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| GS100: 2011 Global Services Compendium | |||||||||||||||||||||||||
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New Geographies
Besides Asia, Europe is one of the geographies OPDs are looking to expand in. In this context, IT Sourcing Europe, a UK-based nearshore IT outsourcing (ITO) research and consultancy company, has surveyed the 157 Austrian companies in the frames of its Pan-European ITO research 2010 to explore the year’s key trends and challenges of Austrian software development outsourcing.
According to the research findings, the top three challenges of today’s software development outsourcing in Austria are: poor client-vendor communication (16 percent of respondents), delayed project delivery and missed milestones (15 percent of respondents) and cultural difference (14 percent of participants).
In order to respond to the current challenges, most of the Austrian companies take the following actions: 31 percent increase face-to-face communication with their vendor’s project management and project teams, 20 percent dedicate more managerial resources to control the vendor, 17 percent revise and update vendor management processes by opting to switch to a different software development methodology, relocating own project managers to work temporarily on vendor’s site etc, 12 percent of companies extend deadlines, 10 percent claim to bring in outside assistance to improve their vendor relationships, 6 percent consider partnering with a different vendor able to offer engagement via an innovative and more transparent business model and only 4 percent of the Austrian outsourcers terminate their ITO contracts and back-source software development back to house.
The European IT Outsourcing Intelligence Report 2010 by the Nearshore IT Outsourcing Market Research & Consultancy found that while IT outsourcing was considered as the strategy most frequently adopted by large companies in the pre-crisis times, today’s ITO practices find more and more supporters among the mid-sized and small companies, for whom cost efficiency is as important as an opportunity to have access to skills and services that can generally improve their online presence and business performance.
The study also found that to select an outsourcing destination, 23 percent of the Western European companies pay attention to low costs of software development and IT resources, another 23 percent to available IT talent pool, 16 percent to positive references from the fellow companies/local business community, another 16 percent to geographical and cultural proximity, 7 percent to strong research and development (R&D) legacy, 6 percent to political and economic stability, another 6 percent to Intellectual Property (IP) security and 3 percent to proficient English language skills.
Currently, Dutch companies outsource mostly offshore, but there’s a strong tendency for moving outsourced operations closer to the home country. Most of today’s non-outsourcers would consider outsourcing nearshore, if there will be such a need in the future.
| GS100: 2011 Global Services Compendium | |||||||||||||||||||||||||
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View Digital Magazine
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