Thinking Big; Working Hard; Delivering Value to Clients and Building Relationships

emerging europe ukraine

Read the latest Outlook on Ukraine 2017 special report

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The popularity of IT is growing, which attracts more students to the IT courses in high school institutions and means the number of engineers graduating university within the next three-five years is increasing.

Ukrainian Quartsoft has recently started its first own product — SoftFarm, an agricultural management system and has enlarged its game development department specialising in Facebook games, e.g. CoralIsle, says Serg Kondratuk, CEO at Quartsoft. He spoke to Jerry Cameron about Ukraine’s IT outsourcing potential, his company’s development and future prospects.

Quartsoft has been on the market for almost two decades. What does that mean for your clients?

Our company was set up in 1999. I would say Quartsoft’s presence for such a long time, in the outsourcing market, has been a benefit to our clients for the following reasons: We operate as a consultant who does not just do a particular scope of development work but delivers added value by assisting in the decision-making for the technical, managerial and financial sides of any project.

Additionally, during these years the company has evolved its communication with the help of: branch offices all over the world (Ukraine, Russia, UK, and the US); language training for project managers and managerial staff that has eliminated the language barrier between the team and the client, and eased payment transactions. This means our clientele use suitable and affordable payment tools to pay for our services.

Quartsoft outsourcing emerging europe
Quartsoft’s management (courtesy of Quartsoft)

How has IT outsourcing changed over the years, from your perspective?

At the moment, there is a great trend towards globalisation. Large companies are boosting their talent acquisition, thus they have to invest in staff education and the staff is gaining more expertise. Smaller companies, such as Quartsoft, are in demand for their ability to deliver values such as management flexibility, speed in decision-making, attention to staff expertise and qualities and the ability to facilitate internal cross-functional relationships. These abilities allow Quartsoft to create scalable project teams with expertise that matches the project requirements and team members exactly, ensuring synergy which is rarely achievable in case of out staffing.

Other emerging markets supply developers with lower rates and run aggressive cost competition, though they very rarely add extra value to their services. This situation is not the same with the bigger projects, which usually go to larger companies, the influence is felt more in short-and mid-term projects where small and middle sized companies have to compete for them.

You say your mission is to help businesses, especially new start-up ventures, save the costs and time of implementing their web presence, digital commerce and custom web/mobile applications, by outsourcing their IT projects to an expert team in Ukraine. Why are start-ups your target?

Quartsoft aims at start-ups because this is the field where Quartsoft can add the most value to the outsourced development work which is already included in our rates and standard project management procedures. These values are project risk analysis, assistance in decision-making, project bottleneck forecasting and offering recommendations on implementation and design.

The longer and more complicated the project is, the bigger the value of a technical partnership with Quartsoft in outsourcing projects. We are not just developers; we are consultants. Our clients rely on us for preparing their minimum viable product (MVP), getting venture financing and scaling their business up. We are also interested in understanding their projects completely and we seek long-term partnership with the people behind every project.

You mentioned a few markets of operations. How important is the US market for you, since you have an office there, and which other markets would you like to reach out to?

The US market is paramount, as it is responsible for the vast majority of the projects we have handled, from the moment the company was founded. In 2015, we became very interested in the UK, the EU and the Scandinavian market, so we set up a sales office in Kaliningrad and a representative office near London.

What are the key services or products that you think your foreign customers are most interested in?

We think our foreign customers are most interested in full-stack outsourced web development, which we handle from scratch, starting from the project prototype and functional requirements which are defined at the project’s initial phase. All this is offered with one point of technical contact, which is responsible for consulting, recommendations, team scaling and management and reporting.

If you look at your competition: what does it look like; who are your main competitors?

Quartsoft competes with companies of about the same size, which is about 75-200 developers with a presence on the target market, either personal or a stable client base with strong references.

Ukraine has great potential to be an IT outsourcing star. How do you see the development of the sector in the country?

The popularity of IT is growing, which attracts more students to the IT courses in high school institutions and means the number of engineers graduating university within the next three-five years is increasing. The big companies will need to acquire all the available talent, increasing their salaries, offering compensation packages, relocation to EU and other benefits, which will further stimulate the supply of IT graduates.

Remuneration packages will increase up to the moment when salaries equal those in the target markets of large enterprises. At that moment the dusk of outsourcing will begin for those companies that only compete on price competition.

You are a mature company, and your origins seem as if they happened thousands of years ago, but I’d like to take a step back and look at the origins of the company. How did it all start and where did the idea come from?

The company started with the inspiration of and a background ensured by the Donbas State Machine-building Academy. This alma mater had been the major source of talent in the field of engineering for heavy machine-building, programmable lathes and applied information technology, for years. The combination of a strong engineering background, practical multiple technology awareness, inspiration in automated design and programming, which was popular at that time, became the cornerstone of the company’s success at the beginning.

Strong competencies became the pillars of the technical flexibility of the company, such as engineering synergy, a cross-functionality of the staff, a system’s approach to knowledge and expertise, a synergy effect of people with a common rich technical background in various application technologies and cross-platform awareness in our early employees. The four founders of the company created the approach and started the traditions behind our current close cooperation with the Academy and we still strengthen our skills
through its graduates today.

What were the challenges you faced when you started the company?

The same challenges that are normal for many businesses: talent acquisition, keeping talent, team management and procedure development for each critical size of the company while it was growing.

If you were to give some advice to a company that is starting from scratch, right now, and is from the CEE region, what advice would you give them?

Think big; work hard; be open to ideas and people; drive value to your clients and build relationship networks.

How do you imagine your company in, let’s say, 20 years?

Quartsoft could build more competence, bring up more talent and work on bigger and more challenging projects on the one hand, and develop its own products on the other hand. It means evolving together with the market.

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