A.T. Kearney's Global Services Location Index™ (GSLI) offers a snapshot for both business leaders who must choose among a growing number of offshore locations, and the policy makers who seek to influence their decisions. Established in 2004, the GSLI analyzes and ranks the top 50 countries worldwide as the best destinations for providing Outsourcing activities, including IT services and support, contact centers and back-office support. Each country’s score is composed of a weighted combination of relative scores on 43 measurements, which are grouped into three categories: financial attractiveness, people skills and availability, and business environment.

A.T. Kearney’s 2011 Global Services Location Index finds that wage changes and currency shifts from the financial crisis have led to major changes in rankings within the Index. However, the top three countries have demonstrated remarkable staying power. Thanks to their deep talent pools and cost advantages, India, China and Malaysia have been first, second and third, respectively, since the inception of the Index. Formerly lower ranked states with highly qualified labor once again became viable options amid currency devaluation.

Highlights of the 2011 Index include:

-    Asia dominates the top 10 positions on the Global Services Location Index, with the leaders once again India (1), China (2) and Malaysia (3), as well as Indonesia (5), Thailand (7), Vietnam (8) and the Philippines (9). The different strengths of these countries vary from India, with a deep and broad skill base, to Vietnam, which ranks as the most financially competitive country in the Index.

-    The Middle East and North Africa have become increasingly attractive because of their proximity to Europe and vast talent pool. Egypt is the leader in the region and 4th worldwide; however, the rankings were made before the recent political unrest began. As a result, the political uncertainty and country risk associated with Egypt have dramatically increased and the situation needs to be closely monitored to gauge whether the long-term risk profile will change. The United Arab Emirates climbed to 15th overall, serving as a regional services hub.

-    While many European countries were badly hurt by the financial crisis, Estonia (11), Latvia (13) and Lithuania (14) saw their ratings climb as a result. While hit as severely as many Eurozone countries, they engaged in a process of “internal devaluation,” cutting wages and expenditures, and as a result were able to offer highly competitive cost structures. The UK as well was able to benefit from a sharp drop in wages, and climbed to 16th in the ratings from 31st in 2009.

-    While the United States is the top customer for Outsourcing services, accounting for 63 percent of global IT outsourcing spending, its tier-2 locations rank 18th as outsourcing locations, thanks to a combination of talent and accessibility. Meanwhile, Canada has seen its cost advantage diminish, and it has fallen in the ranking to 39th.

-    Latin America continues to serve the U.S. market well and is expected to grow in importance. This year, Mexico, in 6th place worldwide, leads the region, due to a sharp drop in wages over the year, the increased attractiveness of “near-shoring,” and a well-developed talent pool. Chile dropped to 10th place from 8th, while Brazil was number 12 for the second straight year.

About Ukraine

Ukraine is a part of Central and Eastern European (CEE) outsourcing direction, which has attractive regulatory environment with a close proximity and cultural ties with Western Europe and US.
Ukraine is an emerging free market with a long standing reputation as major technology region with a well developed scientific and educational base. It provides tens of thousands of IT graduates annually, the largest part of which work for outsourcing companies.

Short country profile

- Size: similar to France, population  ~ 46 million

- Time zone: 1 hour ahead of Central European Time

- Travel: about 2 hours flight to major European cities

- Visa not needed for citizens of European and North American countries

- High cultural similarity and common historical roots with Europe

Why Ukraine

The country has very high winner/participant rate in international programming contests, which proves the technological potential and involvement. In world’s largest programming contest for Universities ACM ICPC the famous Taras Shevchenko National University from Kiev (largest city and the capital of Ukraine) took 4th place in 2010 and Lviv National University in 2008. Big countries like China or India have bigger presence in lists of such competitions mainly because of population, but such countries are less attractive for offshoring to Europe and US.

According to last 2010 Intelligence Report from admired UK based IT Sourcing Europe research company, Ukraine was chosen from CEE countries as the most attractive destination for IT outsourcing for clients from Western Europe.

Top 6 outsourcing destinations according to latest IT Sourcing Europe research:

Country rank

US can also benefit from cooperation with Ukraine as an alternative to India and China, because of better cultural proximity, less environmental risks and much more skilled distributed teams able to create business value.