The Potential of Ukraine in the Global IT Offshore Outsourcing Market (2002)

Offshore IT outsourcing has been an area of growing interest for many companies [Lacity and Willcocks, 2001; Gupta, 2002]. Although it currently represents 2% of the $400 billion global IT services market, it is playing an increasingly important role in the IT (information technology) strategies of major corporations [Lane, 2002b]. Present business pressures on company executives are pushing them increasingly in search of experienced staff that can provide innovative technology skills and ideas. To acquire these competencies IT managers can choose from two strategies: either employ specialists or outsource. More and more often
managers choose the latter.

IT outsourcing is not a new concept and there are a lot of examples of it in the literature [Due, 1992; Mason, 1990; Lacity and Willcocks, 2001]. However, offshore IT outsourcing is a recent fast-growing phenomenon that became common practice for many multinational corporations such as Intel Corporation, General Electric, Ford and many others [Carmel,
2002]. The growing acceptance of offshore delivery has led enterprises to move beyond lowskill and labour intensive tasks. Nowadays, offshore providers can deliver complex custom applications and advanced Web-based solutions. It is estimated that approximately half of the US Fortune 500 engage in offshore outsourcing of IT work. Many others are planning to follow their steps and are waiting for market maturation.

Primarily, companiesí decision for moving software development and maintenance offshore is based on two interrelated factors:

• Cost advantage
• Demand for specific labour skills

The Potential of Ukraine in the Global IT Offshore Outsourcing Market (2002)