The outsourcing companies are alienated into offshore outsourcing, nearshore outsourcing and onshore outsourcing, depending on the country, where the outsourcer is situated. If the company is located in the neighboring country, then it is called nearshore outsourcing company. The company that provides the outsourcing services, if located in the same country, is called an onshore outsourcing company.

Businesses these days look more anxious about security and stability rather than mere cost savings and this is why most of them are adapting to the new wave of near-shore outsourcing. Proximity for travel, cultural affinity and developing infrastructure are a few other reasons for near-shoring receiving the boost. Relatively lesser known outsourcing destinations like Mexico, Canada, Costa Rica, Romania, Slovakia and Ukraine have chances of emerging as major winners of this new tendency in the years to come.

Companies that are interested in long-term outsourcing for satisfying their growing software development needs may consider the three alternative models: project-based, dedicated center and captive operations.

Project-based model is regarded as the most suitable for development of quite big and well-defined applications or their modules. On the other hand, dedicated center caters for software with changing requirements, maintenance and support of large systems, research and development, testing as well as other types of complex tasks. DDC is about having full-time cost-effective developer resources allocated to work exclusively on client’s projects for a extended period of time. It serves as an extension of customer’s organization in the nearshore country.

In DDC type of engagement, vendor is liable for providing necessary facilities and setting up a software development team that correspond to client’s methodologies, practices, management style and even business culture. Nearshore partner also undertakes administrative functions, support of technical and office infrastructure, staffing, human resources management and ensures service delivery standards.

The “captive operations” type of outsourcing is where the company sets up its own office in the nearshore location, usually an Eastern European country. There they hire native workers, but still management from their own country. This is possibly the most risky strategy in terms of investment capital required, operational efficiency and organizational issues. This path is sometimes appropriate for large and multinational companies ready to take these risks and well-known and ready for the personnel and staffing issues.

Most of the Ukrainian software development enterprises are oriented towards SME customers, offering them a value proposal composed of reasonable pricing and consistency of quality assurance. Over the last five years, it became a wide trend among Ukrainian IT entrepreneurs to improve the focus on improving the quality of the delivered services and extending the knowledge of developers through specialized certifications and trainings.