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Crimean crisis likely to hit outsourcing

Wednesday, March 05, 2014

The current uncertainty surrounding the political situation in Ukraine is likely to impact the outsourcing service providers operating in the country.

Ukraine has become known for IT outsourcing services over recent years, due to a skilled workforce, capable infrastructure and low costs, with the industry contributing £1 billion to the economy per annum. Multiple companies based in the country offer services to a range of international clients.

Companies currently employing Ukrainian vendors are moving to put safeguards in place, should services be disrupted.

Past interference with critical infrastructure including internet access has been recorded before in past disputes with Russia. This includes the 2008 Russo-Georgian conflict, which saw suspected electronic warfare being employed by both sides.

The presence of a military draft in the Ukraine means that the mobilisation of the armed services is likely to impact the outsourcing provider workforce in the country, as majority of the men working in the industry are of draft age.

So far services have not been significantly disrupted, with the large outsourcing firm LuxSoft which has a substantial presence in the country releasing a statement confirming continued operation:

“In light of the new developments and news headlines, we would like to confirm that Luxoft’s business operations in Kiev, Odessa and Dnepropetrovsk are stable and no incidents have been reported in any of these cities. There are no disruptions in transportation, telecommunication or other infrastructure and logistics. We plan to operate on business as usual basis in all three of our delivery centers in Ukraine and will continue posting timely status updates.”

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