How Ukraine's IT outsourcers are keeping it business as usual in the face of the country's crisis

Before the current crisis, Ukraine was fast establishing a reputation as a rising IT outsourcing hotspot. How is the industry coping now?
Written by Michiel van Blommestein, Contributor
The view from the town hall in the city of Lviv. Image: Shutterstock

While the crisis in Ukraine continues to disrupt life for the country's citizens, it appears its fledgling outsourcing industry is yet to be tangibly affected. However, concerns exist over a possible military escalation and its impact on the sector, while IT workers, like everyone in the country, have been affected by the tensions on a personal level.

Worth well over €1bn, the outsourcing sector in Ukraine has grown rapidly in the last decade, with the western Ukrainian city of Lviv featuring in consultancy Tholons' top 100 outsourcing destinations since last year.

However, the financial crisis preceding the protests and the violence that followed in the capital Kiev have disrupted exports to the country and many companies in Poland, for example, have already temporarily ceased their operations (worth around €4.5bn) in Ukraine due to the inability of their suppliers and clients there to fulfil their financial obligations.

The Ukrainian IT industry remains, however, in a comparatively good position, as it's delivering (rather than buying) products and services to companies outside the region.

And customers' concerns over instability in the country have so far failed to impact outsourcing businesses, says Oksana Dyminska, a project manager at SoftServe, a large software development company serving American and European customers.

According to Dyminska, clients didn't flinch much when the protests at Kiev's Majdan Square flared up, leading to the departure of pro-Russian president Viktor Janukovich. However, attitudes changed when the current crisis in Crimea took off, as the conflict began to deepen to international levels and Vladimir Putin's Russia became involved.

"Clients voice their concerns in one of two ways," she says. "They ask our programme managers or portfolio managers about our contingency plans and about the general situation at our end. But they also contact us at an individual level, saying they hope we are doing well and voicing support."

She added that everybody knows at least someone that got wounded or killed during the violence in Kiev last month, leaving everyone affected. "I myself lost a friend. He was 29, working at the university as a history teacher."

Forced flexibility

For the most part, it's still business as usual, Dyminska says. "At our locations everything is stable, and there have not been any major issues there. We have been able to deliver normally."

Dyminska herself is based in the city of Lviv, the largest offices the company has in Ukraine. "The company has not involved itself at all in the politics here, and has not issued any declarations of support for one side or the other in the conflict." Backup plans are ready, she says, mostly covering emergency power and networks, and possible measures to ensure engineers can carry on working.

However, the situation is different for individual employees of the company. The Lviv area is the heartland of the protest movements and many citizens had grown fed up with the situation in the country. "Many went to Kiev to protest, taking up vacation days," she says. "They would rent an apartment there, work from there for a couple of days a week and spend the rest protesting. Then they would come home again to their families. I myself would have done it that way, were it not for my small daughter."

The Crimea

The worst case scenario is that the crisis in Crimea results in war between Ukraine and Russia.

For Ukranian companies that would mean that employees being called up to serve in the military, either as officers or reservists. "Then it would be a completely different thing we are talking about," Dyminska says. "We would need to defend our country. This would of course be a worst case scenario, but on the level of IT companies this would be a huge problem as well."

More on outsourcing

Editorial standards