How to Effectively Outsource the Development of Your Product in Ukraine?
Tech ecosystem in Ukraine was literally booming over the past decade. Being the second industry with the largest export of services, Ukrainian IT sphere raised $290 million investments into startups. The balance of reasonable rates and high quality of services made more than 100 of the Fortune 500 companies choose outsourcing to Ukraine.
On top of that, here are a few more facts about the Ukrainian IT industry:
- 20% of leading worldwide companies have their back offices in Ukraine
- Around 184,700 expert software developers
- More than 4000 tech companies
- Over 2018, the volume of exported IT services increased from $3,6 to $4 billion
- Ukraine is ranked 24th on the list of the best countries for software development
- 110+ research and development centers are based in Ukraine
Thus, if you are choosing a company for outsourcing, Ukraine is one of the most attractive countries to search for a reliable services provider. In this article, we will guide you through the specifics of delegating your project to a Ukrainian IT outsourcing company, the pros and cons of doing this, as well as will compare price and quality ratio.
Ukraine on the Outsourcing Map of Software Development
Now that you’ve already seen some numbers about IT outsourcing Ukraine peculiarities, let’s have a look at how this country compares to the other ones in terms of highly qualified staff:
Developers’ IT skills in different countries, based on tests, SkillValue
Thus, Ukraine is on the 8th place, surpassing even Switzerland, the UK, and the U.S. In its turn, it’s a kind of guarantee you’ll get a high-quality product if you choose to find a vendor for software development in Ukraine.
On top of that, you get decent services at quite an affordable price, while collaboration with a company from Western Europe or North America will cost 2-3 times more. We will dwell upon the average hourly rates of the Ukrainian developers further on in the article. Meanwhile, let’s consider why Ukraine continuously attracts leading world companies for IT outsourcing along with nourishing the homegrown startups.
Why Ukraine is a Good Decision for Startups and Enterprises
One of the main reasons why so many tech startups evolve in Ukraine, and why the country is so attractive for huge international enterprises is that there are lots of developers who know different languages, platforms, and technologies. The following ones are the most popular among them:
- Android and many more
Thanks to such a wide range of technologies, they can undertake a project of nearly any complexity.
You may wonder how it is possible to gather such diverse talents under one roof. The other reason why the IT outsourcing industry in Ukraine is so good for a company of any size is the high level of tech education. Just to compare: around 87% of people in IT obtained at least a master’s degree, with 64% of them having a STEM degree. In addition, all STEM specialists are not only thoroughly tested, but they also get enough practice at the university to gain the necessary expertise and to be able to find a job right after graduation.
Finally, the fertile ground for software development in Ukraine is determined by the fact most engineers and non-tech specialists have working proficiency in English. 34% and 33% of them know the language on the intermediate and upper-intermediate level correspondingly, while 12% estimate their level as advanced or fluent. What’s more, lots of Ukrainian outsourcing companies hire native speakers. Thus, you may not be afraid they a PM or developer will misunderstand your requirements.
Of course, there are more reasons why multinational corporations choose outsourcing to Ukraine or why so many of new startups emerge there. But we’ll come back to them later, and now let’s have a look at the most prominent companies in the Ukrainian IT market.
List of IT Startups Located in Ukraine
You should have already heard about some of the companies, listed below. Yet, some of them can surprise you by their origin.
- Grammarly. No wonder it’s in the first place—Ukraine can be proud of such a remarkable company being established on its territory. They’ve created not just an AI-based grammar checker, but a true writing assistant. And seems that it’s one of the products that make the world a better place for real, as people with dyslexia admit they started living the full life with Grammarly, being able to express their thoughts like anyone else does. At the moment, they have offices in Kyiv, New York, and San Francisco, with the overall number of employees going beyond 500 people.
- Depositphotos. Is another prominent startup with the roots in Kyiv, and one of the oldest ones on the least. They became a real competitor to Shutterstock, offering high-quality royalty-free photos and images. Over a decade since their launch, Depositphotos expanded their offices to New York, Milan, Warsaw, Limassol, and Moscow, with almost 800 professionals.
- MacPaw. They create applications for Mac users, like CleanMyMac, Gemini, SetApp, and others. The MacPaw team consists of nearly 200 employees in two offices: Santa Clara, CA and Kyiv, including 2 cats.
- Preply. Another promising educational startup, born in Ukraine and aimed at connecting private tutors-freelancers with students for either in-person or remote training. At the moment, they have around 100 specialists and two offices in Kyiv and Barcelona.
- Petcube. Like Grammarly, Petcube was founded in Ukraine and then moved its head office to San Francisco. They won customers love for a simple reason: they created devices, connected with an app on your smartphone, which empower you to interact with your pet remotely. Though remaining relatively small (their team comprises less than 80 people), Petcube managed to conquer the whole world.
List of World Software Companies Located in Ukraine
In addition to cool startups and companies for outsourcing, Ukraine also attracts large international software players.
- ABBYY. The company focuses on AI-based and optical text recognition, along with a number of other solutions, connected with linguistics and information processing. It’s most famous for its ABBYY FineReader and ABBYY Lingvo. Currently, Kyiv office has nearly 200 employees, working with Eastern European market.
- Microsoft. The global software leader opened its office in Kyiv in 2003. Since then, the affiliate has grown up to 200 experts, working on innovative software solutions.
- Wargaming. World-known video game company, which gave birth to World of Tanks. Kyiv office of Wargaming consists of more than 400 specialists, engaged in games development and support.
- Samsung. One of the major electronic gadgets corporations established a local R&D center in Kyiv, with over 550 people in their staff.
- Oracle. The company seems to love Ukraine so much, they have opened 5 affiliate offices on its territory: in Kyiv, Kharkiv, Lviv, Dnipro, and Odessa. Altogether, there are around 800 software engineers and non-tech experts working in it.
Pros and Cons of Ukrainian Outsourcing Software Development
Like any medal, software development outsourcing to Ukraine has two sides. Let’s consider each of them to get a holistic picture of the current outsource market here.
In addition to the diversity of technical skills and a good level of English of the Ukrainian developers we’ve mentioned above, there are a few more things that make the country especially attractive for outsourcing:
- Excellent quality at a reasonable price, which we will cover in detail below. Thus, you can save your budgets while getting expert help with your project.
- Little to no cultural gap. As far as Ukrainians share the same values most Europeans do, it’s quite easy to get on the same page with them.
- Slight time zone difference with Europe. This enables easy remote meetings scheduling and transparent communication. Even though the difference in time with the US is bigger, there are still some working hours you can have in common if you decide to outsource software development Ukraine.
- Convenient location. With more airlines expanding their services to Ukraine, it becomes much easier to go there on a business trip.
- Lots of industry-specific events, empowering networking and exchange of expertise between people from different regions. Such gatherings also contribute to simplifying the hiring process, as lots of young tech talents eagerly attend them
Despite lots of amazing about the software development industry in Ukraine, there are a couple of drawbacks which can hold you back from outsourcing their resources:
- More time for a team to dive into a project. Though outsourcing teams are highly qualified, it can take some time for them to get acquainted with your industry, products, and services. That’s why we highly recommend to choose a company that specializes in the projects, similar to yours.
- Ukraine is outside of the EU. Yet, for the past 5 years, they were undergoing a number of reforms to establish the ground for future joining the European Union. Also, they do not need visas any more to enter the Schengen zone. This means they can easily come to your office if needed.
The Ratio of Hourly Rate and Quality of Ukrainian Software Developers
After considering all the benefits and disadvantages of hiring a remote team of developers in Ukraine, it’s high time to check their hourly rates and quality of their services. Namely, the difference in quality will depend on the expertise of a particular software engineer. Let’s compare how much services of an entry-level, middle, and senior developer will cost:
How to Choose the Right Outsource Software Development Company in Ukraine?
Finally, we’ve reached the point with useful tips on how to select an outsource software development company in Ukraine, which will be a good fit for your project. Let’s discover the things you need to pay attention to when choosing an IT services provider.
Clarify and document your needs and goals
Thanks to this, you will be able to compare the range of services different companies offer with your current demand. Here’s a small checklist to help you navigate this step:
- Should it be a website only, or will you need a mobile app as well?
- What purpose will your product serve (e-commerce, educational, etc.)?
- How many resources do you have (for instance, deadlines and budget)?
These are the basic things you should think through, but you can also add more details on the features you want to see. These can be types of authorization, integrations, an in-built communication platform, and so on.
Compare the offers from different Ukrainian outsourcing companies
On most websites, you can get a free quote to estimate the potential scope of work, timeframe, and budget. Gathering such offers from several companies will help you decide which one suits your project best. Additionally, you can make your own mini-research on the following aspects:
- Study the company’s background. For example, here at MWDN, our experience covers any aspect of the project you may need when deciding upon a software development company to outsource to Ukraine. Namely, we provide a comprehensive set of services to turn your business idea into a fully-functional product, starting with initial research and ending with testing and delivery.
- Check if the company has worked with similar projects before. You can see some industry-specific apps, websites, and other software solutions we’ve developed on our portfolio page.
- Review testimonials from the previous customers. On our website, you can always check customer references about us to see how we managed to satisfy their needs.
Select the cooperation and pricing model
There are three basic types of cooperation with an outsourcing company that influence the cost of the project:
- Fixed price. This model means you agree for some fixed cost of the whole project with a small space for changes, documented in the agreement. It’s good for you if your budget is limited and you are not ready to pay for any extras.
- Dedicated development team model. This type of cooperation presupposes you are assigned with a team of specialists who spend their work time on your project only. Thus, the team focuses on your product alone and can better dive into the specifics of a particular product. You can also opt for a project manager, who will supervise the developers and keeping you updated about the progress. Usually, you can discuss all the details and resources required beforehand and sign a contract for a definite sum of money.
- Time and material. This model implies paying the company per each hour their developers spend. You may also need to cover the costs of materials they are using to work on your project. Such a model is good only in case you have an almost unlimited budget and no clear vision of what you will need in the result.
To sum it up, choosing a company to work on your product is very similar to choosing a partner to share the rest of your life with. That’s why we recommend to do it with precision, in order to avoid any unpleasant surprises. And just a gentle reminder: we are always here to become your trusted partner and make your product a success. Be sure to contact us and we will gladly answer any questions you may have.