9 FAQ About Growing Software Development Department Offshore

This blog post will reveal all matters of concern about building a development team abroad and explain it’s competitive advantage over traditional software development outsourcing. Let’s roll!

True story. Collaborating for a great while with tech-oriented companies and start-ups from all around the world, we keep receiving the same questions regarding IT outsourcing concerns and the ins and outs of opening own development office offshore.

Alternative to Outsourcing

Rapid technology changes and shortage of locally available tech workforce mainly in the USA, UK, Germany, Israel, Australia, and other countries, bring C-suite executives to search for new development and business solutions

Whenever you hear about software development outsourcing, you know exactly how it works and what are the real pros and cons. But, people do have a blind spot when it comes to this alternative business model – an offshore development center or extended software engineering team.  So let’s shed some light on this matter.

1. What does an offshore R&D center mean?

As a rough guide, the R&D (research and development) office abroad is an extension of your company, a “super-duper cool” engineering office with your IT guys – a dedicated development team who really cares about the products they build for you, support your company values, culture and act as a united part of your head office.

The development force in a foreign country is not just about saving money it is also about the ability to design and develop products specific to the fast-growing IT market and tech trends such as AI, Machine Learning, RPA, IoT, or VR.

So basically, it is your own extended development site and IT team in a country with a wide talent pool and high-tech expertise ( in our case Ukraine).

2. What companies have opened their own R&D office in Ukraine?

New digs day!

Given Ukraine’s pool of talents and proficiency in both digital and mechanical technologies, over 150 companies have already established own r&d center here. We want to show 5 bright examples.

  • Case 1: NetCracker (USA) – telecom company with HQ in Boston has 3 development offices in Ukraine where local software engineers build business & operations support systems.
  • Case 2: Plarium – Israeli gaming company has 4 development offices located in Kyiv, Lviv, Kharkiv, and Odesa. Ukrainian programmers at Plarium create action- and casual- games for mobile and browser platforms. Awesome, indeed!
  • Case 3: TalkaTable – US startup with a Headquarters in San Francisco, California, and a development office in Kyiv. Actually, it is an American product IT-company, designed a marketing tech platform with analysis functions used by e-commerce companies all around the world.
  • Case 4: Ericsson – the Swedish telecom company, that acquired a Polish Ericpol, also was attracted by Ukraine’s excess of information technology talents. Their dedicated development team in Ukraine mainly develops software for OSS and BSS telecom operators systems.
  • Case 5: Altran (Aricent) is an American global design and engineering company with 3 remote sites and over 700 employees in Ukraine creating software for the telecom, medicine, mass media, energy, consumer electronics, and other industries.

3. What skills and expertise can I expect to find in Ukraine? And what about salaries?

Any that you require!

Ukrainian IT ecosystem along with and over 200K of graduated tech specialists keep attracting global players in various industries. Moreover, in 2019 we see that UA developers are most willing to work full-time at international companies with subsidiaries or R&D centers in Ukraine. They use rare programming languages, have experience in top technologies and focused on digital trends. Check this abridged review from our recruitment team.

Hire Python developer

Python is the 2-d most demanded language that employers look for.
Hopefully, Python is also one of the most popular languages within a community of software engineers in Ukraine. They’re good at key areas such as data analytics, machine learning, big data, cybersecurity, GUI, where Python is one of the required skills. Average Python developer salary by countries

  • The USA – $7000 per month
  • Israel – $5100 per month
  • Ukraine – $3700 per month

Frameworks used among Ukrainian Python developers: Django, Flask, NumPy, SciPy, etc

Hire Java developer

One of the most established languages that can be used for different purposes: Android apps, web applications, games, server apps, software tools, Big Data technologies, etc.

Java is so popular and widespread that there’s no shortage of ways to find skilled and worldly-wise developers in Ukraine.

Average Java developer salary by countries

  • The USA $5400 per month
  • Israel – $4500 per month
  • Ukraine – $3200 per month

Frameworks: JSF, Struts, Hibernate, Spring is still widely used, GWT from Google, Spark for web applications, and others.

Hire JavaScript developer

JavaScript exists to make web pages interactive, building mobile and web apps, create browser games, and grow user experience. In addition, programmers use JavaScript to build simple web servers and develop the back-end infrastructure using Node.js.

Front-end frameworks used by Ukrainian developers include React, React Native, Angular, Vue, and Ember.js. Back-end frameworks: Node.js, Meteor.js, Express, jQuery, Next.js.

Average JavaScript developer salary by countries

  • The USA – $8000 per month
  • Israel – $4700 per month
  • Ukraine – $2500 per month

Hire .Net Developer

Microsoft framework is used by developers to create various types of applications, from ordinary desktop apps and websites to mobile platform solutions and even computer games.

.Net Software Engineers in Ukraine have proficient understanding, knowledge, and experience with the following programming languages: C#, Visual Basic .NET, F#, C++ .NET

Average .Net developer salary by countries

  • The USA – $7000 per month
  • Israel – $5000 per month
  • Ukraine – $2500 per month

It’s just a short overview, the Ukrainian IT market is full of specialists working with various programming languages and tech stacks: C+, Linux, Ruby, Angular.js, PHP, etc.

4. How much does it cost to open own development department offshore?

The pricing models in IT outsourcing that you’re familiar with, differ from an extended team model. For instance, at Newxel we collaborate with our partners based on Cost Plus – the most transparent pricing model, which doesn’t include any hidden fees. Moreover, our clients know exactly how much each developer is paid and what back-office services they are obtained with.

While working with a dedicated team, Newxel’s clients manage the development process by themselves, assigning tasks, and changing priorities. They don’t worry about recruitment, HR, legal or administrative issues, inasmuch as, this is our area of responsibility. So, let’s consider a pricing structure of hiring dedicated developers in Ukraine.

Software Developer Salary + Local Taxes + Newxel Monthly Fee 

Newxel fixed monthly fee includes the following services:

  • Office Space. Infrastructure & Office Facilities: the proper location for your foreign development office with all required facilities, remodeling, and branding options. Your foreign IT team is in good hands and working conditions.
  • Dedicated Account Manager: we always say that the account manager from Newxel is a bond between you, your in-house team, and the development team abroad.
  • Legal and Compliance Support
  • HR Management & Team Retention
  • Financial Support: bookkeeping, payroll, accounting, etc
  • Office Management & Maintenance Services
  • Supply & Purchasing Support
  • Business Travel Support
  • Employee Benefits – annual medical insurance

5. What about sourcing and interviewing candidates?

5.1 Is the recruitment & HR services included in the price?

5.2 How can I find and hire the right developers abroad?

Yes! Included. It stands to mention, our recruitment department is responsible for searching, interviewing, and testing required candidates with appropriate skills and level of expertise. We have access to the wide pool of available IT workforce or candidates who are looking for new opportunities.

Usually, we need a few weeks to hire and build the development team from scratch under your unique specifications and project goals. So, everything that you should do when hiring software engineers offshore is to leave it to our professional HR team.

6. Companies of what industries can carry out development activities offshore?

The same answer – almost all companies enable to set up R&D subsidiaries offshore. Not far to seek, we hire distributed software development teams, help to open and run offices for companies from a variety of industries, including Telecom, Software, Gaming, Tourism, E-commerce, Fintech, Internet, and others.

7. Is a Dedicated Development Team model suits for a startup?

Well, yeah! More than you would expect! There is a growing trend among successful startups, and that’s the use of distributed teams that complete work remotely. Not as freelancers or part-time developers, rather opposite – as your full-time employees operating in your development office abroad and work for the mutual goal.

It is not just a way of saving money! Building a distributed team will help to implement and leverage new tech solutions, be one step ahead of competitors on the way to innovations.

8. How should I manage the development team in Ukraine?

Briefly, in the same way as your in-house team but using some additional advice. Read our article regarding this question and explore more useful tips and tricks – “How to manage an offshore development team?”

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