MYTH!

"No one ever got fired for choosing IBM"; this statement has been heard by for years in the IT world. Over the last couple of years, this statement has been changed just a bit to; "No one ever got fired for choosing India". This statement seems to be true at least at the Fortune 1000 or Fortune 2000 level today, the same as it was true with IBM for many years.

Choosing a particular country for offshoring, even one that receives the bulk of offshoring money and has the headquarters for the largest number of CMM certified companies, will not guarantee success. There are a number of factors that can cause any project to fail irregardless of the country. Even with the IBM statement, the wrong IBM products or services could have been chosen for the particular situation, or the wrong people with the wrong experience could be working on the project, or the project management could not be working well. For any of these reasons a project could still fail even when working with IBM, the same is true with any IT project. Adding the country factor, all Indian outsourcing firms are not the same, and all persons working in the top Indian firms are not the same, they may not all be certified in CMM practices, etc., therefore the results of various projects outsourced to India may differ.

While a few years ago, it may have been the practice to first choose your country to offshore to and then choose the vendor, this is getting to be less important than first choosing the right firm to work with, and that firm may just be in Ukraine.

REALITY!

English language education has become a priority for many outsourcing firms as well as within academia. By virtue of their business, outsourcing, and their clientele, outsourcing firms are very focused on the communications (both written and oral) of their staff. For working with their US partners it certainly means communicating in English, for working with their European partners, it usually means using English as the common business language. Therefore many firms offer English language training courses within their firm, or subsidize courses for their staff at nearby universities or private institutes. This means you will be able to speak with your team lead, at the very least, by phone, be able to communicate in writing via IM or chat, can expect written status reports, etc. Many university programs now require a certain level of a foreign language in order to graduate and the most often chosen foreign language, by Ukrainian students, is English. All schools (grades 1 through 12) also require at a minimum one other foreign language, and often two foreign languages are studied for 5+ years.

Oral communication skills are usually the most difficult to develop for any language student. You may find that the speaking skills of your team may be less developed initially since their may have been a lack of oral practice. However, you will find that very quickly these skills will improve right before your eyes, or ears. A big reason for that is the initiative of your team members themselves who are anxious to improve their skills and anxious to prove their skills in speaking with you.

MYTH!

This is definitely possible and occurring today. There are two sides to this issue. Getting appropriate connectivity in Ukraine and getting agreement on the US side for an outsourced team to work on US servers. Secure connectivity; secure servers, hardware for the VPN if required, can be organized on the Ukraine side while at the same time agreement for offshore resources to work on the client's servers can be obtained. Rapid reduction in telecommunications connectivity fees makes working directly on US servers from Ukraine possible and cost effective. To arrange for a 1 Mbit connection with unlimited traffic enables up to six persons to easily work continually on servers in the US, with additional lines to be added for increased team sizes.

MYTH!

The number of hardware vendors assembling equipment in Ukraine continues to increase as the demand for hardware by consumers and businesses accelerates. Companies such as Kvazar-Micro have invested in their own assembly plants. In addition to local vendors, there are a number of systems integrators and hardware distributors such as SN&T which specialize in importing specific hardware from well-known producers. So yes, technically the hardware will be imported, but you will not have to deal with doing the importing, and more importantly you will have access to local service. Something you would not have if you imported yourself or if you carried some equipment in for use in the company.

There are a number of firms which also specialize in assembling their own brand of hardware, for example, firms specializing in their own brand of servers. Hardware can be assembled to specifications.

MYTH!

Being a low-cost leader can be a very effective marketing strategy for a firm. If you are looking at the US airline industry, you might think of Southwest Airlines, or Walmart in the retail market. This can also be an acceptable and very profitable strategy for a country, particularly when a country is working towards building up its participation in a specific industry. However, this is not the strategy that Ukraine is going after. There are many countries competing in the outsourcing market, and some of them are going after being the low-cost leader, China for example, is being recognized as following this strategy. Others are looking to differentiate themselves with the quality of the work that they do, others with the industry they target and work with. It has been talked about for years that Ukraine and all of Eastern Europe and Russia were going after, and could go after a different strategy than was used by India and now China to build their outsourcing industries, i.e. the low-cost leader. They were going immediately after more "higher value" work. Ukraine's path of targeting not just simple coding, but participating in design work, has been proven out and is being recognized in the outsourcing community. [September 2006 blog from Global Services]

MYTH!
It is actually Ukraine with a 99.5% literacy rate with 87% of high school graduates going on to higher education. What this means for you and your work in Ukraine is a large pool of highly educated persons to work with, not only engineers, but also in the support areas from customer support to QA testers. If you look at opening your own office it means you will have the qualified personnel needed for; Office managers, accountants, HR and training personnel.

Source: United Nations Educational Scientific, and Cultural Organization (UNESCO) Institute for Statistics. 2002

MYTH!

For some companies, this myth has two sides. The first is that it will be better and easier to work with an offshore country, from which they already have many internal employees, i.e. if they have many employees from India, it is better to work with India, if they have many employees from Ukraine, it is better to work with Ukraine. The thought process being that the internal employees are already familiar with the company's products and familiar with the culture of the offshore team. They will be able to more easily pass on knowledge of the product by speaking the same language and handling any cultural issues. While this is certainly one way to get started offshoring, it may be a mistake to think this is the only way, or to think that this is the best way to offshore.

There are two areas you should look internally: When setting up an offshore team, with the liasion persons being from the same country, very quickly the offshore group (including the onsite coordinators) can become, "those people", or "that group", and rapidly an us versus them scenario develops. "That group" handles the offshore issues and we do not have anything to do with them. If there are any problems with the offshore team, it will be "that group's" fault. This group, that group, situations are exacerbated when all of the group members are from one country. It may also become harder to integrate offshore as a strategy within the entire company. Another unit may not have any persons from that country, so it may be seen as an "excuse" or a "psychological" barrier to not getting in to offshoring. This obstacle may be enhanced if the internal persons from the offshore country are not at a high level within the company. They may be responsible for making sure that the offshore team delivers, but they may not be able to push a full offshoring strategy within the company, if they do not get support from upper management.

When exploring countries, do not limit yourself to only working with countries from which you currently have internally employees. Look at other issues such as ease of traveling to the location, education levels, skill sets available, and turnover rates. Then when determing who will be the primary interface teams or persons from the US side, make sure that it is a well rounded group, interested in the company's offshore objectives and with the authoritity to sell and push the company's overall offshore strategy within the company.

Many people are concerned about being culturally compatible with Ukrainians. When people ask me if there will be a cultural fit, I usually ask what they mean by that since everyone has a different definition of what culture is. I expected to get questions such as; "Do they believe in, or are they willing to work extra hours to get a project completed when necessary?", or "Will they inform me, as soon as it is known, that there is a potential problem which may cause the timeline to slip?" Questions, related to getting the work done, however, are not the questions that I usually get.

Here are some of the most often asked questions regarding cultural compatibility and my answers?

1. Q: Do they know what Survivor is (the idea being if they know what Survivor is, they will understand American culture)?
   A: There is actually a Russian version of this program which is shown weekly on Ukrainian TV. From what I have seen of the Russian version and the US versions, activities and locations are similar and similar types of people and personalities participate in the show.
   
   
2. Q: Will we be able to go to the pub after work together?
   A: Yes. Your team will be happy to go to a local establishment, or sidewalk cafe area and enjoy a cold beverage with you. With great pride they will introduce you to their local favorites, of which there are many. My personal favorite is Etalon, which was awarded a Gold Medal at the World Beer Cup in 2004.
   
   
3. Q: Will we have any sports in common?
   A: There is a long standing love of sport in the region, both watching and engaging in. The most common sport to play and to watch is of course European football. You can take in a Ukrainian Club match or depending on the time of year, you may be able to see the Ukrainian state team in Championship league play. Ukrainians are also very familiar with some of the US's favorite sports such as: American football. Breaking with tradition for programmers, Miratech, an Ukrainian outsourcing firm based in Kyiv, won last year's American Chamber of Commerce football tournament. There is an Ukrainian American Football League with several teams throughout the country. I have watched several of their games, while the level of play may not be what we are used to, the games are fun to watch. You will even be able to take in American football play, NBA, etc., while in Ukraine. A number of local establishments will show the games. You may be watching the Super Bowl at 1:00am! Rugby, ultimate Frisbee, windsurfing are some of the activities available in Ukraine. Your Ukrainian team will also be very happy if you are familiar with the Klitcho brothers, boxing, who are also a great source of pride in the area of sport.

MYTH!

Having lived in Siberia, I can tell you that Ukraine is not as cold!

If you set up any offshore team, you will want to visit them. Either before deciding on who to work with, after undertaking a pilot project, to conduct a knowledge transfer session on your development methodology, or just to periodically work with your team onsite and ensure everyone is engaged.

The question of the weather often comes up, when talking to people about travel to Ukraine. The weather in Ukraine is similar to that in the Chicago area. Summers can be warm and humid, however air conditioned offices, hotels, and restaurants are the norm.

No matter what the season, Ukraine offers a wide variety of cultural events and other activities that you can engage in with your team; from parasailing and paintball to skiing.

REALITY!

Believe it or not, when we call people in the US from Ukraine, they are continually surprised that the connection is so good.

When you have a team in Ukraine, no matter how well your data connectivity is, or your use of chat or instant messaging, phone conversations are going to be necessary.

The choices for long distance service range from using a traditional long distance provider, such as MCI, to pre-paid calling services or cards, long distance resellers, and VoIP (Voice Over Internet Protocol). For example, using MCI and a local access number in Ukraine, calls are $0.29 per minute to the US.

VoIP has become much easier to utilize as more service providers have entered the market and hardware has become commonly available. Plan costs range from free to flat-rate to per minute, plus any one time hardware or set-up costs. By having a US VoIP service provider, a US telephone number, and then using the hardware in Ukraine, a call placed to the US number rings in Ukraine, and calling from Ukraine is the same as a US domestic call. Costs for such a scenario can be as low as $20 per month for unlimited US calling or $0.02 per minute, depending on the provider. But keep in mind that VoIP calls rely upon a high speed internet connection, along with its associated costs, and that any net congestion will effect call quality.

Choosing which method for long distance to use depends upon your calling requirements, and unfortunately no single service will usually suit all your needs. Whatever you and your Ukrainian partner decide to do, make sure you have several ways to call available, so in case one method fails, there is always another available. Also, make sure they have someone who speaks English answering their phone. You certainly don't want any communication problems when trying to contact someone to discuss an important issue.

MYTH!

The truth is, no country can guarantee the protection of your intellectual property, not even the US as is evidenced by the number of cases brought for industrial espionage. Industrial espionage can occur anywhere. If you are outsourcing your software development, or even insourcing it in San Jose, California, there are steps you should take to protect yourself:

1. Segment your work so that no one programmer has access to all components of an application or system.
   
   
2. Require that all code be uploaded, twice a day, to a server that is controlled by you, with proper measures in place to prevent hacking.
   
   
3. Conduct periodic code reviews; of the code that is uploaded to the server, and peer code reviews during the development cycle. (This is required by CMM level 3 companies, but is also considered a standard software development life cycle process and should be conducted by all companies irregardless of certification level.)
   
   
4. Review your outsourcing partner's internal processes for handling "social engineering" issues, new employee orientation (How employees learn about information sharing procedures, etc.).

MYTH!

Ukraine has received more coverage in the last two weeks than it has ever received. I do not think you could have turned on CNN or even the local news or opened a paper in the last two weeks without seeing pictures of the demonstrations in the capital of Ukraine, Kyiv. True, demonstrations are taking place. True, the opposition candidate called for an all Ukraine strike in Ukraine. Has this caused all work to stop in Ukraine, do you need to be worried about projects being undertaken in Ukraine?

No. Softjourn has several projects going on in Ukraine, both in the capital of Kyiv and in other cities within the country. All projects are proceeding according to schedule, there has been no hold ups. Everyone is being professional, going to work and meeting their commitments. In their personal time, they are exercising their Ukrainian constitutional rights, discussing and supporting their political convictions.

A recent article in Information Week, Did Ukrainian Unrest Disrupt Offshore Work?, Dec. 6, 2004, showed that one San Carlos, CA company could not get in touch with their programmer in Ukraine. This article highlights problems with the communications process between onshore and offshore companies more so than dealing with political issues in another country. The creative director was unable to get in touch with his one programmer for several days. Was there any process in place that said, if you are going to be out for several days, either vacation, death in the family, or for any other reason people are normally absent from work, that if at all possible an email be sent to state the reason for the absence, the estimated length of the absence and an alternative contact person within the company. This should go both ways. A programmer in another part of the world could be trying to contact their counterpart in the US to ask a few clarifying questions. If there was no agreed upon process for handling absences (and discussing questions) work could be affected. Another step to the communications plan should include knowing the management of the outsourcing company that you are working with and being able to contact them directly. This includes via email and IM and picking up the phone to find out what is going on. No matter what is going on, you will want to have a relationship at the management level. What if you are not satisfied with a piece of work you are receiving, or one or two of the programmers you are working with leave the company. You want to feel confident that the firm is concerned about your projects and your work to assure there will be no interruptions.

If you are currently working in Ukraine, the current political activities should have caused no disruptions in your work, but perhaps it can be used as the motivation to improve your communications plan with your outsourcing partner.