Nazariy is Chief Strategy Officer and member of the Board of Directors of N-iX, a European provider of software progression services.
Central and Eastern Europe has long been one of the most sensitive generation outsourcing destinations for companies in North America, the UK and other European countries. With large pools of talented engineers, the region is home to more than 2 million software developers. .
Over the past 3 years, the regional IT industry has experienced phenomenal growth, driven by the growing global talent call. 2022 was intended to be another year of positive momentum, but in February, the shock in Ukraine triggered an immediate overhaul of the outsourcing market across the CEEC region.
Ukrainian continue the delivery.
While the hypothesis about an imaginable shock erupted at the end of 2021, almost all of Ukraine’s IT corporations began preparing their business continuity plans. -Temporary interruptions in your facilities for some customers. But the point of service provision temporarily returned to the general points.
According to feedback from Ukraine’s major IT players, most of its consumers not only continued their cooperation with Ukraine, but expansion increased.
The ban for men aged 18 to 60 was somewhat less expected in the PCOs. Still, most of the country is safe and workers have a stable delivery point.
Ukrainian IT corporations are expanding into Europe and markets.
Due to the intense skill festival in Ukraine, many corporations were already making plans to expand their delivery centers to European and Latin American countries. The crash has only accelerated those plans.
This trend is very likely to continue, developing Ukrainian tech corporations on an even larger scale, while giving consumers more flexibility. However, prices will be higher if they marry sites in the EU, such as Poland or Romania. Otherwise, for the real global players, Ukrainian corporations would have needed to mirror the “success stories” of the industry, such as Globant or Endava, which they controlled to identify a global presence on other continents.
According to many Ukrainian industry players, after five months of conflict, the absolute majority of existing and new consumers still prefer Ukrainian sites to those in Central Europe. The length of the Ukrainian IT industry cannot be ignored without problems: about 141,000 Ukrainians IT specialists are engaged in the export of IT services. In addition, many consumers now that Ukraine will register in the EU, which could remove some of the limitations of outsourcing outside the EU.
This is the end of generation outsourcing in Belarus and Russia.
Belarus and Russia were participants of generation specialists for foreign clients. But both countries are seeing an increasing number of their tech skills go.
The exodus of IT specialists from Belarus began in 2020 amid a questionable presidential election that sparked large protests across the country. By then, between 5% and 10% of all specialists had left. The IT market has disappeared since 2020.
The highest rate of IT corporations relocating their workers lately is in Russia. Many of the biggest players have already said they will close offices in Russia, adding EPAM, Grid Dynamics and Luxoft, to name a few.
Few features will be in place for the prompt relocation of Russian and Belarusian programmers, given the visa requirements for most countries. The two most popular destinations for Russians are Georgia and Armenia, but the influx of other people has already increased housing costs. Many are now hunting Kazakhstan, Azerbaijan and Turkey.
What long-term for subcontracting activities in the ECE region?
Changes in the IT industry landscape of Central and Eastern Europe would bring some changes. Here are 4 methods for countries for long-term industrial operations in this region.
1. Please note that despite the conflict, Ukrainian business methods remain sound.
Since Ukraine offers high-quality facilities and has a huge skill set, most consumers who already outsource their software development to Ukraine will likely continue to do so. Moreover, in the long run, if Ukraine were to indeed join the EU, it would only improve the position of its players in the IT industry.
2. Companies that used to outsource in Russia have to look for new sites, while the long-term Belarusian industry is questioned.
Many countries that once outsourced to Russia need to replace their software outsourcing destination due to regulatory, security and reputational risks.
3. La Central European industry will benefit from the influx of scientists and computer companies from Eastern Europe.
Many IT corporations in Eastern Europe have declared plans to expand into Central Europe. At the same time, many Eastern European engineers have also settled in those countries. The Central European IT industry will indeed take advantage of the increased diversity and expertise those corporations will bring to their new locations. The same will apply to foreign consumers who are lately software partners in Central Europe.
4. Foreign corporations look for outsourcing partners that have a detailed Business Continuity Plan (BCP).
As most outsourcing partners are located in volatile regions, customers expect potential disruptions in service delivery. Therefore, we strongly recommend that you pay attention to BCP’s plans. As we have observed, most of Ukraine’s largest IT corporations had detailed BCPs that they effectively implemented.
With the right strategies, your company can manage outsourcing in the CEE region.
Despite significant adjustments in populations and cases, corporations that ultimately make an investment or will invest in employment in the CEEC region can continue to effectively outsource high-quality talent. customers for IT outsourcing in this region remain strong.
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