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| Outsourcing to Ukraine: 2006
results and 2007 expectations |
2006 showed that IT
outsourcing remained one of the most dynamic field of
the Ukrainian economy. Because of the growing
requirements for the service, 2007 is expected to be
successful for the industry.
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/24-7PressRelease/ - January 19, 2007 -
Information Technology market in the Ukraine has
been growing stably during the last five years.
Although internal customers still cannot afford
ordering big IT projects, Ukrainian IT products
are progressively more desired in Western
countries. The USA and Western Europe are
unalterably the well-established importers of
software development services from the Ukraine.
The growth of IT industry export totaled
60% and rose to $280 million in 2006; the growth
of IT market totaled 25-30%. According to IDC
forecast, Ukrainian Information Technology market
is expected to grow 15-17% and reach $2.4-2.5
million in 2007. It means that outsourcing service
market is going to maintain its stable growth.
The successful development of Information
Technology Outsourcing Industry in the Ukraine
results from a number of advantage factors in the
country.
In spite of the increase in
developers' salaries and general price raising in
2006, software development costs are still highly
competitive and attractive for Western
customers.The attractive prices are accompanied
with progressively improving quality of products
and knowledge of developers.
Still, low
cost is the priority only for small and
medium-sized Western companies when they choose
outsourcing service provider. It is the kind of
customers which will be critical for Ukrainian IT
services export volume in 2007. In order to
attract big investors, governmental programs
stimulating country's IT industry development and
making up positive image of the Ukrainian
developers in the world need to be conducted. The
majority of US and Western European big business
owners still consider risks of IT outsourcing to
the Ukraine to be very high. Several years are
needed to attract them to the country.
Nevertheless small and medium-sized
customers are the good prospective. IDC forecasts
the increase of small and medium-sized businesses'
(SMB) role for providers searching for new
markets.
Another factor, which is expected
to contribute to the development of the Ukrainian
Information Technology market, is instable
political situation in the Middle East. The
permanent threat of war conflicts in the region
leads to customers' surrender of co-operation with
the traditional outsourcing market leaders: India,
Israel, Pakistani and other Middle Eastern
countries. The process of reallocation of orders
will start in the near future providing Ukraine
with a good chance to present itself as a reliable
and prospective service provider at the global
market. Because of the political instability in
the Middle East, interest to Eastern and Central
European countries has increased.
The
similarity of cultural code, traditions and
religion are an important advantage for
outsourcers to work with the country. US and
Western European customers like western mentality
of the Ukrainians and small time-zone difference.
Thus, the new trend called nearshoring is a
prospective direction for the Ukraine. Nearshoring
is an offshore outsourcing to the countries
situated nearby the customer's country. It is
popular in the developed Western European
countries like Germany and other countries. The
former USSR republics which include Ukraine are
within eyeshot of customers who start exploiting
nearshoring
Numerous Information Technology
conferences and forums evidence the increased
interest to the Ukraine around the globe.
Ukrainian Outsourcing Forum, which is one of the
most important outsourcing events, has expanded
its borders and hosted participants from the USA,
Europe and Asia in 2006. Ukrainian showcase at the
international outsourcing exhibition CeBIT 2006 is
another important shift.
Due to all these
factors Ukraine was included into the five most
attractive outsourcing directions in some Western
countries in 2006.
The progress of IT
outsourcing decentralization process is an obvious
trend. Regions develop dynamically and compete
with the capital, Kiev. It helps to keep prices
down along with improving the services quality.
Regional companies are traditionally small with
the staff of no more than 100 employees however
these are the companies making up the basis of the
Information Technology Industry in the Ukraine,
where big players can be counted on the fingers of
one hand presently.
That is why swiftly
developing medium-sized companies determine the
development of IT outsourcing industry in the
Ukraine now. From http://www.technoparkcorp.com
Management, the company's profit has grown by 70%
in 2006. TechnoPark Corp. is outsourcing software
development company. Software development center
is located in Dnepropetrovsk, Ukraine, and
company's headquarters is based in the USA,
Florida. Due to the US-based office it is easy for
the company to find and contact Western clients. A
number of successful projects implemented by
TechnoPark Corp. evidence that there are mature
companies able to provide reliable and stable
co-operation in the field of offshore software
development outsourcing in the Ukraine.
Due to the growing interest to the
Ukraine, a number of articles devoted to the
country as an attractive IT outsourcing direction
increase in the US and European mass media. "The
country is quickly becoming a home for offshore
development, with outsourcing turnover apparently
growing at 200 to 300 per cent annually. Locations
that buck the downward trend will provide
competitive sourcing solutions for IT directors.
Ukraine might well be one of such centres," writes
British online magazine http://www.itweek.co.uk.
Publication devoted to outsourcing to
Eastern Europe published at
http://www.global-outsourcing.blogspot.com reads
that "The attractive offshore work centers in
Eastern Europe include Russia, Ukraine, Poland,
Belarus and the Baltic. These markets not only
offer low cost skilled labor force, but also an
attractive regulatory environment with a close
proximity and cultural ties to Western Europe."
Ukrainian Information Technology
Outsourcing Industry will continue growing. Even
though experts foresee the general decrease of IT
outsourcing needs on the global market, the
Ukraine has good chances to find its niche and
develop outsourcing services due to the political
stability and great intellectual resources.
For more information about reliable software
development outsourcing partner in Ukraine, visit
http://www.technoparkcorp.com. |
Contacts
TechnoPark
Corp.
http://www.technoparkcorp.com
sales@technoparkcorp.com
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- development, eastern, europe, information, nearshoring, offshore, outsourcing, research, software, technology, ukraine
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