Q&A Outsourcing software development to Ukraine

Tetyana Berezenska, Head of Legal and Business Development at Bitcom Systems on 2017-12-23

Outsourcing software development to Ukraine has gained a huge volume over past decades. It’s no surprise, since the qualification level of Ukrainian engineers is very high, while the rates are considerably lower than those in Western countries. Many Europe and US based companies considering outsourcing often ask similar questions, as collected here. Briefly, outsourcing does not pose as many risks, as perceived, while it is a matter of learning how to apply some simple project management rules.

1. How do you keep track of the project, when outsourced engineers join the team?

It is a common bias that outsourcing poses the risk of losing grip over the project. However, as practice shows, IT project delivery with a dispersed team is not hugely different from the classic in-house development. Both development models use the same management tools. Similarly to the in-house development, the distributed dev team will deliver expected results, when necessary management practice is in place, such as timely collecting of detailed requirements, determining user stories, assigning clear roles and tasks, setting short-term and long-term objectives etc. In addition, it is common practice to apply agile/scrum methodology, which helps achieve anticipated goals within a predictable timeline.

2. How do you share knowledge within a distributed team of engineers?

The distance between the in-house and outsourced development teams is erased through popular communication, task and project management tools. Fully-qualified project management coupled with detailed documentation facilitates effective knowledge transfer. Besides, outsourced developers are willing to participate in on-site trainings, which considerably helps make onboarding smooth.

3. What communication tools do you use?

Our development team usually communicates with customers through Skype or Slack. We host regular conference calls to do standups and demos.

4. What tools do you use for task and project management?

We use Trello and Jira for task management and reporting. However, if the customer has their own processes, our engineers can easily adapt to them.

5. How do you manage projects with outsourced team members?

There are several options available, depending on the cooperation model. If Ukrainian engineers join the customer’s existing team, then the customer’s in-house project manager usually heads the team. And if Ukrainian developers work on project basis and are completely in charge of some or all stages of product development, then it makes sense that a Ukrainian project manager supervises the overall process. However, a mixed project management is sometimes also necessary to eliminate risks associated with miscommunication and some cultural barriers.

6. What languages do Ukrainian IT specialists speak?

The majority of IT specialists in Ukraine have very good English skills. So, all communication is normally done in English. While engineers usually speak English, other IT specialists, like PMs, BAs, can also have good German, French, Spanish speaking and writing skills.

7. How qualified are Ukrainian engineers?

The Ukrainian IT industry counts now around 100 000 IT specialists. A vast majority of them have a University BSc or MSc degree in Applied Mathematics, Computer Science or other related fields. Apart from universities, IT education is provided by a variety of respectable training centers. Many engineers also receive popular certifications as a proof of their qualification in a specific area.

8. How long does it take to recruit a developer or a QA engineer in Ukraine?

Headhunting is on the rise; however, recruitment in Ukraine still takes much less time compared to Western countries. If you are looking to hire an engineer skilled in top programming languages and frameworks, it takes around 3-5 weeks to recruit an employee. If someone with very unique skills is needed, it requires more time to fill the position.

9. How loyal are Ukrainian engineers?

Ukrainian engineers usually work not less than 1-2 years for their employers. And in order to build long-lasting relationships, companies offer a variety of employee retention incentives. Therefore, many engineers work for the same company for 3-5 years.

10. How are intellectual property issues resolved?

Prior to starting a project, an engineer signs an intellectual property agreement, where it is clearly stated that intellectual property rights are transferred to the Customer.

11. What other agreements are signed?

First of all, a contract for software development is concluded. It can be consultancy agreement, contract for providing services in software development etc. Besides, a NDA is signed to protect the customer and regulate all aspects related hereto.

Typically, either of the two legal forms is used in Ukraine – Limited Liability Company or Private Entrepreneur. Both of them are legally entitled to be the counterparty in the agreement having equal rights to provide software development services, issue invoices, receive payments, provide due reports and acts of performed works, etc.
However, due to loyal taxation of Private Entrepreneurs (single tax of 5% on the profit), the agreements are usually concluded with these individuals, rather than with the companies.

P.S.: Not only is outsourcing cost-efficient, it also frees resources for more strategic business planning and helps focus on important aspects of product promotion.
Should you have other questions, please do not hesitate to contact us anytime.

Think globally, concentrate on your business idea, and Bitcom Systems will take care of the technical side of things.