There’s new report of ITO about outsourcing tendencies and rates in 2012 in Ukraine
Source: “Exploring Ukraine. IT Outsourcing Industry”, Ukrainian Hi-Tech Initiative
This report is really big, more than 100 pages and very interesting to read. If you want to see full version of report, click here.
We will try to extract most significant changes since the time of previous report of 2010 and show you briefly the situation on IT outsourcing market in Ukraine.
Since the year 2000 Ukraine has become a leading participant in the software development space, and has been outranked at the top of IT outsourcing service providers in the worldwide market. More and more companies come to Ukraine choosing it as a preferable destination for their R&D businesses office. Strong engineering education, popularity of engineering professions among the youth, and rich history of the software development industry make Ukraine one of the most attractive EU destinations for the IT outsourcing and computer software development businesses.
Snapshot of Ukraine’s IT Outsourcing Industry
Ukraine represents the largest IT outsourcing industry in Eastern Europe.
- IT outsourcing industry growth rate for 2011 — 20 %
- More than 1,000 IT outsourcing companies
- 25,000+ specialists involved in the IT outsourcing industry
- Ukraine has more than 800 universities and colleges
- Majority of Ukrainian IT specialists (est. 70 %) work for American or European customers
A number of government initiatives introduced to support and promote the Ukrainian IT industry.
Fig. 1. Outsourcing market volume from 2003 to 2011, Mln USD.
Software Development Rates in Ukraine, 2012
Information on the average rates – development companies in the Ukrainian market charge for specific expertise help provide an impartial assessment of the volume of projects and the overall expense of outsourced IT projects.
The figure below shows the rates for the following specialists: Project Manager, Senior Developer, Middle Developer and Junior Developer, QA Tester, Application Architect, Business System Analyst.
Rates are calculated based on the amount the end customer pays for the services of an IT specialist per hour, inclusive of salary, taxes, facilities, etc.
To calculate the maximum average rates, the average value of 15 % of a maximum rate for a Project Manager was used. To calculate minimum average rates by country, the average value of 15 % of minimum rates for a Junior Developer was used.
To calculate the average market rates, sources used included data on average rates by position.
The average rates were calculated using the following formula: 10 % of average rates for a Project Manager in the country; + 20 % of the average rates for a Senior Developer in the country; + 50 % of average rates for a Middle Developer in the country; + 20 % of average rates for a Junior Developer in the country. Ten developers was the average number of members in a typical team used for this formula.
Service Rates US$/hour
|2012 rate, USD||2010 rate, USD|
|Average Market Rates
(maximum – minimum)
|42 (max) – 14 (min)||24|
|Average Market Rates||25-26||24|
|Business System Analyst||37|
In fact, there’s a small grow since last year.
As you can see, average development rates are growing steadily every year. But current rates for development services in Ukraine far less than same level developer rates in USA or Canada.
Of course this rates are almost the same as in India or Vietnam, but the level of developers in Ukraine and India are very different. Ukrainian professionals are well-educated persons, most of them have bachelor degree and have great learning abilities.
Main IT Outsourcing Services Provided by Ukrainian Companies
Considering that IT support and BPO services are closely related to offshore software development services, there is great potential for further developing these segments. In addition, the recent strengthening of Ukrainian legislation to meet European standards for the protection of personal data is a strong, positive step for the development of IT support and BPO services in Ukraine.
- Custom software development – 92%
- Software testing / QA – 67%
- Application maintenance / Application management – 55%
- End user support / Application user support – 44%
- System administration / Database administration – 42%
- SaaS services – 39%
- Box/ Licensed software development – 36%
- IT consulting / Project management – 34%
- Helpdesk support / desktop management / IT service desk – 25%
- Game design and development – 25%
- System integration / Integration IT services – 15%
- Enterprise application management – 14%
- Security management / On-line monitoring / Antivirus support – 12%
- IT strategy / IT architecture services – 12%
- Network infrastructure support – 7%
- Hardware maintenance / Infrastructure services – 4%
- Application hosting / Application housing – 4%
- IT training – 1%
As you can see, outsourcing market in Ukraine grows year by year very well. Most Ukrainian IT specialists are well educated and are true professionals in their fields.
As more and more companies try to lower their development spending, outsourcing to Ukraine can be really pleasant solution to you and your company.