IT outsourcing in Ukraine has outlived the reputation of the “short-living” industry and became a competitive participant in the technological arena. After getting through an outbreak of 2009, Ukraine grew the IT segment transforming the pilot IT Ukrainian outsourcing companies into full-scale leaders prepared to stand up to bigger challenges. Now, the rising IT nation produces high-quality and innovative software for international clients.
1. West-oriented Ukrainian economic and political transformation
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Business-aware as it is, software development outsourcing to Ukraine has inherited the best practices of Western-style communication conduct. Our location plays an important role in cooperation:
- EU residents need no Visa to travel to Ukraine
- small time-difference with EU countries
- close cultural proximity with Western countries
Additionally, the simplifications touched upon one of the biggest problems of outsourcing – tax paying and money transactions. Thus, the simplified system of accounting outsourcing in Ukraine appears as another attraction for foreign investors.
It is not only about outsourcing
Yes, Ukraine outsources its services to foreign companies, but its amount has decreased. Only 16% are specified on the help desk or system administration for other companies. Most IT companies develop an independent product, which made a huge influence on the everyday life of every person. Because of the privacy policies and NDAs, signed before most of the projects are getting started, companies are not allowed to declare it to the public. That is why Ukraine is known as the country that concentrates on outsourcing. There are a few main business models, used by IT companies:
- Service model. When the IT company develops a product, at the request of the clients, all intellectual rights for the product belong to the client.
- Product model. IT company develops products and licenses, the intellectual rights of the product are kept by the developer company.
- Mixed model. Companies of this type work on both, developing their own product and doing software for other companiesю
- Outsourcing of business processes. The company performs some business duties for international companies, which are not related to software development. Mostly those companies work as call-centers, helpdesk, and system administration.
IT field influences improvement of other fields of life
In the modern situation in Ukraine, workers of the IT industry set the style of the life of the whole city and country. There are 20 IT clusters in Ukraine, which function in big cities and small towns. Those clusters work on the development and improvement of different fields like an improvement of law-specific issues, a popularization of the IT field, development of technical education. Also, clusters work on the question of infrastructure, transport communication, ecosystem (popularization of waste sorting). Only positive changes are brought to the country with the popularisation of the IT field.
2. Increasing number of IT specialists in Ukraine
Ukraine expects a 15-20% increase of IT specialists by 2020. The rising interest in employment in IT is caused by the real chance for confident professional development. The constantly growing number of technologies causes a strong demand for high-level IT specialists.
Ukrainian companies have entered The Global Outsourcing 100 and proved their proficiency showing the perfect performance in the international arena.
About 80% of the Ukrainian IT services were outsourced, which means that the companies manage to meet the requirements of the international clients and keep a competitive spirit on the modern market.
3. Strong R&D-oriented IT schools in Ukraine
Among the reasons for outsourcing to Ukraine are that recently Ukraine became a popular destination for IT outsourcing. A lot of IT schools and Technical Universities are offering education for talented students. A huge amount of IT companies is ready to work with newly graduated students or to teach talented ones from the beginning. Despite political and economic issues, faced by Ukraine, the IT industry represents stable and rapid development.
Kyiv, Dnipro, Lviv, Kharkiv, and Odesa are the IT centers of Ukraine that annually produce qualified programmers. In 2017, the IT industry attracted more attention from educational representatives. This resulted in the rising number of IT schools mastering all-level languages.
The rising number of specialized courses and schools gradually grows the number of potential specialists.
Currently, Ukraine enumerates about 90 000 IT specialists with about 40 000 of them having passed the international certifications.
The predictions are even more promising – about 200 000 IT specialists are expected to appear before 2020.
4. Outsourcing technologies and services vary for your business
Following the newest trends, Ukrainian IT companies adjust to the needs of European clients. The Ukrainian market specializes in the production of data management software, E-commerce, media, Cloud, telecommunications, and gaming technologies. To ensure that the Ukrainian IT development produces the software according to the standards recognized across the world, the agency “Informational technologies of Ukraine” revealed its activity. As a result, in 2006, it joined the EKTA proving the adherence to the international quality requirements.
Unlike the average European competitors, the Ukrainian IT companies grew into multifunctional self-standing units – business analysis, consulting, testing, design, and many other services are now being provided in one place.
5. Ukrainian outsourcing – the lowest prices for outsourcing services in Europe
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The dynamics of the income growth in the IT-sphere are stable and show a slight annual increase. Nevertheless, Ukraine strikes the international arena with the competitive cost of services. The secret for superiority lies in the flexibility, fast adaptivity, and innovative technologies used in the developing process.
According to the 2010 Global Services 100 list, Ukraine joined the 20 leading countries providing high-quality IT Outsourcing and High Tech Services.
The legal and economic spheres are now actively adapting to the needs of the international businesses that is why contract signing, as well as the finance transferring, is no longer a reason for consideration.
Surely, those who have a bigger experience of using or providing services to foreign companies already know the advantages and disadvantages of outsourcing, but the fact remains unchanged – they continue their cooperation with outsourcing companies in Ukraine.
Seven years of delivering high-quality products and services made Inoxoft one of the outsourcing example companies. Now we can confidently share a recipe for a good example of IT outsourcing services in Ukraine:
- the contractor is prepared to share the IT outsourcing risks
- you are provided the full stack of documentation (NDA etc.)
- the company is a one-stop-shop so it won’t delegate the job to 3rd parties
Why do сompanies outsource software development to Ukraine?
Today most entrepreneurs, at some point, select a trustworthy partner to conduct the full cycle of product development: from the business analysis to product release. After deciding to delegate some company’s functions you have to start looking for an outsourcing destination, sticking to the balance between price, quality, and time.
On global terms, the Eastern European region remains one of the top software outsourcing destinations due to the high level of professionalism and affordable rates for their services. Outsourcing software development to Ukraine, Hungary, and Romania define the information technology sectors there as the main catalysts for their economic growth and technological advancement.
Ukraine has become an important player in the global tech arena. Being the largest country in Europe with a population of nearly 43 million and a workforce of 20 million people, Ukraine is one of the information technology leaders and investment markets for global businesses. The tech industry here exported $5 billion only in 2020.
Ukrainian specialists have a long history of cooperation with Western customers and are experienced in working on complex projects. Thus, a lot of businesses all around the world choose to cooperate with Ukrainian software development service vendors due to the large pool of qualified talent in the country. As well as cost-effectiveness without compromising the quality of services, the insignificant time difference with major software development centers, and close cultural fit with European and Western markets.
Among famous Ukrainian startups that attracted investments and made large deals are Grammarly ( $110 million), BitFury ($30 million) in Petcube ($10 million), and People.ai ( $7 million. Also, our software engineers are highly praised abroad and numerous European and American companies would hire our tech experts by all means. For instance, professional Ukrainian Java developers are working for Amazon and Google, Facebook, and many more outstanding tech giants.
Currently, nearly 1,600 software development service companies operate in Ukraine. They are divided into product, outsourcing companies, and delivery centers of global business (including Samsung, Microsoft, Skype, Gameloft, Siemens, Huawei, etc)
Research organization Gartner inspects outsourcing locations in terms of criteria such as language, government support, labor pool, infrastructure, educational system, cost, political environment, cultural compatibility, data privacy, intellectual property, etc.
The quality of Ukrainian tech skills is recognized across the world: for the past six years, Ukraine has consistently featured in Gartner’s top offshoring and outsourcing destinations and is ranked as number one for outsourcing markets in Eastern Europe. The country was named the “Delivery Destination of the Year” in 2021 by Global Sourcing Association (GSA) and takes 11th place out of 50 in the rating of countries with the best dedicated software development team in the world according to the HackerRank.
Also, Ukraine focuses on the tech industry in terms of education: the industry is growing by nearly 25,000 – 30,000 specialists per year with 16,000 graduates from universities all over the country.
Cybersecurity, data protection, and confidentiality have become hot topics lately. Thus, software companies require a legal framework for maintaining effective partnerships with clients. Every party has to be sure that there will be no legal obstacles when they choose to partner with a service provider in Ukraine.
One of the drivers of the tech industry is the legislative field that ensures the right conditions for doing business. Since the country has signed the Association Agreement with the European Union, it has initiated several reforms in the legal systems to meet the EU standards. The key improvements that have been introduced in the industry are data protection, taxation, employment, and services export.
The main legislative act regulating data protection in Ukraine is The Law of Ukraine On Personal Data Protection. Also, the country is a member of the Convention for the Protection of Individuals concerning Automatic Processing of Personal Data since 1981 and the 2001 Additional Protocol. Other legal documents that ensure data protection in Ukraine are the Law of Ukraine On Information, the Law of Ukraine On Protection of Information in the Information and Telecommunication Systems, the Law of Ukraine On Electronic Commerce, and Law On Basic Principles of Ukraine’s Cyber Security.
Legal standards such as General Data Protection Regulation (GDPR), The International Organization for Standardization (ISO), The Payment Card Industry Data Security Standard (PSI) brought Ukraine changes into its legislation on the protection of personal data. Now, the Data Protection Lawfully corresponds to the EU Data Protection Directive. In 2017, the Information Security Doctrine which is aimed at protecting against cyber attacks during the free and globalized circulation of information was approved.
Every major city in Ukraine has technical universities, 70% of Ukrainians have a secondary or higher education. The number of graduates from tech programs at Ukrainian universities is constantly increasing. In 2024, more than 20,000 students will obtain a bachelor’s degree in IT ( 23% more than in 2020).
English language is considered to be the international language known and spoken all around the world. DOU states that most software developers, as well as project managers and business analysts in Ukraine, have intermediate or higher English skills. Such levels of English proficiency of our technical experts make communication with the customer smooth.
Timezone convenience and geographical location
Another important factor to consider is the Ukrainian geographical location. It is attractive, both in terms of business travel and climatic aspect. There are no such natural disasters in Ukraine as hurricanes, cyclones, tsunamis, etc., which can stop business processes for a long time. As a benefit, we have convenient connections with the largest airports in the world. It takes only 10 hours to get here from New York, 3 hours to get from London, and 2 hours from Berlin. Ukraine’s time zone is UTC +2, which makes it convenient to work both with Europe and the USA. Outsource software development to Ukraine!
Quality of Internet connection
A required component of working with a software vendor is the factor of speed and quality of the Internet in its country. According to research, Ukraine is among the top 100 countries with the highest speed of the internet compared to other popular outsourcing destinations such as India and China that took 101 and 200 places.
Lviv as an outsourcing destination in Ukraine
According to a survey near 12% of Ukrainian software engineers live in Lviv. Let’s take a closer look at this city.
Lviv, the biggest Western Ukrainian city, is a rising technical hub and an important outsourcing destination within the country. One of the greatest values of the city is the closeness to Europe both by distance and mentality and cooperative business and political relations. The region attracts several international companies that have based their R&D centers here (Gameloft, Siemens, Oracle, etc.). Also, the city entered the top 10 for cost-efficient investment in the Financial Times investment ranking Smart Locations of the Future. At the CEE Business Services Awards 2020, Lviv was named the best outsourcing destination in the category of developing cities in Central and Eastern Europe.
Among the advantages of Lviv in the international market of software development services are:
Skilled Tech Talents
According to the research, there are 492 software development companies in the city. The number of software development specialists in Lviv has been growing – 26-26.5k, compared to 24 -25k last year. The number is predicted to increase to 30,000 by the end of 2021.
The talent pool is growing also due to universities and specialized course graduates. More than 4,000 students graduate with a tech degree from at least 3 major Universities: Ukrainian Catholic University, Lviv National Polytechnic University, and Ivan Franko National University every year. The leading directions among the students are Computer Science and Information Technology, Computer Engineering, Applied Math, Data Science, etc. multiple educational programs are also conducted based on specific companies.
It will require less investment to outsource a software project or start a business here in Lviv than in other cities. The rates for software development in Lviv vary from $25 to $50 per hour, depending on the developer’s years of experience, tech stack, seniority level, and programming language. The total economic effect of the IT sector in Lviv in 2019 amounted to $ 1.255 billion. Read more about how much does it cost to hire an app developer here.
The local IT ecosystem is supported by a network of technical universities and IT clusters. One of the biggest IT associations in Ukraine – Lviv IT Cluster gathers technology specialists, software development companies, educational institutions, and authorities to develop the local tech environment. Also, Lviv hosts one of the biggest European tech events, the IT ARENA and smaller tech events (IT Talk Lviv, Angular Meetup, Lviv DevOps Meetup, etc.) and hackathons (BEST Hackathon, AngelHack Lviv, Garage Mobile Lviv) with an aim to network, share experience, and learn about new tech trends.
Source: Lviv IT Cluster
Outsource your software development to Inoxoft
The process of finding and hiring the best-fit IT outsourcing company in Ukraine to conduct the full-cycle product development isn’t an easy thing to do. Sometimes it’s a real challenge, especially when you extend your search to the global talent pool. Inoxoft has considerable experience working with foreign clients. You are always welcome to view our projects that are also fine Ukrainian software outsourcing examples.
If you are looking for a perfect outsourcing company in Lviv to implement your software idea, Inoxoft would be your best Ukrainian IT outsourcing company due to:
Geographical and cultural convenience
Inoxoft is an international software development company with offices in Lviv, Philadelphia, and Tel Aviv. We have similar values and business ethics with companies in Europe and North America. This outlook makes collaboration on the international level much smoother.
High loyalty on the team
We have successfully built and implemented a range of great software products for a number of customers from the USA, UK, Israel, Switzerland, Sweden, Norway, Germany, Australia, Canada, and the Netherlands. 70% of our clients come by references given to us by our previous business partners. Inoxoft team has experience in delivering first-class software products. They always bring resources such as fresh views, knowledge, creativity, and innovation which leads to profitable web app development and mobile solutions.
According to our CEO Liubomyr Pohreliuk, our main strengths and values include transparency and straightforwardness. Based on these features, we are looking forward to building a long-term relationship with our clients and always try to think from their perspective. In case the clients’ idea needs refinement, our experts will help with a solution in the most profound way. We believe there are various ways to outsmart every situation. With the help of smooth communication, flexibility, and an open mind (thinking outside the box) we’re coming up with the best solutions and develop first-class market-leading products.
Engineers at Inoxoft ensure, develop and share expertise in Flutter, React Native, Python, .Net, React, and Node.js. Mobile development at Inoxoft includes creating iOS applications as well as Android. We stand out as a trusted provider of the original software and are experts at customized solutions for Healthcare, Fintech, Education, and Logistics.
In addition to software development, we created an educational hub Academy X. The main purpose of this learning space is to share experience, promote cooperation and competitiveness, organize courses, tech talks, and workshops to boost the professional level of engineers. Such an approach helps to create a network of experienced professionals in our city.
Among our clients there are TOSHIBA, NIVEA, Vestel, University of San Diego, Synergy 3D, NEO VICI, OSS, VIM, AIRPA, OverOps, MAXFIN, Medical Cytrometrix, BEYOND VERBAL, YUMBLEKIDS, Slooh, Guru, Papukurier, SITIME, LUMEN, PINGUIN, OatFoundry, BOS Dimex, MULTIVIB, WALDRON, QUICKWY, Panic Guard, Rhenus Logistics, Jador, etc.
Web and mobile development services at Inoxoft go along with Discovery Phase and Quality Assurance. Inoxoft also provides Big Data Analytics and Machine Learning services to help businesses reach data-driven solutions and use AI effectively. We also specialize in real estate software development. Depending on the client’s requirements, the team estimates the best cooperation model for client communication taking into account the time scope, project complexity, and budget.
Inoxoft is well-recognized by the global tech market: the company was named as Top .Net & Web Developers in Ukraine and Israel by Clutch, in the Global Outsourcing 100 published by IAOP, recognized by GSA UK 2019 Awards, included in top software development companies by Manifest. In 2021 Inoxoft took 11th place among 250 leading development and IT firms in Ukraine. So, outsourcing development to Ukraine is a good choice! Hire developers in Ukraine!
A little comparison
Before deciding to outsource your product development to a specific country, keep in mind possible cultural differences and as a result different business approaches. For instance, companies in the Asian market, provide good service to their clients but be ready for slight language barriers and different prospects on some issues. Now let’s take a glance at our top outsourcing destinations and compare them.
- The average hourly rate for a software developer in India is $18–40/hour.
- Time difference India is 9 hours and 30 minutes ahead of the East Coast and 3 hours and 30 minutes ahead of the EU.
- Business Trips. All U.S. and EU citizens need a valid passport and valid Indian visa to enter and exit India for any purpose.
- The average hourly rate for a software developer in Israel is $25–50.
- Time difference. Israel is 7 hours ahead of the East Coast and 1h ahead of the EU.
- Business Trips. U.S., Canadian, and EU citizens do not require a visa for Israel for a maximum stay of 3 months
- The average hourly rate for a software developer in Brazil is $7-16.
- Time difference. Brazil is 1 hour ahead of the East Coast and 5 hours ahead of the EU.
- Business Trips U.S. and E.U citizens do not need a visa if they are traveling to Brazil.
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Engaging with Ukrainian software developing companies brings lots of value to the business through technical expertise and cost-efficiency. Our team builds market-leading software and provides services to meet the most specific business requirements. Do you have a project on your mind? Hire developers for startup and outsource development to Ukraine! Feel free to contact us to implement your best ideas together!