Nowadays the focus of outsourcing is shifting from offshore to nearshore locations, such as Eastern Europe, due to the proximity of time zones, cultural affinity, and strong technological expertise. Ukraine remains one of the top IT outsourcing destinations in this region offering a great price to quality ratio and a rapidly evolving IT and business infrastructure.
However, Asian countries, such as India, are actively flooding the market with new talents and competing with the US and European outsourcing leaders. That is why we’ve decided to compare Ukraine and India as some of the leading outsourcing destinations in their regions and define which country offers the best quality of services to meet your business needs.
IT Industry Development in Ukraine
IT industry in Ukraine grew by 15-20% in 2016, while the market grew from $2.5 billion to $3 billion according to PricewaterhouseCoopers and this pace is getting faster year by year. Over 230,000 Ukrainian IT specialists have developed strong expertise in different verticals ranging from fintech, healthcare to telecom, which helps the country maintain a competitive edge on the global IT market. More than 1000 IT outsourcing companies are located in Ukraine providing a vast array of services related to technology development. According to Bloomberg Innovation Index 2016, Ukraine is ranked 41st for its adoption of innovations and came ahead of India by four places. Since 2014, the country moved up 20 positions in the World Bank’s Ease of Doing Business 2016 and now holds the 83rd place, while India is ranked 130th.
Ukraine is also continuing to gain prominence in terms of IT industry recognition with numerous global IT companies setting up their innovation centers here. For instance, more than 100 R&D centers of major international companies such as Microsoft, Samsung Electronics, Apple, Wargaming, Boeing, Skype, eBay, Siemens, IBM, etc. are located in Ukraine. Moreover, 12 Ukrainian IT companies, including N-iX, Eleks, Ciklum etc., have been featured in the list Global Outsourcing 100 2017 by the International Association of Outsourcing Professionals (IAOP) as the best outsourcing providers. It comes as no surprise that the country was included in Gartner’s top 30 offshoring and outsourcing destinations and recognized as number one in Europe in the sector of IT-outsourcing in 2016 according to IT Outsourcing News.
IT Industry Development in India
According to The National Association of Software and Services Companies (Nasscom), the IT sector in India employs more than 3.5 million professionals with the inflow of over 230,000 employees during the last year. The Indian IT market generated revenues of $160 billion during 2016 compared to $146.5 billion in 2015, implying a growth rate of 9.2%. Such software development growth rate is attributed mostly to the country’s population size, which is around 1.2 billion, and a high youth rate with about half the population under 25.
Additionally, India has around 4,200 startups and is ranked third in the world among startup communities in such areas as healthtech, analytics, IoT, and cybersecurity. However, the president of the software association Nasscom highlighted the need to update the skill base in India for digital and consulting domains. Despite the vast availability of resources within the country, it still struggles to compete with the US and European countries in terms of digital technologies adoption. DeepDive/Everest Group also estimated that in 2015, top five IT companies in India grew at 12.3%, while in 2016 the growth fell to 8.7% and, in 2017, it is expected to go down to 6.3%.
Technical Education in Ukraine and in India
Education in one of the key factors that determine the evolution and development of a particular region. The economic progress, as well as overall progress of any country, is directly linked to the quality of education that is being imparted with the values. Strong technical education can not only stimulate the appearance of new technological innovations but also foster digital transformation within the country.
For instance, Ukraine has a strong technical education system. More than 38,000 IT professionals graduate every year with certificates in technical disciplines from over 400 educational institutions. The most popular of them are the National Taras Shevchenko University of Kyiv, National Technical University of Ukraine “Kyiv Polytechnic Institute”, Lviv Polytechnic National University, etc. Moreover, Ukrainian universities have launched a number of IT-related courses in IoT, Artificial Intelligence, Data Science, etc. to promote new technological trends across the country.
On the contrary, India has around 621 technical institutions including the Indian Institute of Information Technology, Indian Institute of Information, Technology, Design and Manufacturing (IIITDM). Additionally, such organizations as All India Council for Technical Education along with 10 statutory boards of studies are responsible for the development of technical education within the country. Nevertheless, the pace of education development in India is not quite satisfactory and requires more reforms. To illustrate this, 25% of the population of India are still illiterate while Ukraine boasts a 99,7% literacy rate.
It is a well-known fact that communication problems and cultural differences may hinder software product quality and lead to challenges in project delivery. Oftentimes, it is difficult to communicate technical and programming concepts to clients and establish feasible project goals without being able to provide clear instructions. That is why it’s essential to cooperate with a remote team that has a good command of English and relevant cultural experience.
For instance, working with IT specialists from India can be quite a challenge when it comes to the cultural differences in the way that they do business. In this country, it is considered rude to challenge anyone who is in a more senior position than yourself, even if they are wrong. This may lead to miscommunication and a number of unresolved issues which have to be clearly communicated at the early stages of the project development.
Conversely, when working with IT professionals from Ukraine, it is quite the opposite. The majority of Ukrainian IT companies are aimed at developing a business culture that is similar to the Western one and use the most effective methodologies, such as Agile to deliver better results with flexible development processes. Also, Ukrainian specialists are open-minded and are eager to bring up alternative and more efficient ways of doing things. This may minimize any misunderstandings and foster project development in the right direction. Moreover, the majority of Ukrainian developers have a good command of the English language with around 40.2% of IT professionals with fluent English skills and 38.6% of engineers having a solid intermediate level.
All in all, both Ukraine and India keep their positions as top IT outsourcing destinations in their regions. Ukraine offers expertise in the cutting-edge technologies, highly skilled IT professionals, a proximity to the European clients and a moderate time difference with the USA, which makes it an increasingly attractive destination for outsourcing. It has the biggest talent pool in Eastern Europe and increases its positions in global business venue rankings every year. So, depending on the aspects that are crucial for your business, you may decide which of these countries is better for you and choose your best IT outsourcing provider for effective cooperation.