Common IT Outsourcing Destinations: India vs. Ukraine
Lately, we've noticed that companies began preferring nearshore locations like Eastern Europe, instead of the offshore ones like China or India. It is explained by the almost unnoticeable difference in hourly rates, nearly identical time-zones, and shared cultural values.
Ukraine, as one of the leading IT outsourcing destinations in Eastern Europe, often gets compared to its Asian counterpart - India.
That's why we have decided to shed some light on where they differ, where they have similarities, and what actually matters when looking for an outsourcing company.
The latest IT industry survey has shown that Ukraine currently has over 130k IT specialists with expertise in fintech, healthcare, gaming, automating, manufacturing, managing, IoT, and AR/VR software. The number of ambitious young Ukrainians that decide to take up IT as a career is growing each year. As shown by the survey, by 2025, Ukraine will have nearly 250k tech specialists.
The global recognition of Ukrainian IT power continues as more and more international tech companies such as Microsoft or Magento open up their R&D centers here. Moreover, despite the overall strained political and economical situation, Ukraine has managed to stay among the ranks of Bloomberg Innovation Index 2018, dropping to 46th place due to Petro Poroshenko banishing Yandex and Vkontakte out of the country, while India simply dropped off the list.
Regardless of all these hardships, Ukraine holds a 24th place on the Global Services Location Index, with over 18 companies holding a place in the 2018 Global Outsourcing 100. It is known for having skillful tech experts, offering high-quality software development services, and setting up world startup stage.
Until recently India's IT sector has been showing remarkable growth, but lately, the situation has started to change. Previously the revenue of Indian IT sector has grown by 2 digits every year, thus, but after 2009 came a decline in development and revenue dropped to single digit numbers. After that, there was some recovery but the original pace was never achieved again.
Being a significant contributor to the country's economy, IT makes up about 8% of India's GDP. important growth driver, it contributed 7-8% to India's GDP. Indian IT is known for cost-effective outsourcing services that helped change India's economy and it's perception by the global community, that can be seen from the country's 56% share in the overview of outsourcing services.
However, despite the astonishing diversity of recourses within the country, it still lags behind Ukraine in terms of adoption and invention of new digital technologies.
While both countries are undeniable leaders in their regions with highlight skilled experts that offer cost-effective business solutions, they do have a list of differences you should pay attention to.
If talking about Ukraine, the time difference will be easier to handle, especially for East Coast and countries of the Eurozone. Ukraine is located in the center of Europe, so a 1-hour difference between Kyiv and any other European city would be almost unnoticeable.
Therefore, Ukraine would be a better choice if communication is critical.
Ukraine lags not too far behind in terms of saving up on developing costs. Plus, apart from being practical, Ukraine has a lot of common cultural connections with Europe and the US.
All in all, actual rates are pretty similar in these two countries, between $20-35 per hour of work. If you want to study the global outsourcing market more closely, read our detailed guide on development cost around the world.
Over 40k of technical specialists graduate from Ukrainian Universities every year. The most well-known of them being the National Technical University of Ukraine "Igor Sikorsky Kyiv Polytechnic Institute" and Lviv Polytechnic National University, which have launched several courses on Data Science and Artificial Intelligence.
While the number of annual graduates in India is far greater, almost 1500k, Ukraine sees the lacks of engineers and tries to encourage students to pick up this career in every possible way.
Nevertheless, the level of education in India struggles to compare to Ukrainian one, as nearly 24% of country's population remind illiterate.
However, it cannot stand close to India, which is the second largest English-speaking nation in the world. No wonder it hosts call centers of the largest international corporations from around the world.
Working with India-based tech specialists can be tough since they have a hierarchical society where arguing with your seniors (read: boss or client) is frowned upon. Usually, it means that you won't get a fair feedback for your idea. They are just going to do what clients tell them to. As a result, you are going to get a bunch of unresolved issues that should have been discussed at the earliest stages of the project.
On the contrary, working with a team from Ukraine would be easier, as their business culture has been acquiring more and more traits of the Western one.
The most important aspect of outsourcing your software project is the company you choose, their location being the top of the iceberg.
It's perfectly okay to start with a location on your search for a perfect outsourcing team, but as you proceed, look closely at what particular companies have to offer, check out their portfolios, go through reviews, and study how they approach projects.
If you look for a company that values client's opinion but at the same time cares about project's quality and success, the IDAP team is just right for you. Contact us!