Ukraine Archives - Everest Group

The Ukraine-Russia War is Impacting Global Sustainability Initiatives and Derailing Progress in Meeting SDG Goals | Blog

August 4, 2022

The Ukraine-Russia War has hindered the progress of nations and businesses toward achieving global sustainability goals. Along with its humanitarian and economic consequences, the crisis has altered investment in energy, defense, and autocratic states. Can the enthusiasm the world felt just seven years ago about reaching Sustainable Development Goals (SDGs) be recaptured, and what does the future hold for sustainability enablement service providers? Read on to find out.

The optimism around achieving SDGs, also known as the Global Goals, has waned since its adoption by the United Nations in 2015 with the promise of improving people’s lives and preserving natural resources.

Global sustainability initiatives have been impacted by the Ukraine-Russia War, the pandemic, and supply chain issues. According to the UN, income for about 60% of the global workforce declined during the pandemic. Supply chain issues further exacerbated the economic contraction and humanitarian losses by inflating food and fuel prices.

The war is impacting progress in accomplishing SDGs, directly through its humanitarian and economic consequences, and indirectly through its effect on Environmental, Social, and Governance (ESG) investments.

The following three major challenges have emerged due to changing perceptions about ESG investments in light of this crisis:

The war has ramifications on global energy transition

The Ukraine-Russia war has slowed down the global energy transition to renewables in two ways:

Increased metal and gas prices slowing renewable technology investment – The region is a leading supplier of “energy transition metals” like nickel, palladium, copper, and lithium. Russia accounts for 7% of the world’s mined nickel and 33% of the world’s mined palladium, which are used in electric vehicle batteries and to reduce automobile emissions, respectively. Ukraine is the largest supplier of noble gases like krypton, which is used in renewable technologies. The war has reduced the already sluggish rate of renewable technology investment by increasing the prices of these metals and gases.

Ramped up coal production and fossil fuel investment – Russia accounts for 17% of the world’s natural gas supply, which is perceived as a transition fuel globally. Before countries develop sustained sources of renewable energy, natural gas is replacing fossil fuels due to its lower carbon emissions. The issue is more pronounced in Europe, as about 80% of Russia’s natural gas is exported to Europe, fulfilling about 40% of Europe’s gas demand. The war has inflated gas prices. Although the US has agreed to supply more gas to the region, this raises the question of sustained gas supply and puts pressure on European governments to accelerate their net-zero strategies. The market is optimistic that Europe will transition to clean energy faster than expected because it needs to become energy self-reliant.

Slow investment in renewable energy has further dipped since 2018. While renewable energy requires patient and risk-tolerant investors, fossil-fuel investment generates considerable returns quickly due to the massive existing hydrocarbon infrastructure. In the war’s wake, fossil fuels are seeing an investment frenzy, with Canada, the US, Norway, Italy, and Japan increasing production. Many countries across Europe again are ramping up coal production to avoid depending on Russian gas. In the short run, it seems that the world has taken steps back on global warming

Investment in defense is being reclassified as sustainable

Before the war, steering away from investing in arms and ammunition was considered prudent and ESG conforming. However, the war has brought back fears of traditional warfare. Now, many nations have started taking a U-turn from this narrative by categorizing defense investment as sustainable for national security and global alliances. Many global defense suppliers’ share prices spiked upward the first day Russia invaded Ukraine.

Many European nations, including Germany, Poland, and Sweden, have announced increases in their defense budgets. SEB Investment Management, a leading asset-management firm in the Nordics, has revised its sustainability policy to allow some of its equities and corporate bonds to be invested in the defense sector. With skepticism associated with traditional warfare restored, investors and governments are bound to pump more money into arms and other defense products.

Investors are steering away from autocratic states

Investors are facing heightened reputational risks for associating with authoritarian regimes. The boundary between investing in government bonds of an autocratic state and investing in companies conducting business in/with the autocratic states is now blurred for investors. Western investors are striking Russia off their investment list, especially if the investment is ESG-compliant. This can dampen investments in other autocratic states and the businesses associated with them.

How does the war impact sustainability enablement service providers?

The war has temporarily derailed the uptake of renewable energy investments. To start, this will impact enterprises’ Scope 2 emissions reduction goals. Scope 2 emissions are generated from purchased electricity, and reducing these emissions requires enterprises to turn towards renewable electricity sources.

The sustainability enablement technology industry also will experience a short-term supply crunch of semiconductor chips, which is an important input in producing sustainability technologies.

To deal with these choppy waters, organizations will need help from consulting and technology providers to shift their sustainability mix to access net-zero strategies to still achieve their committed targets for global sustainability initiatives.

Moreover, as the sustainability ecosystem matures, forward-looking investments in scaling undertakings such as enhancing trust in data and reporting (avoiding greenwashing claims), scaling operations to accelerate net-zero targets, and creating persistent governance systems will continue to create momentum.

To further discuss global sustainability initiatives, contact [email protected], [email protected], and [email protected]

You can read more about the impacts of Russia’s military action in Ukraine on services jobs and global sourcing in our blog, “Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations?”

Future Predictions of the Ukrainian IT Industry | Podcast

June 6, 2022

The war in Ukraine has been ongoing for over 100 days. It’s already impacted the IT sector on both a local and global scale. More than 14 million people have fled their homes since Russia’s invasion of Ukraine, and the IT industry has been hit hard. It was booming as exports rose by 36% from 5 billion to 6.8 billion in 2021. Although maybe once recognized as a location for cheap labor, it is no longer considered this way, but a location for highly experienced engineers carrying out difficult tasks.

In this podcast, Peter Bendor-Samuel, CEO of Everest Group, and Anna Dziuba, VP of Delivery at Relevant Software, discuss:

▪️ Why Ukraine’s IT Industry has been so successful
▪️ Why businesses go to Ukraine for outsourcing
▪️ Will companies continue to go to Ukraine for outsourcing?
▪️ How will wages change around the world for tech professionals in the face of a recession?
▪️ What does the future hold for the Ukrainian IT economy?

Tune in to the podcast

What You Need to Know in Europe’s Next Wave of Technology Regulation | In the News

May 24, 2022

Europe technology and data sovereignty are back in the spotlight because of two recent events, the war in Ukraine and its cyberwarfare implications and EU lawmakers agreeing to new rules to limit the market power of Big Tech platforms through the Digital Markets Act (DMA) and Digital Services Act (DSA). Everest Group Partner, Nitish Mittal, discusses this topic in his article, What You Need to Know in Europe’s Next Wave of Technology Regulation.

Indian IT Companies Pull Plug on Russia | In the News

April 15, 2022

Indian software services companies are moving their limited operations out of Russia over geopolitical tensions arising out of its invasion of Ukraine, while helping clients maintain business continuity by shifting work to other locations.

“We don’t expect technology services demand to cool down in the short to medium term because of the war. Pent-up digital transformation spends by large global 2000 clients is a secular trend and continues to aid pipeline and revenue growth for most IT and digital engineering service providers. However, some deceleration in growth is expected in 2-4 quarters as recession and inflation-related fears become more prominent,” said Nitish Mittal, Partner at Everest Group.

Ukraine IT Sector: Resilient, Agile, and Hopefully Here to Stay | Blog

April 14, 2022

The Ukraine IT sector has grown as a result of, and not despite, its humble, post-Soviet origins, and characteristics of agility and resilience appear to be serving it well. Read on as we share the viewpoint of our expert who traveled to Ukraine after the dissolution of the Soviet Union in this blog.

In March 1992, four months after the dissolution of the Soviet Union, I traveled to Ukraine to attend a hastily convened conference on the liberalization of post-Soviet telecommunications in the Commonwealth of Independent States. Delegates flew into Simferopol on a Swiss Air charter, and we took a rickety bus ride across the Crimean Peninsula to Yalta, the site of the eponymous wartime conference.

The conference was chaotic but enlightening: Soviet telecommunications had been so Moscow-centric that at independence, Ukraine did not have a singular, state-owned telecom carrier and virtually no direct international circuits. Disparate local networks loosely managed by the Ministry of Transportation and Communications were spread across Ukraine’s 22 administrative districts. These networks became Ukrtelecom in 1994, but outdated and inefficient fixed-line service was overtaken by rapid mobile take-up from the mid-1990s.

The results? A generation of Ukrainians grew up with mobility as their default. And the legacy of decentralized infrastructure led to a fragmented internet marketplace with ten or more internet service providers. Mobility and decentralization spawned an entrepreneurial and healthy, if not spectacularly large, IT services sector that now has some 290,000 professionals – 79% of them “individual entrepreneurs,” that was worth over $6.83 billion in export revenue in 2021, according to industry association IT Ukraine.

The Ukraine IT sector, innately agile and resilient, was in many ways prepared even more thoroughly for the dislocation caused by the Russian invasion, having endured 20 months of pandemic-enforced remote working. Anecdotal evidence, popping up in podcasts, on LinkedIn, and in mainstream media, suggests that the Ukraine IT sector is very much still working. Companies like Intellias and Sigma Software in Lviv, GeeksForLess in Mykolaiv, Reface in Kyiv, and many more, have contributed, according to IT Ukraine, quoted in an April 6 article on DOU.ua, to “almost 85% of [IT] companies operat[ing] in a normal business rhythm.”

How long the Ukraine IT sector can maintain that normal business rhythm, of course, remains uncertain. While some look to post-war opportunities in an independent Ukraine, created by the outflow of business from Russia and possibly Belarus, the current reality is that the reduced appetite by foreign businesses for risk and the execution of business continuity plans have meant that work has started to move outside Ukraine.

That said, I expect a significant share of work that is currently being delivered, and that can continue to be delivered remotely, will remain longer-term with Ukrainian companies or contractors, irrespective of whether specialists are operating in western Ukraine or outside of the country.

Indeed, Lviv IT Cluster, a body representing business, academia, and local government, claims that upwards of 40,000 IT specialists have relocated to Lviv in western Ukraine since the invasion, swelling the available talent headcount in the city to between 70,000 and 100,000. For now, internet and power in Lviv still function, and as long as they do, the Ukraine IT sector will find a way to continue its normal business rhythm.

To discuss the Ukraine IT sector further, please reach out to [email protected] or contact us.

Learn more about the current impacts in the Ukraine region in our LinkedIn Live session, How to Manage the Ukraine-Russia Impact on Service Delivery.

Infosys Has No Plans to Do Business with Russian Clients: CEO Salil Parekh | in the News

April 13, 2022

Against the backdrop of the ongoing Russia-Ukraine conflict, IT major Infosys on April 13 made it clear that it has no plans to do business with Russian clients.

According to data from Everest Group, there are close to 70,000 to 100,000 highly qualified workers in digital engineering and IT skills who will face disruption. Of this, close to 30,000 are working for third-party service providers across banking and financial services, retail, automobile, and healthcare. About 20,000 are employed in global business service centers in Ukraine, and another 30,000 in Belarus and Russia for third-party services providers and GBS.

Global Supply Chain Management Strategy in Times of Disruption | Blog

April 12, 2022

The Russia–Ukraine war is further disrupting already deteriorated global supply chains. With the high political tensions, service providers need to implement a mix of short- and long-term approaches like reshoring, ally shoring, and partnerships to overcome the crisis. Read on to understand Global Supply Chain Management Strategy and the global supply chain issues and strategies to build greater resiliency in times of disruption.

Global supply chain issues and strategies

The global supply chain has been upset over the past two years, starting with back-to-back global economic setbacks that impacted nearly all goods and services in every industry around the world.

While the supply chain hit on essential goods and medical services from COVID-19 is now plateauing, rising tensions between Russia and Ukraine have only added to the already strained global channels and delivery.

The ripple effects of the Russia-Ukraine war can be seen in rising oil prices, trade restrictions, and financial sanctions. Even though Russia is receiving economic penalties, countries that depend on Russian goods and services have to begin looking for an alternative supply. Similarly, countries depending on Ukraine’s IT outsourcing services are suffering as well.

With these recurring global shocks unsettling global trade dependencies, the changing dynamics of international relations, and the growing uncertainties, governments across the globe are moving to implement policies to make supply chains more resilient.

Impact on service providers

During the pandemic, the Information Technology Sourcing (ITS) industry observed a dramatic 3% fall in overall growth, and the Business Process Sourcing (BPS) industry growth lagged. The Russia-Ukraine conflict is estimated to impact between 70,000 and 100,000 service professionals in Ukraine, Russia, and Belarus, including highly-qualified workers with digital engineering and IT skills.

The immediate concerns go beyond ITS to Engineering Services (ES) since Ukraine has been a go-to-market with a mature talent pool for both sectors. The full trickle-down effect on BPS is yet to be fully seen. Although BPS’ dependency on Ukraine is minimal, the conflict’s escalation to neighboring countries is expected to more noticeably impact Eastern Europe, which forms the third-largest outsourcing location, following India and the Philippines.

Eastern Europe hosts several service providers across industry verticals, including Banking and Financial Services (BFS). Sixteen major service providers already directly engaged with Everest Group are located in this region, enabling different processes across the BFS vertical, including capital markets, banking operations, and financial crime and compliance. Outsourcing adoption across the payment vertical had been growing as well and could be impacted.

The conflict majorly derails Ukraine’s focus on driving Fintech and tech and banking collaboration that started in 2018 with major FinTechs in Ukraine raising US$7 million in funding. In addition to the growing concerns among service providers, the increasing sanctions have already resulted in volume spillover, and firms are starting to become more vigilant in their strategies to brace for the future.

Global supply chain management strategy to consider

Given the latest scenarios and rising political tensions, countries increasingly are investing in shifting their shoring operations to form leaner and more robust supply chains. This move has been underway since nations began reducing their dependencies on China following the COVID outbreak. Japan has been incentivizing such shifts and encouraging private companies to move operations to countries like India, with friendlier ties than China. Taking a similar approach, the US is now limiting its dependencies on Russia for oil and looking to be self-sustainable in the longer run.

On the financial services front, long before the Russia–Ukraine war, countries have been encouraging citizens to limit dependencies on foreign platforms for their financial transactions. This can be seen by Russia’s MIR and China’s UnionPay advocating for using Rupay for all card payments and lessening its dependence on Visa and Mastercard. Yet, Rupay’s technology operations are partially sourced by an American technology provider. Thus, the question of complete independence, reshoring, or nationalization of financial services is rather difficult.

With rising global tension and the downturn of cyclic economic globalization on the horizon, firms need to consider remediation action for the future. Let’s explore some of the global supply chain management strategies to consider for the near- and long-term.

Five global supply management strategies

Below we have identified popular global supply management strategies and their impact on costs and investments:

	Strategies	Impact
1.	Friend shoring or ally shoring: This form of outsourcing where countries with friendlier diplomatic ties leverage their connection to ensure business continuity is growing. Post-pandemic, it has been imperative for enterprises to focus on business continuity, especially with growing outsourcing demand across industries such as banking, healthcare, insurance, etc., and for a wide range of capabilities, including financial accounting, customer experience management, and human resource management.	Short-term strategy
2.	Reshoring: While not a new concept, reshoring is increasingly being explored now. In 2010, US firms brought back more than 1 million jobs post the economic downturn. Reshoring helps save costs, strengthens a firm’s supply chain, and can even bridge language and cultural gaps. But reshoring is not possible for everyone if resources are limited.	Long-term strategy and investment
3.	Talent upskilling: Given the rising talent shortage, upskilling internal resources should be in the cards to provide better leverage and control over internal resources – even without the current tensions.	Long-term investment
4.	Partnerships: Partnerships within existing firms in the country should be explored to bring capabilities and processes nearer to home. In addition, partnering enterprises can leverage existing service provider relationships to fill gaps in capabilities. Firms also can form public-private partnerships with governments and state-funded universities to provide skills training and then hire new talents.	Long-term investment
5.	Automation: Given the rise in digital transformation and the adoption of newer technologies, an automation-first strategy is imperative. Automation of high-frequency tasks can speed up processes and decrease human dependency on outsourcing partners.	Long-term investment

In today’s volatile environment, service providers need to assess and weigh the options before making shoring decisions to maintain a balance between cost competitiveness and labor shortages.

With the current disruptions, reshoring and friend-shoring strategies should be explored in the short term. Moving forward, when the climate is more stable, cost optimization and efficiency should be prioritized. Understanding the issues and balancing short- and long-term global supply chain management strategies will help firms get through this disruptive period.

For more about the successful mix of approaches the industry has been using across various domains, see our State of the Market reports.

Read more about the Russia-Ukraine conflict and potential impacts to nearshore European countries and the larger global services industry in our blog, Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations?

To discuss global supply chain issues and strategies, contact us.

Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations? | Blog

March 31, 2022

The Russian military action in Ukraine has already significantly impacted thousands of services jobs in this region, but the potential reverberations to nearshore European countries and the larger global services industry could be far more damaging – making it essential to integrate geopolitical risk management in your decision-making now. Learn the immediate steps to protect against risks during these increasingly unpredictable times as we continue our expert analysis on this critical issue.

In our recent blog, we wrote about service delivery risk in Ukraine. Since Russian forces invaded Ukraine on Feb. 24, almost 150 companies operating out of the region supporting IT, Engineering, and Business Process services have ceased or at least suspended operations in the region, impacting thousands of jobs.

But the crisis is not limited to Ukraine, Russia, or even Belarus. Several Eastern European countries such as Poland, Hungary, Slovakia, and Romania are directly impacted. These neighboring countries are taking in refugees, providing financial aid, declaring states of emergency, preparing for military confrontation, and most importantly, witnessing a significant drop in employee morale as individuals and families experience anxiety over the recent events.

These nearshore European countries – Poland, Hungary, Romania, Slovakia, Czech Republic, Latvia, Lithuania, and Estonia – collectively host nearly ~1.5 million Full-time Equivalents (FTEs) in global services delivery, accounting for 15-18% of the total global services workforce worldwide.

We are advising our clients that significantly rely on Central Eastern Europe to stress test their Business Continuity Planning (BCP) strategies at the same time hoping that the ongoing conflict doesn’t escalate to the neighboring countries.

But while we hope for the best, we must prepare for the worst. One of the lessons from this crisis is to not assume that diplomats have everything under control. The events of the past few weeks are extremely disturbing and could embolden authoritarian leaders in some of the other countries.

Below is our analysis of some of the hostile geopolitical equations globally that could impact the global services industry in the event of a major escalation in the associated countries:

	Risk scenario	Likelihood	Locations impacted	Global services Impact (number of centers and FTEs)	Key players with large footprint
1.	Russia versus NATO	High	Poland, Hungary, Romania, Slovakia, Czech Republic, Latvia, Lithuania, and Estonia	~1,000 centers 1.5 million FTEs	Amazon, Coca-Cola, Deloitte, Dell, Microsoft, E&Y, Nokia, Huawei, IBM, HCL, Cognizant, Accenture
2.	China versus Taiwan Or direct US versus China	Medium-High	Taiwan (directly) China (if US imposes sanctions on China)	~400 centers 320,000 FTEs	Barclays, Citigroup, ExxonMobil, HSBC, Microsoft, Accenture, Capgemini, Tech Mahindra
3.	Gulf tensions – Iran versus US and Israel	Medium	Mainly Iran. Could impact Kuwait, Iraq, and Lebanon in case of escalations in the region	~100 centers	Alibaba, Apple, AT&T, General Motors, Volkswagen, LG Electronics, Accenture, Genpact, IBM, HCL
4.	India versus Pakistan	Medium-low	Locations in Northern and Western parts of India (including capital city); Northwestern region of Pakistan	~2,000 centers 3.1 million FTEs	Amazon, Bank of America, Citigroup, Ford Motors, Dell, Nestle, Microsoft, Accenture, TCS, Wipro, IBM
5.	India versus China	Medium-low	Locations in Northern parts of India; major global services hubs in China are too far out from border regions	~2,500 centers 3.3 million FTEs	Citigroup, ExxonMobil, HSBC, Ford Motors, Nestle, Microsoft, TCS, Wipro, IBM, Capgemini, Tech Mahindra

Risk management actions to take

While we can only hope that none of the above-mentioned scenarios take place, organizations need to be well-prepared to manage the risk impacts. Everest Group advises the following:

Move geopolitical risk management up your enterprise agenda
- New risks require newer risk management systems. While most global companies invoke reactive measures to the changing risk environment, they lack integrated capabilities for managing the cross-enterprise impact of geopolitical risk. Integrate geopolitical risk management into a systematic process and move risk functions beyond the formal views of governance/administration to influence your firm’s core strategy
- Deploy refreshed risk management mechanisms and take a portfolio view of risks to better understand the implications and interdependencies
- Empower risk management teams with access to geopolitical intelligence relevant for not just short-term, but long-term challenges and opportunities. Ensure that updated assessments and implications of geopolitical risks regularly feed into the decision-making machinery across the firm
Anticipate business-risk implications
- Examine and understand potential business consequences of geopolitical risks. More often than not, geopolitical movements lead to regulatory changes (e.g., sanctions), thereby impacting corporate risk exposure, with implications for tax rates, cross-border trade, and exchange-transfer risk
- Scan the horizon for changing sanctions and resultant changes to your third-party ecosystem
Rehearse and stress-test the readiness of contingency plans regularly
- Consistently run tests of work from home and other BCP models to ensure familiarity and effectiveness (in terms of devices, connectivity, collaboration, and project management tools)
Strengthen digital security and ensure tech readiness
- Cyber risks are increasingly associated with political origins, including war and terrorism. Keep a hawk-eye on potential threats related to cybersecurity and invest in strengthening network infrastructures and stronger encryption algorithms to insulate against potential cyberattacks
- Be aware that historical evidence suggests that cyberattacks are not restricted to just the conflicted zones and often spill over, causing collateral damage in neighboring countries and also putting them at risk
Maximize delivery portfolio resiliency
- Diversification is becoming mission-critical. Instead of operating large hubs in one or two locations, look to dip toes in multiple talent pools across locations (while simultaneously assessing fragmentation risks)
- Reassess your Global Business Services (GBS)/shared services and vendor portfolio to ensure enough overlap and redundancy across both operational and management processes
- Invest in process simplification and re-design to reduce hand-offs, decision-points, and dependence on people
Increase BCP-led talent management
- Cross-skill/cross-train the workforce across centers in critical processes to enhance BCP and resilience, and manage workloads in case of a country/center work stoppage scenario
- Maintain select forms of dispersed/distributed workforce (not co-located with delivery centers). Examples include remote working models or “pods,” contingent and gig workforces

The nature of geopolitical risk is changing and becoming increasingly unpredictable. It is now imperative for organizations to integrate geopolitical risk management in decision-making processes across the organization.

If you have questions or would like to discuss this topic, please feel free to reach out to us at [email protected], [email protected], or [email protected].

As we continue to watch the events in Ukraine, you can access our resource center where you’ll find our consolidated coverage of this evolving situation, or watch our LinkedIn Live event, “How to Manage the Ukraine-Russia Impact on Service Delivery.“

How the Russia-Ukraine Crisis Can Impact Customer Experience Management Services and Alternative Locations to Consider for CXM Outsourcing | Blog

March 23, 2022

With Eastern Europe serving as a major hub for Customer Experience Management (CXM), the Russia-Ukraine crisis poses a serious threat to service delivery. Now is the time for enterprises with large presences in this region to diversify delivery locations and mitigate risks.

Read on for our expert analysis on the state of CXM outsourcing here, the potential disruptions, and alternative countries to consider for multilingual customer service and tech support to ensure continued CXM services.

Just as the world was looking to emerge from the global pandemic that caused a seismic shift in work and collaboration models, another highly disruptive crisis looms on the horizon. The recent geopolitical developments in Ukraine and Russia have caused the whole world to take notice, and with new sanctions kicking in every day, many are already preparing for adverse scenarios.

Given that this rift involves nuclear heavyweights in Russia and the NATO countries, the consequences could be far-reaching for the entire world. Consequently, these tense developments have created a lot of uncertainty and consternation for companies having a presence in the affected region.

Eastern Europe, which forms the immediate vicinity of Ukraine, is a major hub for delivering a plethora of customer experience management services for end-users both within and outside this region. Let’s take a look at the potential impacts to CXM outsourcing and alternative locations for CXM services.

Eastern European region CXM snapshot

As a strategic location for CXM services, eastern Europe offers strong multilingual capabilities, relatively inexpensive skilled talent, and cultural similarities and a minor time difference to western Europe. Leading global enterprises and Europe-focused players have a significant footprint in this region, putting them at risk in the current situation. The heatmap below illustrates the country-wise vulnerability index based on the number of delivery centers and corresponding CX agents present in each of them.

Potential CXM services disruptions and alternate solutions

Due to its skilled and relatively inexpensive IT talent pool, Eastern Europe is highly leveraged for its multilingual support for not only the regional languages such as Russian, Czech, Serbian, etc. but also for many of the major west European languages such as German, French, English, Spanish, and Italian. Poland and Romania also are sizeable talent sources for technical support.

Major cities in Ukraine such as Kyiv and Dnipro have been the most severely impacted by the armed conflict with Russia, and enterprises must accelerate Business Continuity Planning (BCP) measures to relocate affected CXM agents to safer parts of the country or outside of Ukraine to provide immediate relief.

If the conflict escalates beyond the borders of Ukraine in the coming weeks, major cities in Romania, Poland, and Bulgaria – which have the highest concentration of CXM delivery centers – could also be directly impacted.

We also envision a potential threat of cybersecurity breaches in Ukraine, inevitably causing collateral damage to its neighboring countries as well. While no one can foresee how the situation will unfold or its duration, enterprise clients must stay well informed and start devising backup scenarios and activate disaster recovery plans if needed. Although we believe the disruption will be temporary, a long-protracted war can’t be ruled out.

Alternative locations for CXM support services

Considering the uncertainty and volatility, let’s look at some viable alternate locations to help enterprises mitigate their emerging risks:

Multilingual customer support – Enterprises should consider new offshore and onshore locations to support major European languages for CXM outsourcing, as illustrated below:

Tech support – The best strategy for enterprises is keeping their complex tech-related support in-house through onshore locations. However, for simpler queries, alternative nearshore locations such as South Africa and Egypt offer similar advantages that Eastern European locations can provide at lower price points without any dip in the talent pool. Even offshore locations such as India and the Philippines are suitable alternatives to consider as long-term tech support outsourcing locations

Mitigate risks

The last two years have taught enterprises the glaring importance of risk mitigation as a strategic priority to ensure service continuity, and this year seems to be behaving no differently. Customer experience has established itself as a true differentiator for enterprises of all sizes and shapes in every industry. As such, ensuring that customer support services run unhindered is vital for enterprises to achieve their business outcomes.

Now, more than ever, diversification of service delivery locations will become increasingly relevant to counteract the rising instability that the current geopolitical tensions between Russia and Ukraine as well as similar such events could bring in the future.

While we hope that this devastating humanitarian crisis comes to an end as soon as possible, enterprises that closely re-examine their service delivery footprints and proactively mitigate their risks will be better positioned to absorb any shockwaves that could potentially arise in the coming months.

With the continuing escalating events, it is important to stay informed on the latest developments in this region. Contact us at [email protected] or [email protected] to discuss your situation and solutions.

Discover more about the impacts to the service delivery ecosystem in our LinkedIn Live event, How to Manage the Ukraine-Russia Impact on Service Delivery.

You can also keep up on the impact of service delivery from Ukraine and the CEE region in our resource center where you’ll find our consolidated coverage.

Here’s What Russia Legalizing Piracy Could Mean for Tech Companies | In the News

March 21, 2022

Ever since Russia invaded Ukraine, more and more countries and companies have denounced the action and worked to sanction or otherwise punish the conflict’s initiator. Said punishments have led to Russian President Vladimir Putin and his administration announcing increasingly drastic measures and threats.

Yugal Joshi, Partner at Everest Group, weighed in as well. “Russia in general is perceived to be a market where software piracy was more widely spread,” he stated, continuing on to say “the materiality of the impact will be low.”

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