Ukrainian IT Industry Brought a Record $2 Billion Export Revenue in Q1 2022

The IT industry’s export earnings for the first quarter of 2022 amounted to $2 billion according to the National Bank of Ukraine. During the same period in 2021, the IT export generated $1.44 billion. Despite the war, the tech industry revenue is growing – in the first quarter of 2022 it has increased by 28% compared to last year according to the IT Ukraine Association.

The war forced many IT companies to evacuate to safer areas and suspend business for some time. However, even in such tough conditions, the IT sector has demonstrated an extremely high resilience in the new challenging environment. This was achieved to a large extent over the company’s had been getting ready for a possible full-fledged Russian attack and the instant implementation of BCP plans.

Foreign clients continue to cooperate with IT companies from Ukraine, the IT Research Monitoring survey data proves. Based on it, 72,3% of respondents keep working on projects with the extension of timelines. Another 29.2% of the surveyed received new orders during the first month of the full-scale Russian invasion. Lviv IT Cluster member companies pointed out the customers’ favorable attitude and support from abroad who appreciate the high quality of the Ukrainian IT services.

Lviv IT Cluster, which has six years of experience in industry research, launched the IT Research Resilience project to closely analyze the impact of war on the IT industry. It aims, in particular, to explore how the war is changing the Ukrainian IT market and where new tech hubs are likely to emerge. Data collection is ongoing, and the results will be available to Lviv IT Cluster member companies in late May.

“IT Research Resilience will provide the most up-to-date information on how the IT industry has changed after February 24. As part of the project, we will survey over 6,000 representatives of the tech industry. Our verified methodology, adapted to the conditions of the war, will provide a systemic and scientific approach and a basis for forecasting the further scenarios for the industry development,” comments Stepan Veselovskyi, CEO of Lviv IT Cluster.

IT Research Resilience will also provide representative data on migration intentions and plans of IT professionals, given different possible scenarios for the war ending. The project will study the structure of companies in terms of human capital during the war and the changes that happened in the labor market after February 24, as well as a temporary economic effect on the regions to which IT specialists relocated during the war.

As part of IT Research Resilience, a team of analysts, futurists, economists and industry experts will work out an analytical forecast for the Ukrainian IT industry. It will enable companies to quickly adapt to new realities and build effective strategies during and after the war.

Mobilization, customer support and work. How russia’s invasion impacted Ukraine’s IT industry

The survey conducted by Lviv IT Cluster examines how the war impacted the tech industry in Ukraine. In the IT Research Monitoring project, over 200 companies were interviewed about working in new conditions — relocation, business activity, mobilization, employee support and volunteering.

IT Research Monitoring is a short systematic survey of IT companies that are members of the Lviv IT Cluster.  Each survey focuses on a particular topic. This survey focuses on how companies operate during a wide-scale war. The survey was conducted from March 4-7, 2022.

Restoration work process and cooperation with clients

Since the first day of the wide-scale Russian military operations in Ukraine, IT companies have focused on several areas such as relocating employees in war zones, maximizing business continuity, communicating with customers, and supporting the army.

As of the first week of March, 98.5% of surveyed companies say they were still operating. 48.4% of respondents indicated that the volume of business activity decreased due to the Russian invasion. However, the figures of those who noted that the volume of work has not changed since February 24 remains high – 42.8%. 7.8% of respondents said that business activity even increased during this period.

Lviv IT Cluster companies note the favorable attitude of customers from abroad. From the first hours of the attack on Ukraine, customers were deeply concerned about the situation, offering help and support. Only 27.7% of companies received notifications from customers about the suspension or transfer of projects due to the situation in Ukraine. However, the percentage of terminated contracts reaches only 15.4%. While 72.3% of respondents said they continue to work on projects with a continued timeline. Another 29.2% received new orders after February 24.

Mobilization, relocation and support of employees

Even before the start of Russia’s wide-scale invasion of Ukraine, IT companies were preparing BCP plans. Support and assistance in developing and implementing a business continuity plan for companies is also provided by Lviv IT Cluster which has created a special team for this purpose.

According to the IT Research Monitoring survey, 63.1% of respondents had offices or employees in the regions of Ukraine that were attacked by Russia’s invasion on February 24. Therefore, one of the priority areas was the relocation of people to safer cities. Relocation assistance was both financial and organizational. 59% of the surveyed companies provided organized departures of employees and their families. To support employees, 64.6% of companies have paid salaries in advance. In addition, some companies have introduced one-time financial assistance to either all employees or those moving from hazardous areas. The average amount of compensation was $957.

In addition, the companies revised the policy of payments to employees who joined the Armed Forces, Territorial Defense, or volunteered. In particular, 26.7% of the surveyed companies kept their full salaries and another 26.7% of the surveyed companies kept half of the salaries of those who were drafted into the Armed Forces of Ukraine. Most companies have developed their own compensation option, depending on the area of ​​defense and assistance involved.

According to an estimate based on the results of the IT Research Monitoring survey, more than a thousand employees of the IT industry were drafted into the Armed Forces of Ukraine or joined the Territorial Defense. 1,710 people were registered in the army. These are data as of the time of IT Research Monitoring – from March 4-7, 2022.

Volunteering

Even before the Russian invasion of Ukraine, the IT community actively supported the army and specialized funds. The result was hundreds of millions of hryvnias transferred to the needs of the Armed Forces.

The wife-scale war has only intensified the assistance and support provided by IT companies to Ukraine. According to the survey, on average 36% of employees are also involved in volunteering in addition to their main activities; an average of 5% of employees are fully involved in volunteering. Within each volunteering company, all employees have been engaged.

Lviv IT Cluster will continue to conduct short surveys of IT companies to understand what is happening in the industry and how it reacts to the war. In particular, the Lviv IT Cluster is working on a new IT Research Resilience 2022 study, which will focus on a study of the IT market in Lviv and other regions where IT companies have moved due to the war.  In particular, the Cluster will study the current number of IT companies, conduct profiling which will give an idea of ​​the new market landscape and its features, determine the socio-demographic profile of the IT specialist, and much more.

5 Global Outsourcing Trends in 2022

The outsourcing industry has become one of the fastest-growing sectors in the global business ecosystem. Today’s outsourcing market is fast-paced, adapting to the global challenges of the times like the Covid-19 pandemic, climate change, worldwide political and economic power shift, and other challenges that organizations have to deal with. More companies choose to outsource services for a number of reasons, from saving costs to access to the best talent pools globally. Businesses focus on keeping up with the latest outsourcing trends for faster adaptation, better resource management and company’s productivity optimization. Let us take a look at the outsourcing trends in 2022 that you should know about.

Rise of Cloud Computing 

Businesses consider cloud services a good outsourcing tool, simplifying the outsourcing process. Cloud-based technologies being flexible and expandable are one of the main outsourcing instruments. Cloud computing enables the sharing of information, being always online and available. Cloud-based services will continue to increase. According to Gartner, cloud spending will grow 21,7% and reach $482 billion in 2022. The outsourcing industry has shown an increased demand for cloud-based technology. Predictions show this trend will carry on in 2022, as the sector continues to benefit from this technology use.

AI technology and RPA

Robotic Process Automation (RPA) allows outsourcing companies to automate internal and external processes, and manage robots to carry out simple tasks. The demand for RPA increased as companies realized they can save money by using robots to perform repetitive tasks and leave only critical tasks for human interaction. Implementation of RPA and automation that brings great benefits remains the key focus of the outsourcing companies and is expected to continue as a trend in the near future.

Robust Cybersecurity

Outsourcing is prevalent in security threats and demand to secure data is one of its top priorities. Outsourcing grabs some risks for businesses because of trusting data to a third party, making cybersecurity issues one of the top concerns for companies. Data has become the most valuable resource and assuring its security – a trend and a necessity. Therefore, it is important to choose a reliable company which takes data and outsourcing process security. According to Deloitte, 64% of businesses plan to focus on security capabilities to address security threats and ensure infrastructure reliability. In times of cyber attacks strengthening cybersecurity will help to earn the trust of customers and feel more confident at the market. Most outsourcing companies are following multi-level security like multi-factor authentication and strict compliance with GDPR standards to prevent cases of a security breach.

Strategic Partnership

Recent years have shown that the outsourcing industry is increasingly more focused on partnership. Companies prioritize growth over cost-cutting, hence emphasizing the value of skills. Outsourcing companies tend to build global teams to ensure seamless collaboration and the trend is expected to play a bigger role in 2022. The agile, highly responsive way of cooperation could increase in value in the near future and beyond.‌ As long as one vendor satisfies the needs of the outsourcing company, more and more companies working with outsourced staff strive for long-term collaboration and prefer a strategic partnership. 

Remote Work and Global Outsourcing

With the pandemic’s start, the work environment has changed dramatically – more and more companies are replacing traditional office-based positions with a flexible, remote workforce. Businesses had to restructure and rapidly move to remote mode and only afterward realized all the benefits and new opportunities. Remote work enables hiring the best talents from all parts of the globe; developed technological and cloud infrastructure allows executing the workflow anytime and anywhere, making remote outsourcing a smart choice for businesses. Despite the pandemic slowdown, remote work remains a continuing global trend in 2022.

Almost all industries take to outsourcing to perform important projects. In the era of digitalization, developed technologies, software and apps, outsourcing with its high flexibility and no geographical borders, access to a vast pool of specialists and narrow specialists, short-term collaboration within one project and even one task or long term cooperation are the benefits attracting more and more supporters. The outsourcing industry continues to develop and grow adapting to the challenges brought by the present times. 

Today’s outsourcing market is fast-paced, adapting to the global challenges of the times. Businesses focus on keeping up with the latest outsourcing trends for faster adaptation, better resource management and company’s productivity optimization. Let us take a look at the outsourcing trends in 2022 that you should know about.

Volunteer, Donate and Join the Armed Forces: How Lviv IT Cluster Members Work in the Wartime

The occupation war of Russia against Ukraine continues. From the first days of the war, Lviv IT Cluster, which unites almost 200 IT companies and more than 25,000 IT specialists, has joined to support the Armed Forces and all those who need help now. The Cluster has opened five centers for internally displaced persons and a humanitarian aid collection center for regions affected by hostile attacks. The main focus is on collecting and transferring equipment, personal protective equipment, and medical supplies for the militaries fighting in the hottest spots of Ukraine. IT professionals are working to strengthen cybersecurity in the country. A team of communication and digital marketing specialists has been set up to defend the information front, fight fakes, and spread the truth in Russia and Belarus. The Cluster has launched the Tax Pay Forward initiative to pay the Single Social Contribution and the Single Tax in advance. This will help the state, and local authorities, which form the rear for the Armed Forces of Ukraine and Territorial Defense Forces, and tackle humanitarian challenges.

All Lviv IT Cluster member companies actively participate in the struggle for Ukraine’s democracy and sovereignty. They donate millions of hryvnias to support the army, enter the volunteer movement, join the Territorial Defense Forces and the Armed Forces of Ukraine, take care of their employees by relocating them and, despite everything, try to continue work to maintain the economic strength and stability of Ukraine. Many companies in the community stopped cooperating with any Russian business not to support the occupying country financially.

Lionwood.software company provided its office with everything needed for a temporary stay, accommodating 460 people, including 200 children. Many companies help employees who are forced to move from other cities. Grid Dynamics company equipped more than 100 beds in their office, a playroom for children and a room for cats, Symphony Solutions – part of the Lviv office turned into a shelter, beds were placed in all the company’s meeting rooms. EPAM has set up a shelter on the basis of its office in Lviv for the employees, their families, and relatives from all over Ukraine to temporarily settle down and recover. Similar settlements have been opened in Ivano-Frankivsk and Chernivtsi.

Before the Russian invasion, N-iX donated UAH 900,000 through the Come Back Alive Foundation. Employees of the company are actively involved in volunteering, donating money to help the army, and participating in cyber warfare. N-iX supports the employees who joined the Armed Forces of Ukraine and Territorial Defense Forces – the N-iX Fund has been created to help colleagues in the Armed Forces. The company has already donated $ 200,000 to the Fund.

On February 24, Sombra donated UAH 125,150 to the Come Back Alive Foundation. These funds had been raised by employees, which the company doubled. The volunteer coordination center decided to allocate $ 20,000 from the company every day during the hot phase of the war. Employees of the company collected UAH 136,500 for the needs of the Ukrainian army in less than a day. Sombra has already donated more than $ 100,000 to volunteers and foundations for the Armed Forces. The workers agreed to donate part of their rewards to help the army.

Ciklum, supporting Ukraine’s freedom and sovereignty, has allocated UAH 1,5 million to finance the Ukrainian army. The company has also further expanded the From Patriots to Patriots program for donations from its employees – Ciklum will double the funds raised and direct them to support Ukrainian Defenders. From Patriots to Patriots is an initiative that, since 2014, has raised more than $ 785,000 to strengthen the Ukrainian army’s capability.

SoftServe has paid UAH 24 million taxes in advance to inject additional resources into the Ukrainian economy today. In addition to UAH 12 million from the company donated to the Open Eyes Charity Found, fundraising has been launched through the company’s website. An additional UAH 1,2 million has already been collected from the company’s employees. SoftServe also handed over bulletproof vests, wireless receivers, helmets, extension cords and power supplies to the Armed Forces.

Avenga raised UAH 2,4 million in military assistance and made the first transfer. The company’s second transfer amounted to € 50,000. Avenga provides the Territorial Defense Forces with the necessary computer equipment on a daily basis. In addition, the company’s specialists in various cities join volunteer initiatives.

After Russia’s invasion of Ukraine on February 24, ELEKS donated UAH 600,000 and $ 50,000 to support Ukrainian troops. In addition, during January-February 2022, the company donated UAH 560,000 through the Come Back Alive Fund. On February 28, ELEKS increased its funding for the Armed Forces of Ukraine to UAH 600,000 per day. Some employees of the company decided to serve in the Territorial Defense Forces or the Armed Forces of Ukraine.

EPAM joins the all-country efforts and allocates UAH 10 million to the humanitarian organization of the Ukrainian Red Cross Society to meet the medical needs of Ukrainian hospitals and the needs of displaced people. The company also donated more than UAH 440,000 to the non-governmental organization ASAP Rescue, which conducts rescue operations. EPAM Ukraine transferred in advance UAH 50 million income tax for the first quarter of 2022 to the state budget.

Intellias transferred UAH 1,000,000 to the Come Back Alive Foundation. After all, while our military is courageously repelling enemy attacks, we need to contribute in support of the Ukrainian army. The company’s employees donated almost UAH 800,000 a week. The founders of Intellias also joined the collection and transferred more than UAH 200,000. The company is evacuating colleagues from the eastern regions. It also provides Military Packages for the mobilized or those who join the ranks of Territorial Defense Forces.

Sigma Software transferred UAH 8,886,148 to the Armed Forces of Ukraine. Half of the amount is personal donations from the company’s employees. Even in a situation where many people are forced to flee their homes because the Russian invaders attacked them, workers are trying to find ways and resources to show their support for Ukraine’s defenders.

GlobalLogic continues to operate and fulfill its obligations to its partners in full. GlobalLogic donates UAH 1,000,000 to the Come Back Alive Found. The company encourages employees to join the initiative through foundations or people they trust.

IT companies are activating all efforts to provide maximum support to the country and their employees. Every day they help families who are forced to leave their homes, support the community, the defenders, all those who need support now, believing that the victory of justice, democracy, freedom, and Ukraine is near.