north to the south. Neither the annexed Crimea nor the two regions partly occupied by Russian militants were influential IT centers. After the invasion, the regions’ IT companies and specialists were mostly moved westward, to the safe areas. The Internet and electricity supply in the peaceful parts of Ukraine don’t depend on the occupied areas either.

When you enter a safe long-time relationship with a trustworthy Ukrainian IT company, you can be sure of writing a new chapter of your business’ success.