by Alan Harlan Chief Executive Officer, SoftServe IT Weekend Ukraine 2013 is an international conference, initiated to help Ukrainian IT industry professionals to grow and develop. 14.09.13, Kyiv http://ukraine.itweekend.ua/

1. Information Technology & Outsourcing
Migration to Central & Eastern Europe

2. Outsourcing Industry
Outsourcing will be a $483 billion global
industry by the end of 2013, with significant
emphasis on three broad areas:
Logistics, sourcing and distribution services;
Information technology services, including the
creation of software and the management of
computer centers;
Business process outsourcing (BPO) areas such as
call centers, financial transaction processing and
human resources management.
Source: Plunkett Research

3. Software and IT Outsourcing to Grow
▪ IT outsourcing and hardware
maintenance will grow by 7.3%, as
firms especially in Europe, Japan, and
other struggling economies turn to
outsourcing to save money.
▪ Elsewhere, software will be the growth
story, with global growth of 6.5%.
▪ Computer equipment will join
software as the fastest growing
categories at 7.0% and 8.8%
▪ IT consulting and systems integration
services at 6.8%.
Source: ITO News

4. KPMG 2013:
State of the Outsourcing Industry
▪ Key Findings:
– Efficiency & Effectiveness
▪ Cost Reduction (87%)
▪ Greater Scalability of Operations (82%)
▪ Process Standardization (74%)
– Strategic Focus
▪ Accessing Better Talent (70%)
▪ Accessing Better Technologies (62%)
▪ Improving Analytics Capabilities (62%)
Source: KPMG 2013 State of the Outsourcing Industry

5. The Tholons
2013 Top 100 Outsourcing Destinations
Southeast Asia South AmericaEastern Europe
“Dynamic shifts occurring across regional outsourcing landscapes. For this year, the
outsourcing landscapes of three particular regions have progressed significantly”
Source: Tholons

6. Trends Shaping the Outsourcing Market
Source: IT Business Edge
▪ Going Vertical
▪ Outcome-based pricing
▪ Shifting to managed
services
▪ More strategy less staff
augmentation
▪ Supporting an
empowered employee
▪ Restructuring of contracts
▪ Asking for help, expecting
solutions
▪ ITO trumping BPO
▪ Developing best-of-breed
strategies
▪ In the Cloud…now what?
Global Outsourcing Trends

7.  Global demand
is higher than
supply
 Eastern Europe
is target market
 Ukraine is the
target for
western and
eastern Europe
Czech
Romania Ukraine
Poland
Trends that Influence IT in Ukraine

8. IT & Outsourcing CEE
▪ Facts:
– Companies are increasingly
considering alternative locations to
India for services work, and one of
the leading choices is CEE.
– CEE has a strong talent pool and
strengths in sophisticated software
engineering.
– CEE’s core competency is high-end,
sophisticated custom software
development.
Source: Forrester

9. Ukraine – IT Specialists
▪ Approximately 25,000 IT specialists
graduate from Ukrainian universities
each year.
▪ The country holds the 4th position
globally for the number of IT
specialists.
▪ Ukraine holds leadership position
together with the USA, India and
Russia.
▪ Over the last 8 years the volume of
software development and IT
outsourcing services market has
grown by a factor ten or 30-40%
annually in average.
Source: ITO News

10. Ukraine – IT Specialists
▪ Geographical distribution of Ukrainian IT
specialists:
– 40% Kyiv
– 19% Kharkiv
– 16% Lviv
– 7% Dnepropetrovsk
– 4% Odessa
▪ More than 50% of the Ukrainian IT
market is exporting IT services or
software development outsourcing.
▪ Experts say that the most promising
areas of the industry from now on will
be services related to outsourcing and
system integration plus development of
cloud computing technologies.
Source: ITO News

11. Higher Education
▪ Ukraine’s higher
education systems
comprises:
– 81 Universities
– 48 Academies
– 149 Institutes
– 2 Conservatories
– 327 Technical schools
– 216 Vocational
schools
Kiev University
National University of
Kyiv-Mohyla Academy
Kiev University
Kharkiv Polytechnical
Institute
Lviv UniversityDonetsk National
University
Donetsk National
Technical University
Kiev Polytechnic
Institute Kharkiv University
Source: ITO News

12. Ukraine and Outsourcing Facts
▪ Ukraine was ranked the
first among 16 countries
of the CEE region by the
volume of IT outsourcing
services and the number
of IT outsourcing
companies.
▪ According to the 2010
Global Services 100
list, Ukraine is 11th
among 20 leading
countries in the area of IT
Outsourcing and High
Tech Services.
Source: ITO News

13. IT & Outsourcing Ukraine
Source: Code Spring

14. IT & Outsourcing Ukraine
Source: ITO News

15. Top needs…
Analytics, Big Data, Mobility and Cloud
▪ In software, business
intelligence and analytics apps
will big the hot products, along
with mobile smart process apps
for collaborative business
processes.
▪ The latter, which are primarily
sold on a software-as-a-service
basis, will help SaaS
subscription revenues grow
two-to-three times faster than
combined license-and-
maintenance software.
Source: ITO News

16. Organization
Strategy
Service Offering
Organizational Capability
Enablers
Organizational
structure
KPIs and
Governance
Organization
Strategy
Execution
Strategy
• Depth of verticalisation in
organization structure (sales,
solution design, delivery,
support functions) – aligned
to strategy and scale/scope
• Reporting relationships and
formal hierarchy (matrix etc.)
• Alignment of Organization strategy with evolving
client needs
• Clear articulation of horizontal and vertical strategy
• Investment strategy – Organic and M&A
• Leadership development
State of verticalisation in the OPD context has been assessed on six broad parameters
• Defining market and services based
on strategy
• Platform development
• Skill sets, knowledge and
competencies development
• Change in KPIs to
enable/implement
the change –
defining
accountabilities
and control
• Implementation of the change in mind set – Behavioral changes and policies
• Change management
• Alignment of training and hiring in accordance with strategy and organization structure
• Talent management
Verticalization by OPDs is defined as alignment of their strategy, offering and operating model to meet the
needs of specific industry verticals

17. Global OPDs Today
With the maturity of market, OP/AD organizations will increasingly need to redraw
their strategies to meet evolving client needs
StrategicLevelofclientneedTactical
Time
ClientneedImplicationsfor
OPDs
Cost reduction for
transactional scope
• Primary focus to reduce
cost of operations / LA
• Need to outsource non-
core functions
• Buyer (client): Example
SVP R&D
Core R&D support
• Need for value-added OPD
offerings
• Need for client-specific
solutions
• Proven track-record
• Buyer (client): CTO and
Functional Heads
Transformation Partner
• Buyer (client): CEO and
COO, CTO
• Adopt outcome – based
models
• Provide process
transformation in core
R&D processes
• Provide Eco-system
delivery for 360⁰
relationship and VAS
• Reliable, risk sharing,
financially stable
strategic partner
• Need for ideation or
TCO impact to support
growth
• High Value Services
PA, DA and UI/UX
• Move beyond basic QA
and R&D functions
• Develop vertical
experience in client focus
areas
• Customise for clients –
Example integrate custom
Product IP Support
• Offer outsourcing services
for non-core R&D
Functions
• Offer competitive pricing
to win contracts
• Develop standardised
services across clients
Global OPDs have focused on ‘Core-Technology Support’ but will increasingly need to focus on becoming transformation partner and
develop verticalized thinking for an industry relevant value proposition.
SoftServe
Transformation
• UI/UX
Consulting
• Product
Ideation
• Actionable
Analytics
• Mobility /
Security
Highly Risk Adverse Risk Acceptance
Abiliton Infusion

18. Systems of engagement guide
people in their physical world
Mobile is the new face of engagement
Systems of record host
transactions in the
virtual world
Systems of engagement empower people with
context-rich apps to take the next most likely
action
Source: November 16, 2012, “Great Mobile Experiences Are Built On Systems Of Engagement” Forrester Report

19. Context-rich experiences are the key to
successful systems of engagement

20. Ukraine… the Clear Choice for
Outsourcing
▪ IT outsourcing market
volume of US$ 1.1bn
▪ More than 1,000
outsourcing
companies operating
in the industry
▪ More than 25,000 IT
specialists involved in
outsourcing.
Source: ITO News
Ukraine is one of the most attractive nearshore
outsourcing destinations for both North American and
European businesses.