Yuriy Antonyuk, EPAM Ukraine: The growth by 30% is a real scenario for Ukrainian IT

The growth by 30% is a real scenario for Ukrainian IT

With years of experience in IT management, Yuriy Antonyuk took the lead in EPAM Ukraine back in 2005 — from the moment of opening of the first office of this international company in Ukraine. During his management, the Ukrainian division has increased in terms of employees (from 50 to 5700 specialists) while being today the largest player in the IT services market of Ukraine both by the number of employees and financial indicators. 

The problems of the domestic IT market development, challenges for the industry and expectations concerning the future — we discussed all these issues with the head of the industry’s leading company.

GROWTH RATES

The growth rates of EPAM Ukraine are about 20% from year to year, so we can say that we are growing harmoniously with the market. I define the growth as both financial indicators and the number of specialists — the interdependence between these two parameters is still typical for the Ukrainian industry. To my mind, this dependence is a significant advantage today: in Ukraine, unfortunately, there are not so many high-paid jobs, and the growth of IT industry revenues allows to create such jobs.

Over the next 3-5 years, we expect that the number of specialists EPAM Ukraine works with will be more than 10 thousand people, and at the same time, the total number of IT specialists in Ukraine will increase to 200-300 thousand. Of course, everything will depend on the market situation, its ability to develop — I mean the total number and quality of qualified human resources in the country — and the domestic demand for IT services. Ukraine should provide more self- realization opportunities with higher wages. And the IT industry is not a cure-all solution, but it is one of the elements of this system.

Only two factors may prevent such forecasts. The first one is a situation with human assets. Global competition for talents is growing, so we need to really think about how to keep young people inside the country — this is one of the most important tasks for both the government and Ukrainian businesses. Another factor is the state policy and its priorities. In this context, I do not mean that the state should focus just on the IT sector. The country needs a clear action plan while being focused on key areas that generate revenues and, most importantly, provide new jobs.

LEADERSHIP PRINCIPLES

First, EPAM is a global company, so we started our activity in Ukraine with tangible support from our head office. 

Secondly, we have never been an outstaffing business, we have always focused on high value-added solutions, large-scale and sophisticated technological projects. All this allowed to concentrate a strong expertise in different areas within the company. The third element in the success of the Ukrainian EPAM office is investing in talents. In Ukraine, EPAM has become a pioneer and an example of collaboration with higher education institutions. Before we entered the Ukrainian market, IT companies didn’t work actively with universities and colleges, didn’t see all opportunities, and their potential was unclear. We quickly launched cooperation with key Ukrainian universities, starting to support talented second- and third-year students.

Of course, we constantly invest in the development of those specialists who have already joined our company.

COMPETITION FOR TALENTS

Today, the outflow of personnel is a speculative matter. In 2014-2015, the outflow indeed occurred, since people just did not know what to expect from tomorrow. Now the situation has significantly stabilized. 

I believe that in this context, the topical issue is not the outflow of specialists, but the outflow of students that began. This fact should be a matter of concern to all of us. Other countries provide our talented young people with excellent learning opportunities and financial support. And while the specialists who went abroad to work often return to Ukraine, we lose our students for many years to come. Therefore, keeping students in the country and providing them with effective learning and self-realization opportunities, which should be a current state priority, can not be solved without the initiatives supported by the government. 

Another issue is the quality of education. Each year Ukrainian higher education institutions produce more than 100 thousand engineering specialists and about 20 thousand graduated programmers with a university degree. The total number of new specialists meets the industry’s needs, but there is a very small number of really qualified personnel.

In my opinion, these two aspects are the most acute issues in the context of a lack of qualified human resources and require the maximum attention from both the government and market players. And all the talk about the massive emigration of Ukrainian developers is nothing but speculation and populism.

REGIONAL SPECIALIZATION AS AN INSTRUMENT FOR BUSINESS DEVELOPMENT

EPAM Ukraine has representative offices virtually in all key regions of the country: Kyiv, Kharkiv, Lviv, Dnipro and Vinnytsia. Each of the offices has its own focus area. For example, our Vinnytsia colleagues are developing solutions in mobile segments, our specialists from Kyiv have strong positions in e-commerce and automotive cloud solutions. Our Kharkiv office was originally established to work with Oracle, but over the time, it began to specialize in digital transformation services — massive digitalization of clients’ businesses. By the way, the EPAM Java Competence Centre head-base is also located in Kharkiv. Artificial intelligence, work with huge data sets, machine learning are developed competencies of EPAM developers in Lviv.

At the same time, all our offices have no strict limitations regarding the projects, which their specialists work on. It’s just that each city has a certain historically developed profile expertise.

Due to such a specialized approach, our colleagues from different parts of the country can feel their uniqueness. This model allows to assign clients to different offices, instead of concentrating all them only in the company’s metropolitan office, and develop all regions, where the company operates, in a balanced manner.

WHY DOES THE COUNTRY NEED THE DOMESTIC IT SERVICE MAR-KET?

To make sure that some of the industries is really successful within the country, the external and domestic market should have approximately the same value. Any industry doesn’t operate properly without its harmonious development in the local market. However, as of today, the value of the domestic market of IT services in Ukraine is much smaller than the export share. So, if we are talking about further rapid development of the information technology industry, we simply can-
not ignore the problem of domestic demand.

Traditionally, there is a little interest in domestic products in Ukraine. And it is even smaller when it comes to IT services, because digitalization is far from being the top priority for most local players. To change things, IT industry representatives should take the first step by providing their services to local organizations or pro bono institutions and considering their work in the domestic market as corporate social responsibility and investments in the future. EPAM Ukraine is taking these steps right now by supporting a number of public and social projects with its expertise.

The state cannot take no action in this situation. In my opinion, the government should stimulate the use of technological solutions by other industries, introduce incentive for businesses that use Ukrainian IT products or services. The increased demand will lead to the increased number of technology companies focused on the domestic market.

EXPECTATIONS FROM THE MARKET

If current conditions are maintained, the growth rate of the IT industry will be 20-25% in the coming years. Of course, this is not bad. But the Ukraine’s potential in IT products and services is much greater. Global demand for technological solutions is increasing and gaining some ground. 

The industry’s growth by 25-30% is possible in the near future if the government and the state as a whole will focus on priority sectors and begin to address urgent problems, such as the employment of foreigners, the development of human capital and education, the abolition of obsolete legal barriers, the development of ecosystems and the creation of technological parks, in a comprehensive manner. Indeed, it is a real and “moderately optimistic” scenario.

KEY PRIORITIES

Apart from the development and modernization of the educational system in Ukraine, the definition of key state priorities and the work on the domestic market development, the Ukrainian IT community should think about forming a common vision of the industry’s future. 

Undoubtedly, we can just earn money. But this is a losing option. By doing so, we will never be able to compete in this area, for example, with India, which only now has about 3 million IT specialists. This is the first point. 

The second point is total automation presenting today in all areas of our lives, including the IT sector. In the future, only those countries, those industries and those specialties that will have a creative component will benefit. Therefore, taking into account these two factors, we should understand that the industry requires a unified plan of strategic development not for 3-5 years, but for the coming decades. 

Our chance to stand out on the global market is to work on creating sophisticated products and services with a high creative component, and therefore with significant added value.