Why these 200

tech companies
and startups
outsource
to Ukraine
Relevant is a software development company from Ukraine
that provides organizations with senior tech talent and product
development expertise to build world-class software.

For 7 years on the market, we have worked with more than 200 tech
companies and startups. Some of them are featured in TechCrunch
after raising millions of dollars in funding. And others work with
global corporations like the Virgin group. We aim for a long-term
partnership and work with some clients for more than 4 years.

We’ve created this ebook for you to get insights and take a fresh
look at software development outsourcing to Ukraine.

relevant.software
Table of contents

Top reasons why companies outsource. . . . . . . . . . . 04

Why is Ukraine the best place to outsource

software development?. . . . . . . . . . . . . . . . . . . . . . . . . 05

How 24OnOff Is Building a Time-tracking

Software In Ukraine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

How is offshore software development price

formed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9
Top reasons why companies
outsource

Living in the 21st century you obviously have heard a lot about the
pros and cons of outsourcing as a global phenomenon. Despite
all the controversies, the companies all over the globe race for
efficiency and ultimately re-evaluate every strategy opting for
the best format to generate their ROI and make their customers
happy. Organizations of different sizes and capabilities take up
software development outsourcing or offshoring for diverse reasons
depending on their business vision.

Companies outsource because:

Business structures get access A substantial cut of the

to a vast pool of talents globally, operational and labor expenses
often not available internally with cheaper and efficient
human capital

The efficiency with a focus on It’s a viable chance for expansion

the core business activities
by delegating additional and
difficult-to-manage processes
to the industry-oriented
professionals
to new market areas and getting
closer to the consumers and
users

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Reduced labor expenses and controlled production costs are
traditionally considered to be driving factors by the business owners
to outsource their development. Ukraine ranked 5th among the top
IT services exporters according to PwC, not merely due to the quality
and scalability of the software engineering and software testing
services, but also due to the development costs in the country that
are much lower than those in the USA, Nordic and Western Europe.

Cutting down production expenditures and staff salaries ultimately

contribute to effective revenue and consequently business
improvements, modernization services, and accelerated company
transformation.

Why is Ukraine the best place to

outsource software development?

Choosing the best destination to outsource software development

may be quite a challenge. It might be a good idea to hire a dedicated
software development team in Ukraine, but is it an excellent one?
As you realize that the success of the project or even the entire
company depends on this decision, it gets even harder to make. That
is a grave responsibility, indeed. Maybe, we can help you with it?

We know you want to consider all options before hiring a dedicated

software development team. So, let’s take a closer look at Ukraine in
terms of its attractiveness for software development outsourcing.

5 relevant.software
Global Recognition in the Tech Domain

Ukraine has gained compelling positions in several international tech-

related rankings. The country holds the 20th position in the Global
Services Location Index by A.T. Kearney. In 2017, the Global Sourcing
Association (GSA) UK named Ukraine United Kingdom’s “Offshoring
Destination of the Year.” Moreover, 13 Ukrainian IT companies
were listed in the Global Outsourcing 100 list by the International
Association of Outsourcing Professionals (IAOP) in 2017.

Other international rankings Ukraine has been mentioned in include:

1st place in the Outsourcing Market in Eastern Europe ranking by

Outsourcing Journal

1st place in CEE by the number of engineers and number 4

globally by Colliers International

1st place by outsourcing volume by CEEOA report

1st place In Science and Technology by The Good Country Index

2nd place Most Master Level Certified Nations by Bench Games

2013

3rd place International Most Certified Citizens by Bench Games

2013

One of the top 20 Offshore Locations in IMEA by Gartner

One of the top 30 World Outsourcing Destinations in 2010-1014

by Gartner

One of the top 50 Most Innovative Countries by The Global

Innovation Index

One of the top 50 In Outsourcing Activities by AT KEARNEY

6 relevant.software
Ukraine in international rankings

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Tech Infrastructure and Community

The tech community in Ukraine is very active. Almost every city

has its IT cluster that gathers around and unites technology
specialists, companies, educational institutions, and local authorities
to develop the local tech environment. The number of smaller,
specialized communities is even more impressive: every group of
Ruby developers, QAs, data scientists, BAs, Java enthusiasts, or UX
designers holds regular meetups, seminars, or conferences.

On top of that, Ukraine hosts some of the largest European tech

events:

The Games Gathering Conference. A B2B conference that’s all

about game development.

The Agile Eastern Europe Conference. This event aims to

promote the world’s best Agile software development and Scrum
project management practices in Ukraine.

Lviv IT Arena. The conference draws the international

community’s attention to the tech industry in Ukraine. IT Arena
shows how many tech experts, talented entrepreneurs, and high-
quality products and services Ukraine can offer to the global
market.

DEV_Challenge. A championship on software development in

three categories: Web, Mobile, and Game.

IForum. The biggest offline conference dedicated to the Web in

Ukraine.
We can proudly say that the Ukrainian IT community is all
about development. And by “development,” we mean personal,
professional, and, of course, hardcore coding.

8 relevant.software
Tech Education in Ukraine

The tech industry is nothing without the people who push it forward.
And Ukraine can boast thousands of talented, professional, driven
people.

The IT Ukraine Association reports that over 20,000 tech students

graduate in Ukraine each year. Ukrainian state universities cooperate
with local IT clusters, making sure that the curriculum of the
technical departments is up to date with the latest tech trends and
business achievements. It’s also frequent for students and graduates
to take courses or internship programs provided by medium and
large tech companies or academies. After two to four months of
training, the best trainees may even receive job offers.

Number of graduetes with technical degrees

9 relevant.software
Quantity and Quality

The Ukrainian IT and software engineering community consists of

166,000 professionals, ranking fourth in the world by the number
of tech specialists. The report by GSA reveals that the number of
people working in IT engineering will reach 200,000 in 2020.
But it’s not only about quantity. SkillValue recognized Ukrainian
software engineers among the world’s best, with an average score
index of 91.26%. Besides, engineers from Ukraine scored an average
of 88.7% across all HackerRank challenges.

Ukrainian engineers are versed in most of the popular (and

unpopular) technologies. Java, С, C#, JavaScript, PHP, .NET – you
name it. You are sure to find every programming language and
technology pro on the Ukrainian market, be it Unity3D or mobile app

10 relevant.software
development, Scala or Magento, data science, or AI.

A poll held by DOU, the nation-wide community of developers,

provides data about the years of experience Ukrainian tech
specialists have on average:

The language barrier is not an issue for Ukrainian engineers.

Almost 70% of them speak English at the intermediate and upper-
intermediate levels, according to DOU.

The Favorite Outsourcing Destination of Global

Companies

No wonder giants like Microsoft, Huawei, Samsung, Ring, and Oracle

have embraced the value of outsourcing to Ukraine and moved
their R&D centers here. The national technology market responds
to global trends by incorporating innovations into the outsourcing
services package. From comprehensive applications and analytical
solutions, up to machine learning and IoT platforms, Ukrainian tech
pros can do it all.

Transparency, trust, and careful consideration of the customer’s

needs, intense focus on excellence rather than average results are
some of the traits that make Ukrainian engineers stand out.

11 relevant.software
Home of the World-Known Startups

Ukraine may not have too many world-renowned startups to boast,

but more and more of them are sprouting each year. PetCube,
Gitlab, YouTeam, AXDRAFT, People.ai, and Earth.ai are the Ukrainian
startups that managed to get into Y Combinator, one of the best
seed accelerators in the US. Other YC alumni include Airbnb,
Coinbase, Dropbox, and more.

The Ukrainian startups that have earned recognition are:

All of them were founded by Ukrainians and built by Ukrainian
developers. By the way, Grammarly has recently become the first
Ukrainian unicorn startup.

12 relevant.software
Excellent Value for Money

If you’re serious about cost efficiency, Ukraine is your call. Look at

it this way: the average hourly rate for a Ukrainian developer varies
from $25 to $49, compared to the $60 to $100 a US engineer earns.
And don’t you think that the reasonable price means lower quality!
Gartner ranked Ukraine number one in Eastern Europe for the price/
quality ratio.

No Fuss with Time Zones and Visas

There are also advantages of outsourcing to Ukraine you may

consider insignificant at first and not fully realize until you start
working with a remote dedicated team. Ukraine is seven hours
ahead of the US East Coast and one to two hours ahead of the time
European countries have (depending on the daylight saving time).
So, by the time you come to the office, your Ukrainian engineers will
probably already have some progress to report.

And although building a remote team in Ukraine sounds, well,

remote, it’s fairly easy to get there. Regular direct flights make
traveling hassle-free, and a lot of foreign citizens, including
Americans and Europeans, can travel to Ukraine and stay there
without a visa for 90 days. If you need a member of your dedicated
team to visit your office, that shouldn’t be much trouble too.
Ukrainians can visit Europe for traveling and business purposes visa-
free for 90 days.

A Favorable Economic Environment

The political instability in the country has had little impact on the

13 relevant.software
current activity of most IT industry players. Although, we should
admit that it does restrain more active development. In the last years,
Ukraine has been putting a lot of effort into making the business
environment more favorable. Since 2015, Ukraine went 20 positions
up in the World Bank’s Ease of Doing Business rating. Paying taxes is
now easier as the country introduced a lower flat rate of 22% for the
Unified Social Contribution tax paid by employers compared to the
previous rates, ranging from 36.76% to 49.7%.

How 24OnOff Is Building a Time-

tracking Software In Ukraine
Our cooperation with 24Onoff started back in 2015, when we were
looking for clients on Upwork. We bided on their project as dozens of
other companies. Being loaded with proposals, the team of 24Onoff
decided to take a trip to Ukraine to meet with potential vendors in
person.

We had a great time meeting with guys where we discussed the

details of collaboration and possible ways of product development,
providing business analysis consultation right away.
So, as you already understood, from dozens of other companies they
choose us, but why? Apart from a personal connection, expertise
and our charismatic team members there were few reasons why they
choose us:

We provided business analysis consultation at the first meeting.

Even in the first letter at Upwork, we asked: “Are you sure you
want to build it this way?”.

From the words of our client, we are keeping communication at a

high level and we are just pleasant to work with.

14 relevant.software
 Price. We weren’t the cheapest, but as our client said, we were
just the golden mean.

Since 2015, we were providing 24OnOff with a dedicated team

that consisted of web and mobile developers, quality assurance
specialists, business analysts, and project managers. In a total of 41
people from Relevant were engaged in the development of their
product.

“ We had the challenge to find trustworthy outsourcing

companies that we could rely on. Previous attempts ended
badly and we needed to find a company that had the
skills, good communication and was fair on price.
We chose Relevant Software because we felt that they
Ole Jørgen understood our business needs. They are very clear in
communication and they execute the projects with the
Næss
same quality as if it was their own. They also come up with
Co-founder, 24onoff
ideas and improvements to make sure that the solution
would be as good as it could be. Give them the really
challenging tasks, the ones that everyone else is struggling
with, and they will get them done.

What is the product about?

24onoff is a startup that helps construction companies with time

tracking and project management. They aim to minimize inefficient
routines, billing delays, and unnecessary paperwork with a platform
tailored for the construction industry.

It helps construction companies manage their resources, have a clear

vision of the current stage of the project, create payrolls and easily
export reports to files.

15 relevant.software
Why did they choose to outsource?

Firstly, they lacked internal tech expertise to build the full-featured

SaaS product. They built the first version of the product by
themselves, but it was hardly scalable to what was planned.
Secondly, Norway doesn’t have so many software development
specialists and it was quite challenging to assemble a team there.
And thirdly, the price, of course. Ukraine still is a cost-effective
destination for outsourcing from western Europe.

The services we provided

Our dedicated team covered the whole software development part

for the 24OnOff, while they handled the product management.
The services our client outsourced were:

Business analysis. Our business analyst worked on detailed

project documentation and consulted the team on future
product and features development.

16 relevant.software
Project management. The internal management of a dedicated
team was handled by the project manager on our side.

Web development. 24OnOff is a SaaS product with the web

version, on which our frontend and backend developers worked.

Mobile development. The development of Android and iOS apps

was handled by our senior Java and Swift developers.

Quality assurance. As we worked on the development, we also

provided 24OnOff with software testing services to ensure it’s
released bug-free.

DevOps. Our team set up a server and gateways monitoring

system to better capacity planning and improve reliability.

24Onoff’s team at Relevant’s office

17 relevant.software
How 24OnOff benefit from working with Relevant
Software

Outsourcing software development has lots of benefits, the first of

which is cutting costs. But what value exactly Relevant brought to
24Onoff?

We were able to provide our client with a dedicated team for

business analysis that helped the company to avoid losses in the
future and build the product the right way. In addition to that,
we allowed founders to sleep well at night, by managing the
development at the highest level and keeping them informed about
the process.

By collaborating with us, 24Onoff was able to fill the talent gap and
acquire unique tech and product development expertise they lacked.
Our development team integrated into the company life, becoming
it’s a true part and competitive advantage.

In short, here are the benefits of working with Relevant:

Talented experts.

Business analysis.

Great communication.

Cutting costs.

Dedication and interest of team members.

18 relevant.software
How is offshore software
development price formed?
How to get maximum quality and efficiency at the minimum cost?
That’s the question that bothers many business owners. You want to
bring your idea to life before someone else comes up with something
similar, but you need to do it right.

One way is to assemble an in-house team. This would include

recruitment, onboarding, planning, management, accounting,
and all that jazz. You may need a bigger office with a few more
workstations. In other words, it’s going to require more money and
more time, which you don’t necessarily have.

The other way is to outsource the development team. Here’s how

it works. You partner up with a foreign contractor and they do all
the work for you. Many companies go for this option because it’s

19 relevant.software
thought to be faster and more cost-effective compared to having
more employees locally. But is it as cheap as it seems?

Imagine that you’ve partnered up with a Ukrainian software

development team. Here is what you are paying for:

Office

The first and most obvious factor that makes up the price of offshore
software development is the cost of office space and related
expenses. This includes rent, furniture, technical equipment, office
supplies, food, and drinks (water, coffee, tea, cookies/fruits).

Even if the company assembles remote teams, they still need the
office to do it. For example, here at Relevant, we have specialists
working with us in-house, but we also have access to a large talent
pool of freelancers in case our clients need extra brains.

20 relevant.software
Hiring

Every client has unique needs, and when it comes to gathering

development teams, it’s always a process with multiple stages. From
figuring out how many specialists the client needs to conducting
multiple levels of interviews, there has to be someone to take care of
it all.

That’s why software development outsourcers usually have several

recruiters working with the team full time and getting paid for
their expertise. Without them, it would be impossible to assemble
a qualified team so fast and integrate into the clients’ projects
smoothly.

Vacations

Let’s not forget that we’re working with real people. And even
though some of them are super motivated to work tirelessly 365

21 relevant.software
days per year, it’s not a healthy story. The developers are working
with the clients overseas, but they are treated like regular full-time
employees with all the perks and days off.

The company is legally required to provide time off to employees,

which includes state holidays and annual vacations. Also, whenever
someone is not feeling well, it covers a certain amount of seak leaves.

Professional development and training

Software development is a skill. The new technologies and solutions

emerge all the time, so it’s super important to keep it sharp. Also,
since Ukraine is not an English speaking-country, ensuring that the
team speaks the language at a decent level is a must. That’s why
many IT companies pay for their employees’ language courses.

English lesson in the Relevant office

22 relevant.software
Every respectful offshore software development firm invests in the
education of their employees. Otherwise, they won’t be able to
compete on the market. Here at Relevant, for example, we make
sure our specialists get access to the latest knowledge. We arrange
mentorship programs for new hires, hold internal lectures, and have a
full-time English teacher in-house.

Taxes

If we are talking about Ukraine, the cost of living here is much lower
than in other European countries, not to mention the United States.
That said, the taxation system here is generally favorable for the
IT-sphere. You’ll find our local corporate taxes pretty comfortable
compared with yours, so it won’t be as much of a financial burden for
you as it would if you had an in-house team of the same size.

Non-tech employees

We’ve already mentioned HR managers and recruiters, but they are

not the only not-tech employees working in the organization. There
are also project managers, accounting staff, cleaning, and other
office maintenance services. All these people ensure the smooth
work of the entire office.

Accounting work

One of the best things about working with an offshore software

development company is simplicity. When you have an in-
house team, you are the one dealing with employee salaries and
accounting. But if you are working with an outside contractor, you

23 relevant.software
don’t have to worry about anything. As a client, you will simply
receive an invoice. All the behind the scenes work will be done for
you.

Why cost shouldn’t be your primary driver

What do you mean, you may ask? Why else would I need to
outsource if it won’t save me any money?

First of all, outsourcing software development is going to cost you

less anyway. It’s just that the price shouldn’t be the most important
factor in choosing a contractor among several alternatives.
The vendor that offers the lowest cost on the market cannot provide
the best quality by definition. From what you can tell after learning
about all those pricing factors, software development outsourcing is
a complex service. Therefore, every aspect plays an important role in
the outcome.

Lowering the overall rate would require significant trade-offs in

certain aspects, and it’s a sure way to end up with poorly qualified
developers who can’t seem to get on a call with you in real-time,
have difficulties communicating in English, and have nothing in
common with your company culture. We don’t need to mention that
as the result of such collaboration, you’ll lose more than you gain, so
be wise about it.

24 relevant.software
Interested
in outsourcing
to Ukraine?
Contact us to discuss the cost and ways
of cooperation.

Email us at welcome@relevant.software.
Or fill the form at www.relevant.software