It doesn’t come as a surprise to find out that asoutsourcing software development increases in popularity, companies arededicating more of their IT budget to outsourcing vendors. The increase of 30%took the IT budget to 12.7% in 2019 compared to 9.4% in 2018, according to thestudy carried out by Computer Economics. This is a strong sign that therelationship between client and vendor is becoming stronger.
The reasons why companies choose to outsource is alsochanging. As well as the traditional motives for outsourcing, like reducingcosts and having more flexibility, companies are now looking for long-termpartners who will shake up IT innovation to create products that they aren’table to do with their in-house team, therefore staying ahead of the competition.So just how far has IT outsourcing come and why are so many companies choosingUkraine as their outsourcing destination?
Global IT OutsourcingStatistics in 2019
Application development is still the most commonly outsourced function with 56% being outsourced. With the rise in IT security awareness, 48% is the second most commonly outsourced function. Data centers, IT infrastructure, and help desk functions also made it on the list. With regard to software application development, 55% of companies intended to increase the workload being outsourced. Furthermore, 85% of companies felt that they received the same service when outsourcing software application development, or even better.
If you look at individual sectors, it’s the financialservices sector that appears to have a greater need for IT outsourcing (74%),closely followed by manufacturing (71%), and then retail and wholesaledistribution (50%). When asked what could be done differently, the majority ofcompanies felt it was necessary to take more time over choosing a serviceprovider. Many also said that they would prefer to have a more strategicapproach to IT outsourcing.
What Is the IT OutsourcingSituation Like in Ukraine?
Ukraine has excelled at becoming one of the best outsourcing destinations in Eastern Europe and also highly attractive to other locations around the world. By 2020, the country is expected to have 200,000 IT specialists, the fastest-growing rate in both Eastern and Central Europe.
Ukraine’s client list includes well-known companies fromaround the world but it’s the U.S. that has the biggest interest. Approximately80% of Ukraine’s exported IT services are for the U.S. The country is also desirablefor software R&D, with Samsung, Cisco, and Boeing having R&D officesthere. Grammarly not only has R&D activities in Ukraine, but the startupalso originated there.
There is more to Ukraine’s popularity than its expertise.The country is geographically well located, making it perfect for commutingbetween other European and Northern American cities. Add this to the timezones, it also makes communication much easier. This also allows for a culturethat is compatible with multiple locations around the world.
Market Growth in Ukraine
The country has experienced massive growth in the IT market.There were 37,742 available jobs in 2017. This rose by nearly 50% to 55,438 in2018. There is a significant demand for front-end developers, QA engineers, aswell as engineers skilled in PHP, .Net, Java, and DevOps. Project managers werealso on the list of top 10 IT jobs in demand.
The Ukrainian Workforce
The working environment is generally quite young with 63% of IT professionals in their 20s, 25% in their 30s, and just 3% over 40. Those who are under 25 normally work in wither development or non-technical positions and it is more common to find over 35s holding senior positions. More and more women are joining the IT workforce. In 2016, 16% of IT professionals were female, rising to 24% in 2019.
For a closer look at the breakdown of specialties inUkraine, here are the types of positions in the Ukrainian workforce:
- Developers- 53%
- QA engineers- 15%
- Managers- 6%
- Non-technical specialists- 6%
- Designers- 5%
- Business analysts- 5%
In terms of experience, 29% of IT professionals have between3 to 5 years of experience, 25% have 1-2 years and 17% have 6 to 10 years. Thejob titles are quite well balanced. 27% of the workforce hold a juniorposition, 36% a middle position, and 30% have either a senior or lead position.An impressive 50% work for an outsourcing company.
Education Levels of the Ukrainian IT Workforce
56% of the workforce has received a higher STEM education and a further 28% have higher education in fields like economics and management. More women have a higher education than men but 61% of men have a higher technical education compared with 41% of women. Another advantage is the level of English proficiency. 34% have an intermediate level of English, another 34% have an upper-intermediate and13% are advanced.
Programming Languages Favored by Ukrainian Developers
2019 was a significant year for IT in Ukraine. As the marketmatured, the world began to notice this small country for its IT talent, aswell as its dedication to forming long-term relationships with clients. Theworkforce is able to provide bleeding-edge solutions, problem-solving skills,and competitive rates.