[Contribution from member] Doing business with the partner, not the country: Business conditions in Ukraine and beyond


July 31, 2014
[Contribution from member] Doing business with the partner, not the country: Business conditions in Ukraine and beyond

The Ukraine geopolitical crisis has reignited discussions about outsourcing risks and has raised concerns  about safety of outsourcing operations in the country and outsourcing risk management in general. Prior to the crisis, Ukraine’s IT outsourcing industry was booming, with 25% annual market growth and with a large talent pool of certified IT professionals and over 30,000 ICT graduates every year. With the conflict in Eastern Ukraine ongoing, many business leaders are asking their existing and potential outsourcing   partners about the conditions on the ground in order to understand the current situation.

With the goal to clarify the situation and discuss the facts, IAOP (International Association of Outsourcing Professionals) Chicago Chapter met on July 17th 2014 to discuss geopolitical risk management and Ukraine’s current business climate. The meeting, held at DePaul University, featured a presentation and a panel discussion about Ukraine and best practices for writing outsourcing contracts. The Ukraine discussion was started with a presentation by Boris Kontsevoi, founder and president of Intetics Co, a leading global sourcing company with two development centers in Ukraine.

Kontsevoi’s presentation is embedded below, and it can also be downloaded from the Intetics Co. website. The presentation takes a global approach to understanding geopolitical risk management. Geopolitical conflicts are not a new phenomenon in the IT Outsourcing industry and looking at past examples from other parts of the world helps to understand how to mitigate such risks. The presentation analyzes past geopolitical crises effects on IT outsourcing and discusses the importance of Internet as a vital globalization tool that makes outsourcing possible. From discussing past geopolitical conflicts such as the India-Pakistan border skirmishes, Kontsevoi evaluates the effect they had on some of the country’s biggest IT industry companies. He also compares the effect of the current Ukraine crisis on its IT industry, discusses the current risks and opportunities, and suggests a few consequences of the conflict in the future. Overall, throughout the presentation it becomes evident that many companies do business chiefly with their chosen IT outsourcing provider, rather than the country. The recovering stock prices of outsourcing providers with development centers in Ukraine Ukrainian seem to suggest the same.

Ukraine Crisis: Geopolitical Risk Management in IT Outsourcing presentation can be viewed on SlideShare.



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