Crisis in Ukraine: Supporting Our Partners and Clients

Every day seems to bring more disturbing news of death and destruction from Ukraine, where Russian forces continue to attack cities across the country.

Accelerance has a direct personal connection to the crisis: We work with four outsourcing partners based in Ukraine. They collectively employ over 3,000 people, and it is heartbreaking to see colleagues we have known for years forced to flee their own country or take up arms to defend themselves.

As you would expect, some of our partners have literally gone offline, cut off from the internet and the outside world. Most of our partners who are in the less-devastated western region of Ukraine are still operating and in contact with their clients, although the situation is changing so rapidly it is unclear how long that will last.

For our partners, the threat of invasion by the Russian army triggered their business continuity plans well in advance of the start of hostilities on February 24, 2022. 

Those contingency plans included making all computer code and associated intellectual property available to their clients via secure cloud platforms.

One of our outsourcing partners has made plans to evacuate all 300 of their Ukraine-based employees' families out of the country to Poland and other European countries. All males of fighting age cannot leave Ukraine. Many employees have chosen to remain in Ukraine, so they can help in defending their country.

Solidarity and Support

Our partners in Ukraine have shown an incredible commitment to their clients who likewise have been hugely supportive of their colleagues and friends facing such adversity on the ground there.

“We are very thankful to our clients, who provide great support to their engineering teams in Ukraine during these tough times. Kind words, flexibility in operations, prompt payments – it all helps a lot!” an executive of one of our partners, a software developer with significant operations in Ukraine, told us.

“It’s great, there is such a level of trust, and Ukrainians have already proven they can be a very reliable business partner even in such unthinkable circumstances,” he added.

Another CEO of one of our software outsourcing partners in the city of Lviv took to LinkedIn to give heartfelt thanks to those who have supported him and his company in its darkest hour. 

“To all of our Ukrainian employees, you are heroes, stay safe. To all of our support staff in Ukraine and Poland, you are #heroes to work 24/7 under dangerous conditions for saving our people and relocating families to Poland,” he wrote.

“To all of our international clients. You are #heroes for your tremendous understanding, support and encouragement of our people. Deep thanks for my #heroes.”

None of our clients are abandoning their partners in Ukraine. Some clients have an urgent need to deliver projects; they will have to seek alternative arrangements to get the work done. But every one of them expresses commitment to re-engage, eventually, with their Ukrainian outsourcing partner when hostilities have lessened and some normalcy returns.

The question is - when will that be? There is fear that the situation in Ukraine will deteriorate a lot further before it improves. This is a massive tragedy for the people of Ukraine and for its business community.

Dealing with Disruption

As the Wall Street Journal reported, Ukraine, known in the industry as a technology powerhouse, has grown into a major international hub for IT outsourcing  services:

• Ukraine’s IT exports increased an impressive 36% to $6.8 billion last year. 

• Ukraine now has up to 100,000 export service workers, mainly employed in software engineering and other tech services, according to Gartner estimates. 

• Outsourcing companies account for the largest share of the Ukrainian IT service industry.

The Russian aggression towards Ukraine threatens all of that progress and disrupts the international trade and collaboration that is such an important component of the software development industry.

Tough decisions may lie ahead for those US clients who have software outsourcing partners not just in Ukraine but in Russia or in Belarus, its ally. The international sanctions against Russian individuals and companies have sent a clear sign from the US government and others that Russia is to be shunned.

As a result, many of those clients will likely need to start searching for new development partners to replace undesirable alliances.

All of the major US tech companies, from Apple and Microsoft to Oracle, IBM and Google have either suspended new sales in Russia or discontinued services entirely. 

If you are still working with partners in Russia and Belarus, our advice would be to look for alternative arrangements as soon as possible. It may be some time before those countries are again considered legitimate outsourcing destinations. 

Even if sanctions don’t apply to the business partners that you work with, there’s a clear moral imperative to cease enriching Russia and Belarus while Russia is waging war on Ukraine.

Higher Development Costs Likely

The conflict in Ukraine will only put pressure on the ability of the software development industry to meet demand in an incredibly tight labor market. Offshoring work from US companies has already shifted to other outsourcing destinations in Europe, India, Asia and central and south America.

This dynamic will likely have implications for labor rates with reduced supply pushing up prices at a time when companies everywhere are already paying top dollar for software engineering expertise - if they can even find the right people to hire.

At Accelerance, we have access to a large and diverse network of partners and their rates in key world outsourcing regions. We have can offer insight into ways to manage development costs increases, should they hit. Our proprietary research provides up-to-date comparisons of region rates and location considerations: Download our annual global software outsourcing trends and rates guide to explore options.

Companies who have lost software development outsourcing services from Ukrainian companies find their engagements in dire straits. Depending on the development project and its phase, it can take weeks or months to replace key engineering staff and start a stalled project moving forward again.

Already, our certified global outsourcing network is managing emergency demand due to the loss of Ukrainian-sourced software development teams. Our global talent pool across 35 countries has helped us to quickly find alternative partners for their clients to keep their projects on track in the face of the Ukraine conflict. If you are facing disruption to services yourself, please get in touch. We’ll do everything we can to get you the assistance you need, and it takes us 10 days to identify suitable partners.

What has unfolded in Ukraine is a good reminder of the need for effective business contingency plans for when things go wrong. Other outsourcing destinations, from time to time, also face instability, though rarely as dramatically as we’ve seen in Ukraine. That’s why Accelerance helps our clients with future-proof scenario planning before you need it, to lessen the impact of potentially harmful business disruptions.

Thinking through a Contingency Strategy

Now is the time to be reviewing your business continuity and contingency plans. Ensure your plan is scaled right for your business needs. “IT leaders need to walk the fine line…between minimizing geographic risk and creating unmanageable complexity," CIO points out.

Offshoring will remain an essential part of the software development mix for thousands of US organizations. In the short run, many companies are pivoting to Asia and Latin America for more stable, alternative sources. Accelerance, through our unparalleled world view of tech sourcing, can help you weigh your options.

But we will be leading people back to Ukraine as soon as we safely can. In the meantime, we’ll also do everything to support the business and wellbeing of our Ukrainian colleagues engaged in a fight for the freedom of their country

Accelerance is eager to assist any company - whether current clients and partners or not  - that is struggling with the fallout from this international crisis. With decades of on-site, worldwide business experience, we have a unique perspective in minimizing risk and impact from business disruptions. We can offer personal perspective based on our longtime relationships in Eastern Europe.

Looking for guidance? Set an appointment with an Accelerance trusted advisor. We're here for you with expert advice from the premier global software outsourcing authority.^®