Overviewing the Current Business Landscape
IT outsourcing remains one of the most debated topics among entrepreneurs. Some experts argue that such operations require extensive control to ensure satisfactory performance quality. However, starting an outsourcing company can be a critical strategic move for optimizing resource allocation and reducing costs. In this regard, Digest.Pro has decided to share case studies from Odessa to help founders determine the best business model for their needs.
Outsourcing Company
Opening an IT outsourcing department is a popular decision among business owners, and scalability with flexibility of units comprise primary advantages in choosing this model. Most ambitious startups operate as a software outsourcing company that significantly stimulates the labor market and rise of new talents. It is also a unique opportunity to advance in the regional market, which is another valuable aspect of outsourcing.
Pros
- Competitive salaries offer mutually beneficial terms for contractors and founders.
- Access to the latest developments and technologies provides a unique opportunity for developers to create original ideas, which makes software development outsourcing attractive for IT professionals.
- Outsourcing revitalizes organizational culture and vision of business values, while collaborative efforts positively impact innovation.
Cons
- A software outsourcing company works with strict deadlines and has limited autonomy.
- The management team must possess advanced planning and scheduling skills to succeed.
- Since IT outsourcing is not a standalone unit, its operations are entirely dependent on the projects assigned to it.
In-house Company
In-house companies differ from outsourcing models by having internal teams responsible for managing all core operations, including strategic decision-making. This business model allows founders to retain ownership of the developed product, directly influencing revenue distribution. Therefore, it is important to consider the additional pros and cons of running such an enterprise.
Pros
- Direct control over processes, quality standards, and product development.
- In-house teams develop expertise specific to the company’s products, services, and systems.
- Better communication and alignment with the organizational culture.
Cons
- The HR department faces unique challenges in retaining a qualified workforce to maintain product quality and uphold the foundations of organizational culture.
- Maintaining an in-house team requires higher salaries, benefits, office space, training, and additional expenses, which is a costly model compared to outsourcing.
- Increased operational risks can affect business continuity.
Odessa as Home to Ambitious Projects
The Odessa region holds a prominent place among European tech hubs. The city ranks fifth in Ukraine regarding the number of IT professionals per 1,000 residents. According to DOU.ua, 150 companies with offices are actively operating in Odessa, with many employing over 100 people. Notable companies include Provectus, Luxoft, Lohika, Ciklum, Sigma, and AB Soft. According to the latest available data, approximately 6,000 IT professionals are registered in the Odessa region.
Southern Palmyra: A Leading IT Hub
More than 30 software outsourcing companies are based in Southern Palmyra. These companies host large-scale conferences and tech meetups. Additionally, product-based companies in Odessa have grown out of local startup ecosystems. Some well-established brands, such as Readdle, Looksery, and Augmented Pixels, have expanded to Silicon Valley, gaining global recognition.
The Netpeak Case
The Netpeak marketing agency was founded in 2006. Over the years, Netpeak specialists have introduced five products for clients, with notable successes such as Ringostat and Serpstat. Some of these marketing services have evolved into independent businesses and are now part of the Netpeak Group.
Concluding Thoughts
Current global trends in the IT and tech sectors are gradually blurring the lines between traditional business models. Outsourcing firms, once focused solely on providing services, are now developing their products, while in-house companies increasingly engage in custom development projects. For example, HYS Enterprise, an international outsourcing company with offices in Amsterdam and Odessa, is developing Epicflow, their project management solution. The startup has shown strong performance and is expanding into global markets. As companies explore innovative strategies, combining outsourcing with in-house product development may serve as the foundation for long-term success.
