ORCID ID: 0000-0002-2899-3695
Taras Shevchenko National University of Kyiv, Kyiv, Ukraine
PREREQUISITES FOR THE DEVELOPMENT OF OUTSOURCING IN UKRAINE: SOCIO-GEOGRAPHICAL ANALYSIS
Outsourcing, particularly in the field of IT, is considered one of the key economic activities in today’s globalized economy. It can be called a special form of doing business. The article includes the definition of the process of outsourcing, and considers the reasons for its formation. The consequences of the outsourcing practice were briefly described. The article considers the origin of outsourcing in its modern form and provides a brief analysis of its features. The most prominent business practices, that are usually associated with outsourcing (as opposed to its perception only as “offshore programming”) are described. Typical outsourcing services were named. The process of choosing the outsource destination, from the standpoint of a client company, is outlined. The study analyzes the factors that led to the attractiveness of Ukraine as a market for IT outsourcing services. The importance of geographical location as a factor that can influence the choice of a country as a location for the productive forces of foreign companies is highlighted. At the same time, natural resources play a secondary role in relation to the actual geographical location. The geographical position of Ukraine is considered a factor that significantly increases the attractiveness of working with Ukrainian IT companies from the customer’s point of view. Possible negative consequences of outsourcing choices, based purely on geographical location as the most prominent factor were mentioned, in the context of possible cultural and language incompatibility in amongst the very distant cultures in question. Work schedule compatibilities between Ukraine and the greatest outsource spenders in the world – countries of Western Europe and Northern America are highlighted. The main reasons for the successful growth of demand for the services of Ukrainian IT companies are outlined. The image of Ukraine as a popular outsourcing destination is highlighted, and its growth in the last three years is briefly considered. The income of IT workers in Ukraine, Europe and the world was briefly analyzed as a factor that directly affects the attractiveness of outsourcing in Ukraine. The issue of staff rotation in IT projects is briefly considered a factor that increases the competitiveness of Ukrainian companies in the global market. Statistical data on the growth of the Ukrainian IT sphere was briefly analyzed, along with its projected growth.
Keywords: outsourcing, IT, profits, expenses, intensive development, competitive price, economic and geographical location of Ukraine.
- An Executive Guide to Understanding, Planning and Exploiting Successful Outsourcing Relationships Jean-Louis Bravard, Robert Morgan. Pearson Education, 2006. – 230 p.
- Business Insider. Retrieved October 2020: https://markets.businessinsider.com/ news/stocks/the-5-best-countries-to-outsource-to-in-2019-plus-the-top-14- outsourcing-companies-data-entry-agencies-1028079868
- Danyliuk T. I. & Mokhniuk A. M., (2020). Autsorsynh u systemi upravlinnia pidpryiemstvom [Outsourcing in a production management system]. Economy, finances, management. Vol. 2 (52). Vinnytsia: p. 83–93. (In Ukrainian)
- Global outsourcing spending by regions. Statista. Retrieved December 2020: https://www.statista.com/statistics/1089825/global-outsourcing- spending-region
- Hussain W., (2012). Corporations, profit maximization and the personal sphere. Economics and Philosophy, Vol. 28, Issue 03, November, pp. 311–331. Retrieved from: http://journals.cambridge.org/abstract_ S0266267112000260, DOI: 10.1017/S0266267112000260
- Jensen, M. C. (2001). Value maximization, stakeholder theory, and the corporate objective function. Journal of Applied Corporate Finance, vol. 14: p. 8–21.
- Kearny consultancy agency. Retrieved from: https://www.consultancy.uk/ news/3169/the-top-40-countries-for-business-process-outsourcing
- Kichuk O. S., (2011). Suchasni formy intehratsii promyslovykh pidpryiemstv [Modern forms of industrial enterprises integration].Herald of socio-economic studies, vol. 2 (42). Kyiv: p. 212–216 (In Ukrainian).
- Pershko, O., (2011). Autsorsynh ta insorsynh v upravlinni intehrovanym formuvanniam [Outsourcing and insourcing in the management of post-merger integrations]. Collection of scientific works of the USFSU, № 1. p. 449–455 (In Ukrainian).
- Razumova O. O.& Kiptenko V. K., (2021). Peredumovy rozvytku it- autsorsynhu v Ukraini [Prerequisites for the development of IT-ousourcing in Ukraine]. The driving force of science and trends in its development. International scientific and theoretical conference, vol. 5, p. 144–145 (In Ukrainian).
- The country that codes it Industry in Ukraine. 2019 Market Report. Retrieved November 2020: https://s3-eu-west-1.amazonaws.com/new.n-ix.com/ uploads/2019/08/29/Ukr-report-29.pdf
- What is the Average Software Engineer Salary Around the World 2020. DAXX. Retrieved December 2020:https://www.daxx.com/blog/ development-trends/it-salaries-software-developer-trends
- Zahorodnii A. H. & Partyn H. O., (2009). Autsorsynh ta yoho vplyv na vytraty pidpryiemstva [Outsourcing and its influence on the expenditures of the enterprise] Finances of Ukraine. № 9. – p. 87–97. – Retrieved from: http://nbuv.gov.ua/UJRN/Fu_2009_9_10 (In Ukrainian).
Razumova O., 2021. Prerequisites for the development of outsourcing in Ukraine: socio-geographical analysis. Visnyk Kyivskogo nacionalnogo universytetu imeni Tarasa Shevchenka, Geografiya [Bulletin of Taras Shevchenko National University of Kyiv, Geography], 3/4 (80/81), 77-83 (in Ukrainian, abstr. in English), DOI: 10.17721/1728-2721.2021.80-81.12
Received Editorial Board 28.05.2021
Accepted for publication 09.11.2021