market trends and competitive analysis

MARKET TRENDS AND COMPETITORS ANALYSIS FOR INNOMINDS SOFTWARE

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MARKET TRENDS AND COMPETITORS ANALYSIS FOR

INNOMINDS SOFTWARE

Nihal Vats

PGDM 0810-50

A project report submitted in partial fulfilment for the award of

Post Graduate Diploma in Management

Institute of Public Enterprise

Osmania University Campus

Hyderabad


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DECLARATION

I hereby declare that this Project Report titled Market Trends and Competitors analysis

for Innominds Software submitted by me to the Institute of Public Enterprise is a bona fide

work undertaken by me and it is not submitted to any other University or Institutions for the

award of any degree/diploma/certificate or published any time before.

Nihal Vats

PGDM 0810-50

Institute of Public Enterprise

Hyderabad.

Signature


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EXECUTIVE SUMMARY

Though India is one of the Favourite IT outsourcing destinations for offshore Outsourcing,

other players are also emerging. The Companies in India which Target providers from US

and Europe may not be able to fetch the projects from these countries in these Difficult

times.

The main aim of the project is to do a study of the Potential Countries from Europe which

are emerging as Outsourcing Destinations. In the project, analysis is done considering the

key Economic factors and Indicators such as GDP and Inflation to arrive at the conclusion.

In this Project some Competitors from each Country are analysed on their strengths as well

as their weaknessess considering Innominds as a benchmark.

This Study has tried to analyse the reasons why Innominds has an edge over these

Companies from each region. It has also tried to evaluate the various countries and rank

them to find the closest competitors of Indian software companies.

Suggestions have been given at the end of the study that will improve the market share

enjoyed by Innominds.


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ACKNOWLEDGEMENT

First and foremost, I would like to thank the Asst. Vice-President-Business Development of

Innomind Software (P) Ltd., Mr. Arpan Banerjee for giving me the opportunity to do my

summer internship in his esteemed organization. He has truly enriched my knowledge on

what competition is in an industry and how to face it.

Ms. Parveen Sultana, of Innomind Software, Hyderabad, has encouraged me in my

academic pursuits to a great extent. She has been a constant source of inspiration and the

interactions I have had with her has enriched my experience at Innominds.

My thanks are due to Mr. S. Satish Kumar, Assistant Professor at Institute of Public

Enterprise for his keen interest in updating my project. He has helped me immensely in

supplying relevant material to me, as and when required.

I am also obliged to the management and staff of Innomind Software for treating me as one

of their employees and providing me all the information as and when needed. I take this

opportunity to thank each and every employee at Innomind Software, Hyderabad.

I express my deep sense of gratitude to my friends Mr.Abhishek Shukla and Mr.Balakrishna

Oguri along with whom this study was conducted.

Finally, I would like to thank all those who have been involved with my project, for

contributing their ideas and suggestions, thereby having helped in making this project a

successful one.


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Table of Content

Introduction………………………………………………………………………………….1

Purpose of Study…………………………………………………………………………………3

Objective………………………………………………………………………………………….3

Significance of Project………………………………………………………………………….3

Sampling………………………………………………………………………………………….3

Data Collection………………………………………………………………………………….5

Methodology……………………………………………………………………………………..5

Limitation of the study………………………………………………………………………….5

Review Of Literature………………………………………………………………………..6

Outsourcing: Global Perspective……………………………………………………………..7

Outsourcing: India…………………………………………………………………………….13

Company Profile…………………………………………………………………….……..17

Innominds Software……………………………………………………………………………18

Europe Region……………………………………………………………………………...23

Ukraine………………………………………………………………………………...26

Risk Assessment…………………………………………………………………………………27

Companies & their profile……………………………………………………………………..31

Romania………………………………………………………………………………..35

Risk Assessment…………………………………………………………………………………36

Companies & their profile…………………………………………………………………….40


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Poland………………………………………………………………………………….44

Risk Assessment…………………………………………………………………………………45


Belarus…………………………………………………………………………………52

Risk Assessment…………………………………………………………………………………53


Baltic States……………………………………………………………………………60

Estonia…………………………………………………………………………………60

Risk Assessment………………………………………………………………………………....61

Latvia…………………………………………………………………………………..63

Risk Assessment…………………………………………………………………………………64

Lithuania……………………………………………………………………………....67

Risk Assessment…………………………………………………………………………………68


Analysis & Findings………………………………………………………………………..76

Competitors for Innominds…………………………………………………………….77

Country Analysis……………………………………………………………………….81

Conclusion………………………………………………………………………………….82

Bibliography………………………………………………………………………………..84

Appendices A


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List of Graphs

Graph - 1 Macro Economic Indicator of Ukraine………………………………………….28

Graph - 2 Macro Economic Indicator of Romania………………………………………...37

Graph - 3 Macro Economic Indicator of Poland…………………………………………..46

Graph - 4 Macro Economic Indicator of Belarus………………………………………….54

Graph - 5 Macro Economic Indicator of Estonia…………………………………………..61

Graph - 6 Macro Economic Indicator of Latvia……………………………………………65

Graph - 7 Macro Economic Indicator of Lithuania………………………………………..68

Graph - 8 FDI Inward and Outward of Countries………………………………………….88


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List of Tables

Table - 1 Snapshot of Ukraine……………………………………………………….26

Table - 2 Snapshot of Romania……………………………………………………...35

Table - 3 Snapshot of Poland………………………………………………………..44

Table - 4 Snapshot of Belarus……………………………………………………….52

Table - 5 Snapshot of Estonia………………………………………………………..60

Table - 6 Snapshot of Latvia…………………………………………………………63

Table - 7 Snapshot of Lituania………………………………………………………67

Table - 8 Competitors of Innominds………………………………………………...77

Table - 9 Country Analysis…………………………………………………………..81


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Chapter 1

INRODUCTION


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INTRODUCTION

Outsourcing is one of the best practices that helps an organization to reduce their effort in

generation of a final product. It makes an organization reduce their functioning cost as well

as completion of a project in a definite interval of time. Outsourcing is rather a difficult

decision to make, as it has a complicated set of requirements that have to be taken into

consideration. Outsourcing has been divided into different type depending on the distance

factor of outsourcing destinations. The main types of outsourcing destination considered are

Onshore, Nearshore and Offshore outsourcing destinations.

Nearshore is the concept in which the distance between the provider and the destination is

about 3-4 flight hours. As the nearshore concept is more prevalent in European union (EU)

because of the presence of many providers as well as outsourcing destinations

Offshore is the concept in which the distance is between the provider and the destination is

more than 4 flight hour. Offshore is a tough decision to be taken by an organization though

being the most popular concept. Companies taking this decision consider many factors into

account such as Quality, Cost, Human resource, Infrastructure, etc. The most popular

destinations for offshore are countries in the Asia Pacific region and some parts of America.

The slowdown has taken its grip and Indian Outsourcing companies are not able to get the

projects from US and as this slowdown has affected the whole world, the best thing that

companies can do to reduce their Cost is to outsource. India with its advantage of low cost

and highly skilled professionals is best place to incash on this opportunity. This study will

assist such an endeavor by leveraging on its strengths.


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PURPOSE OF THE PROJECT

The purpose of the project is to give relevant information on the emerging preferred

outsourcing destination and also about the existing competitors of India in IT outsourcing.

The project is also aimed at finding and evaluating the competitors of Innominds Software

in these Outsourcing Destination countries.

OBJECTIVE

• To find out five outsourcing destination in Europe that fetch most of the nearshore

projects and identify the competitors of India in IT outsourcing. The destinations are

rated accordingly using SWOT analysis.

• To identify the competitors of Innominds software from each of the selected

countries and evaluate them according to some criteria, e.g. HR, successful

completed projects, certification, etc.

SIGNIFICANCE OF THE PROJECT

Recession has adversely affected the outsourcing industry. Adding to the woes is the

recently introduced US act of discouraging companies from outsourcing their projects to

offshore destinations. This has made the outsourcing companies to look out for new

providers. and the destination that they get concentrated is Europe rather to get an edge over

them so that they can prove themselves as better outsourcing destination compared to

nearshore outsourcing destinations they need the SWOT of the countries and some points

over their competitors.

SAMPLING

In order to carry out a reliable analysis, competitors and relevant outsourcing destination

from the five countries of Europe was chosen, namely Ukraine, Belarus, Baltic states

(Estonia, Latvia, Lithuania), Romania and Poland.

For all the countries chosen relevant players were selected on the basis of their size and

specialization relevant to innominds software. The countries with their major players are as

follows:


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Ukraine: Capital Kiev

• Mirasoft

• Outsourcing Ukraine

Romania: Capital Bucharest

• 4e Software

• XII Software

• IP Devel

Poland: Capital Warsaw

• PGS Software

• BigosIT

• Hyper Square

Belarus: Capital Minsk

• Belsoft-Borlas Group

• Belhard group

• Qulix System

• Science Soft

Baltic States

Estonia: Capital Tallinn

Latvia: Capital Riga

Lithuania: Capital Vilnius

• Media Works

• Euri Techa

• Alna

• Elsis


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DATA COLLECTION

All the data used in this study were secondary data which were mainly collected from

websites of ITONEWS (www.itonews.eu), Euroitx (www.euroitx.com) and Gartner

(www.gartner.com). Data were also collected from the statistics given out by world factbook

2009. The companies data were collected from their respective sites.

. METHODOLOGY

Eight countries including India and three of Baltic States are compared on the basis of their

infrastructure, GDP, risk, cost and market opportunity. Rating is given to the countries

according to their preference of being considered as an outsourcing destination and their

competencies.

Apart from secondary data, some related reports and the current scenario of the outsourcing

industry has also been considered to facilitate a better study and comparison.

The research is a descriptive and qualitative one, data being collected from different

websites and reports.

The rating for each country is given on the lickert scale of 8 (1-8) according to the capacity

of the country. SWOT Analysis has been carried out on each country

The rating consists of following as the main component:

• GDP: GDP has been considered taking base year as 2008 for each country

• FDI (INWARD): FDI is one of the major contributor which shows the infrastructure

growth in the country. For all the eight countries, the base year of FDI has been

taken at 2008

• Human Capital: Human capital is taken into consideration for the finding out the

availability of the human resource and to compare the strength of particular field.

• Volume of IT Market: This is considered as comparison what is the current Market.


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• Rates: Rates are taken as an average of whole year sgowing that what is the lowest

rate in USD to complete the project . this is considered for the cost effectiveness.

• Inflation: Inflation is the one of the main reasons for the instability in the economy a

• Telephone Lines: Telephone lines are taken into point ranking as this shows the

effectiveness of the communication in the country

• Airports: This is taken into consideration as it shows the connectivity of the country

with the world

For the companies competitive analysis we have taken some criteria as keeping Innominds

Software as the benchmark and comparing the important aspects where other companies

lead and where they lag . The main point That are taken in to consideration for comparing

Companies are as follows:

• Quality Partnership

• Certificates

• No. of Years in Function

• No. of Projects

• No. of Employees

LIMITATION OF THE STUDY

As the project is completely based on secondary data, while comparing the countries and

companies, the real scenario may be skipped. As in every country there are many

companies, identifying the right competitors has been a daunting task.


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Chapter 2

REVIEW OF LITERATURE


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OUTSOURCING: GLOBAL PERSPECTIVE

Considering outsourcing in a global prospective we always feel, “what is the harm in

outsourcing? After all, jobs lost in one country are gained in another." There are many

answers to this question but basically, “Outsourcing replaces higher paying jobs in one

country with lower paying job in another country.” It is true almost by definition. After all,

the stated purpose of outsourcing is to reduce labor cost.

After considering different Repots and Journals I found that India is the most competitive

and popular IT-outsourcing destination in the world and tops the ranking of different Global

Outsourcing Reports, released by different Ventures. The reports examines the risk and costs

profile of the world’s leading outsourcing destinations by proposing two different indexes—

the Global Outsourcing Index (GOI), which describes the current competitiveness of doing

outsourcing work in the top 20 countries, and the Future Outsourcing Index (FOI), which

assesses the long-term (10 years) competitiveness of the top 30 future outsourcing

destinations. China takes the lead in the Future Outsourcing Index, followed by India, U.S.,

Brazil and Russia. In the future, the authors believe that China will most likely become the

largest and most competitive outsourcing destination, assuming China makes significant

progress in geopolitical and legal arenas.

The detailed ranking is as follows: -

Global Outsourcing Index

1. India

2. China

3. Malaysia

4. Philippines

5. Hungry

6. Czech Republic

7. Russia

Future Outsourcing Index


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1. China

2. India

3. USA

4. Brazil

5. Russia

6. Ukraine

7. Romania

Competitiveness has been measured along seven dimensions: geopolitical risk, legal risk,

cultural risk, economic risk, IT infrastructure risk, human capital risk and IT competency

risk. An added dimension is the cost of outsourcing in the respective countries.

REGIONAL ANALYSIS

Eastern European Countries (Czech Republic, Ukraine, Latvia, Hungary, Armenia and

Poland)

The former Soviet bloc influence tends to move faster to Western habits/culture and

economy. The people of these countries found the way to their economic independence by

fully integrating a European/American system. They have huge technical potential because

of their level of Western world comprehension and their educational system. Their potential

for innovation is definitively here. These people are hard and smart workers. Even Russia

will make a slower move to the Western system to keep a role in the world economy and

compete for integration and try to be as attractive as India or China.

A problem for these countries would be the price of technologies, which is still very

expensive compared with the buying power in place and a small language barrier that can be

broken easily. In ten years, these countries will be absolutely ideal for high-core competency

outsourcing and outstanding software innovation. The stimulation is definitively here.


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Asian Countries (Malaysia, Philippines, Singapore, India and China)

India and China will definitively run the show in the next decade. Companies would be wise

to choose their outsourcing strategy. It would be a trade-off between cost-effective way to

run their business and strategic control over sensitive technologies/price control over time.

Political instability and IP protection can be great concerns, but at the same time there is a

great opportunity to open wide, new market and export product by increasing the buying

capacity of these countries. After being colonized/revolutionized, these countries have the

capacity to emerge and are showing economic strength.

American Countries (Brazil, Mexico, Canada, Chile)

These nations still have educational and infrastructure problems. They can be attractive for

specific types of jobs, but there are language limitations and an unmotivated workforce.

Some countries are developing tourism as greater source of their revenue.

Western European Countries (Ireland, Scotland, France)

These countries are tend to be marginal players in the offshore outsourcing arena. Despite

their high level of education and cultural integration that brings talented people to the table,

the cost of labor and a labor ruling system that is anti-economical development limit

outsourcing here. In fact, these talented populations tend to move away from their own

countries (France has 10% of its population living in Canada and the United States). They

are also starting outsourcing processes for the same reasons that make them unattractive.

Middle East

We would note the complete absence of Middle Eastern countries, except Egypt and Israel.

World disparities on that level are creating major clashes of cultures.


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OUTSOURCING TREND IN CURRENT SCENARIO

• Globalization will continue but at a slower pace

Numerous factors, including the severe global economic downturn, repeated product

health/safety scares related to Chinese goods, a collapse of commodity prices and the

election of a new U.S. administration concerned with the loss of domestic jobs will

slow globalization and one of its key manifestations, the global sourcing of services.

But the compelling business benefits of global sourcing, especially in tough

economic times, will continue to drive growth.

• Reassessment of current global outsourcing strategies/destinations

As buyer focus shifts to cost reduction and cost avoidance, organisations will

carefully analyse current and future outsourcing efforts and service provider partners

to ensure they are getting services from the most cost-effective location.

• Steep learning curves

As buyers turn to outsourcing/offshoring to help weather economic turbulence, they

will need to consider mitigating factors, including service provider capacity levels,

prior direct experience and whether engaging a service provider expands or

consolidates the supplier base, supplier consolidation/rationalization is viewed as a

means to gain economies of scale, reduce overall costs and speed implementation of

new efforts to meet shorter term business needs.

• Volatility in foreign exchange markets

Outsourcing buyers and sellers must become more effective at hedging against

currency fluctuations that often negatively impact local currencies in emerging

markets, creating instability in cost profit margins. The seesawing value of the dollar

will make calculating the true costs of outsourcing/offshoring more complicated,

challenging buyers and service providers to project longer-term pricing, cost and

profitability levels. Efforts to do this should include explicit contractual


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contingencies and, when possible, spreading global service delivery efforts across

multiple markets.

• Wage inflation in offshoring markets will abate, at least temporarily

As Western markets pause to digest events and determine a go-forward strategy,

demand for global outsourcing services will slow temporarily, curbing the recent

trend toward wage inflation in offshoring markets and helping top outsourcing

destinations remain competitive.

• Evolving outsourcing business model

Buyers will continue to shift away from the use of project-based contract labor in

favors of longer term, formalized outsourcing relationships. By committing to

longer term and larger scale deals, buyers can get better pricing from service

providers, better levels of service and lock-in longer term cost savings strategies.

• New Outsourcing Industries

Global economic downturn will lead to increased outsourcing in Healthcare,

Education, Retail, Telecom and Legal Process Outsourcing (LPO) sectors.


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OUTSOURCING: INDIA

The world is discovering the fact that India is a super power when it comes to developing IT

solutions. India stands far away From all the Outsourcing Destination in ranking Given by

any research or Journal. Giving a glance at why India is such a great destination for IT

outsourcing.

India's human resources

Being the world's second highly populated country, human resources are a boon by itself.

Just as the Gulf is renowned for its natural resource of crude oil, and South Africa for its

diamonds, India is proud of the abundance and easy availability of its highly qualified and

technically skilled English speaking computer professionals; who are key to success in the

field of IT outsourcing to India.

Cost efficiency of IT outsourcing in India

Significant cost saving can be achieved by IT outsourcing to India, owing to the wide gap

between the personal costs in India and that of the developed countries. Offshore

outsourcing to India offers considerable economical benefits for those who are prepared to

exploit the advantages of outsourcing.

Standard quality that firms doing IT outsourcing in India guarantee

The Indian companies involved in IT outsourcing in India provide high quality work,

meeting international standards and complying with the ISO & SEI-CMM standards. Three

out of every four SEI-CMM 5 companies worldwide is located in India. Thus India promises

quality - IT outsourcing in India as it has the potential to furnish these services perfectly.

The reliable communication facilities

Excellent telecom, ISP, and cellular networks are available in all cities & towns in the

country. India prides in the reliable satellite and submarine communication links that

facilitate good band connectivity with the rest of the world. Thus companies engaged in IT


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outsourcing to India, can be in touch with the vendors without any connection hurdles. This

plays a significant role in determining the success of offshore IT outsourcing to India.

Technologically advanced outsourcing firms in India

India's technologies offer excellent software solutions. The applications include E-

commerce, Business Process re-engineering, System Migration, Maintaining Legacy system,

System integration etc. India prides in outsourcing facilities that are required to compete

with others; which is yet another reason as to why the world prefers It outsourcing to India.

Galloping growth in Indian economy

The service sector in India contributes 51% of the GDP. Computer software export was

prominent with a growth rate of 40%-50% per year during the 90s. India being the second

largest software exporter in the world its large business houses and public sector units are

growing steadfastly towards raising economic growth..

Stable government facilitating IT growth

India has a stable pro - IT government whose policies, economy, GDP growth, taxation,

power, telecom, industrial parks & special zones have been helpful in improving the

infrastructure as well as communication. The government proves to be a great support for

software firms by further providing all the basic facilities required for an outsourcing

company to flourish thus playing a major role in contributing to the success and well-being

of IT outsourcing to India.

Indian government policies

• IT is regarded as one of the top 5 priority industries in India. IT is a part of the

national agenda, and policies are framed so as to obtain maximum benefit out of IT

outsourcing to India.

• The liberalization and deregulation initiatives taken by the government are aimed at

supporting growth & integration with the global economy. These reforms have


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enabled the entry of foreign companies to the Indian market. FDI investment from

NRI's including Overseas Corporate Bodies (OCB's); owned by the NRI's are

warmly welcomed in India.

• The new National Telecom Policy has invited private participants to the Indian

telecom sector.

• The IT bill passed in 2000, gives a legal framework for the recognition of electronic

contracts, prevention of computer crime and electronic filing of documents.

NASSCOM along with the government is playing a notable role in protecting the

interests of the IT sector. Thus with all these help, IT outsourcing to India has

reached a point of no turning back.

The Quality Accreditation offered to firms engaged in IT Outsourcing to India .

Yet another prominent reason behind Indias glittering success in the global IT market is the

maintenance of quality. In the recent years, India has been able to offer IT software products

and services, which match global standards of quality.

As on 31 March 2002, 42 IT outsourcing companies in India achieved SEI-CMM Level 5

assessments. 316 Indian outsourcing companies have achieved quality certifications. More

and more IT outsourcing firms are striving for it. Moreover, the Indian software industry has

accepted and adopted newly emerging People - Capability Maturity Model (People-CMM).

As per 27 June 2002 statistics, India has 85 companies at SEI-CMM Levels assessment for

this. These statistics indicate the fact that almost all the companies in the Indian IT sector

have realized the value of quality and its accepted standards and that they are vigilant

towards achieving it. It will be interesting to take a look at the Global Accreditation, which

the Indian IT players have won.

1. ISO 9000

• The International Organisation for Standards (ISO 9000 series).

• International set of documents on quality assurance. Written by members of a

worldwide delegation, ISO/Technical Committee 176.


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• 3 core quality systems documents

• Models of quality assurance.

2. SEI-CMM Model

• SEI (Software Engineering Institute) established in 1984 at Pitts berg, USA.

• The CMM (Capability Maturity Model) of SEI is a framework that describes the key

elements of an effective software outsourcing process.

• CMM - composed of 5 maturity levels.

• Each level facilitates a layer in the foundation for continuous process improvement.

• Achieving each level of the model institutionalizes a different component in the

software process, resulting in an overall increase in the process capability of the

organization.

3. People Capability Maturity Model (People-CMM)

• Process targeted at managing and developing an organization's workforce and adopts

the maturity framework of the CMM.

• Aim - to radically improve the ability of software organizations to attract, develop,

motivate, organize and retain the talent needed to continuously improve software

development capability.

• Contains 5 maturity levels.

• Lay foundations for continuously improving talent, effective teams, and successfully

managing the people assets of the organizations.

4. CMM Model

• Aim - to guide organizations in improving ability and processes in development,

acquisition and maintenance of products and services.

• Places proven practices into a structure, which aids to measure the firms maturity

and process area capabilities.

• Establishes priorities for advancement and guides the implementation of these

environments.


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Chapter 3

COMPANY PROFILE


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COMPANY PROFILE: INNOMINDS SOFTWARE

Founded in 1998, Innominds Software is a specialized Software Product Engineering

Services provider based out of San Jose, CA with offshore development centers in

Hyderabad. Innominds Software is a leading Outsourced Software Product Engineering

Services company which provides dedicated engineering teams at global delivery centers. It

has more than 250 employees dedicated towards their responsibilities. It is ISO 9001: 2000

Certified and is working towards ISO 27001 certification CMMi Level 5 assessments in

2007.

Innomind provides comprehensive product engineering lifecycle services for software

product companies – from product conceptualization, specifications, architecture, and design

to the entire product development, testing, implementation, maintenance and support.

Continuously improving processes and methodology ensure the success of any project by

reducing time to market and providing predictable time, cost, and resources.

As Software entrepreneurs work towards identifying market needs and generate ideas to

develop a new product. Innominds has engineers capable of understanding these ideas and

translating them into world class products. In order to stay ahead of intense competition,

Innominds continuously endeavor to exceed customer expectations with consistent

innovations in technologies, methodologies and processes. Thus, as a part of the corporate

culture, Innominds is highly customer centric and believes in delivering the best quality

products every time.

Innomind define their core values by 3 I’s, these are-

INTEGRITY-INQUIRY-INNOVATION

SERVICES OFFERING

At Innomind complete spectrum of services covers every stage of software product

engineering from creation to support:


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• Translating product vision or Market Requirements to product definition and

requirements

• Design and develop products using industry-standard design tools and

documentation templates

The proven, reference able service offerings include:

1. Product engineering life-cycle services

a. Software product engineering

b. Quality engineering

c. Porting and migration services

d. UI Engineering

2. IT Services

a. ERP

b. CRM

c. Application Development

d. Mobile and wireless

e. Re-engineering

3. Design and e-learning

a. UI Design

b. Information Design

c. Visual Design

d. E-Learning

DESCRIPTION ABOUT SERVICES

Product engineering lifecycle services: - Innominds focuses on delivering services across

every stage of outsourced software product development lifecycle - from research and

prototyping to support and maintenance.


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A) Software product engineering: - The purpose of Software Product Engineering is to

consistently perform a well-defined engineering process that integrates all the

software engineering activities to produce correct, consistent software products

effectively and efficiently.

Software Product Engineering involves performing the engineering tasks to build

and maintain the software using the project's defined software process and

appropriate methods and tools.

The software engineering tasks include analysing the system requirements allocated

to software, developing the software requirements, developing the software

architecture, designing the software, implementing the software in the code,

integrating the software components, and testing the software to verify that it

satisfies the specified requirements.

B) Quality engineering: - Building a quality software product requires testing

throughout the product's life-cycle. Innominds offers a tailored software-testing

package as an integral part of product development that plays a vital role in

delivering quality products within deadlines in a scalable and integrated

environment.

Innominds provides Independent Verification and Validation (IVV) services globally

to pharmaceutical and biotechnology industries.

C) Porting and Migration services: - All organizations reach a critical juncture in their

application development process where they decide to move their legacy applications

away from out-dated technologies. Migration and porting is a viable option. This

solution requires the right strategy, combined with in-depth knowledge of the latest

software technologies and the environments involved.


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As the expert in GUI and application development, Innomind work with their clients

to review existing code and complete a comprehensive assessment to determine the

impact of the migration project. Innomind provides a cost/benefit analysis that

highlights any trouble spots, estimates the actual time required to complete the

migration, documents the potential long term savings, and completes the conversion.

D) UI Engineering: -User interface engineering is the design of computers, machines,

mobile communication devices, software applications, and websites with the focus

on the user's experience and interaction. The goal of user interface design is to make

the user's interaction as simple and efficient as possible, in terms of accomplishing

user goals.

Innominds UI Engineering services combine diverse engineering capabilities with a

conscious user-centered design approach. The primary objective of Innomind

engineers is to apply appropriate technology to create software which is useful at

every level of solution.

IT Services: - Implementation of enterprise applications has become increasingly complex

with the advent of service oriented architectures and web services. This requires both

breadth and depth knowledge of operating environment and security.

With Innominds custom integration services, companies can achieve robust, efficient

integration without the overhead, complexity and cost associated with staffing for specific

technical expertise. Using its technical expertise, integration methodology, and business

integration framework, Innominds can rapidly design, develop and deploy solutions that

work between disparate systems.

Design and e-learning: - Innomind comprises an extensive design team with members of

various specializations. It combines the creative powers of information architects, visral and


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information designers, writers and illustrators, with the technical proficiency of experienced

technologist. Together they are equipped to create, deploy and manage the range of content

rich information systems.

Areas addressed by Innominds design and learning products and services are:

• The architecture and design of software and system that deploy content.

• The design and production of content for new and traditional media.

E-learning systems are a major thrust area of Innominds design team. The team has forged a

niche for itself with the design and development of first-of-kind E-learning product Online

School of Photography, in collaboration with world leading creative professionals.


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Chapter 4

EUROPE REGION


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EUROPE REGION

Europe is, by convention, one of the world's seven continents. Europe is the world's second-

smallest continent by surface area Europe has enormous potential for development of IT

Outsourcing industry. This Region will definitely keep the appreciation of the customers

from all over the world. It will attract new clients by professionalism of the experts, Low

labor cost, friendly legislation as well as by geographical vicinity and cultural Connection to

the Western Europe. Europe as a continent consisting of 45 countries in total and divided in

sub regions.

Originally the main destination was to ‘offshore’ in India and the country still leads as an

outsourcing destination because it ticks the proverbial boxes of language skills, technical

now-how, a mature legal system, cheap labour and stable political system. Similarly the

Philippines, which had close military ties to America and hence good language skills, has

proven a popular destination. However, since the initial boom in Indian outsourcing in the

early 1990s, the EU has expanded to incorporate several countries which can tick as many, if

not more, boxes as India and the Philippines but have the advantage of being much closer to

home and ruled by common EU laws and best practice. These East European countries, such

as Poland, Hungary and the Czech Republic, are proving an increasingly popular destination

thanks to high language skills and, particularly for IT excellent universities.

The EU offshore / near shore outsourcing market

Growth of the European spending on off shoring is expected in the next few years. Opinions

on the intensity of this growth differ. One source expects a 50% year-on year rise in

spending in 2007-2008. Another source forecasts that European spending will achieve an

average growth of 6% over 5 years and European companies will spend a total of €146

billion in 2011. IT jobs will move offshore most rapidly from the UK with continental

countries matching that trend at a lower level of impact. Up until now it is mainly the larger

companies that have started to offshore and nearshore their software and IT services.

Although still developing slowly, there is a trend in the Northern European countries (such


33

as Sweden, the Netherlands, Denmark and Germany) and the UK towards a greater

involvement of SMEs in outsourcing software and IT services. Off shoring / near shoring

software and IT services will be the next step for these SMEs. In other countries such as

Belgium France, Spain and Italy, SMEs are not ready for off shoring / near shoring yet.

According to experts, the SMEs in these countries are only just discovering onshore

outsourcing. Driving factors for offshoring are still cost cutting, access to skilled labour and

improving quality. The main barriers are cultural and language differences and a lack of

trust. The best potential for offshoring / nearshoring lies in software applications and

software systems. For professional IT services, the best chances for offshoring / nearshoring

lie in implementation and operations management services. Support services have the lowest

chance in offshoring / nearshoring.

Offshoring / nearshoring trends

• Nearshoring is one of the most important trends in the EU, due to cultural and

geographical advantages and a greater sense of control for EU companies.

• Security and Intellectual Property Protection are becoming increasingly important.

• Multi-sourcing will emerge. It is characterised by making use of several suppliers

and supply markets to spread risks.

• Growth, efficiency and the availability of a skilled labour force will become more

important next to cost savings.

• A significant investment in project management offices is expected because of

multi-vendor, multi-model and multi-country contracting that is coming up.

• India will strengthen its position by offering more extensive choices.

• Many mergers and acquisitions in the EU software and IT services market.


34

UKRAINE

Ukraine

Map of Ukraine

Capital – Kiev

Population – 46,490,400

GDP (PPP*) – $364.3 billion

Per capita – $7,832

Time Zone – EET (UTC+2)

Summer (DST) – EEST (UTC+2)

IT industry sector in Ukraine has grown considerably during the recent years. Because this

country is the closest to Europe out of those which have not yet joined the EU and which has

a visa-free entry regime, Ukraine is very attractive to the Western European countries. A

large number of small companies provide a whole variety of outsourcing opportunities for

the medium and small businesses. Low rates and a huge pool of highly skilled professionals

are other advantages of outsourcing to Ukraine. Ukraine is a very convenient place, a so

called sluice for collaboration with Russian and Belarusian companies.

Volume of IT outsourcing market (USD

Mlns)

544

Number of IT outsourcing companies 800

Number of employees involved in IT

outsourcing

14,000


35

Rates per year** (USD) min Max

25,920 49,600

Largest IT outsourcing companies: Luxoft, Softserve, Miratech, Infopulse,

Ciklum, Softline, Validio, Aricent, Lohika

IT Associations: Ukrainian Hi-Tech Initiative

www.hi-tech.org.ua

IT Ukraine

www.itukraine.org.ua

TABLE - 1

RISK DIMENSIONS: UKRAINE

Political Risk

Recent elections have shown that the country is still very unstable. The new government

gives hope that the country might at last attain true freedom and prosperity. Ukraine is a

young state, possessing both the material resources and the political will to enter into the

world market as a valuable emerging partner.

Legal Risk

Mafia still dictates daily life; no rule of law; piracy, specifically identified USTR foreign IP

protection; sanctions imposed; hidden costs of outsourcing. Expert

Cultural Risk

English skills still not very advanced; affinity toward the U.S. and the EU; Ukraine is the

largest neighbor of the EU


36

Economic Risk:

GDP—purchasing power parity: $364.3 billion

GRAPH-1

Ukraine has the highest economic growth in Europe Up to year 2004. It has largest economy

market and credit rating is Growing; country is hungry to catch up with its neighbors.

Ukraine depends on imports of energy, especially natural gas, to meet some 85% of its

annual energy requirements. Growth has been undergirded by strong domestic demand, low

inflation, and solid consumer and investor confidence. Growth was a sturdy 8.2% in 2003.

The middle class plays an important role in the economic and social life. A sufficiently large

middle class (certain estimates claim more than 30%) is laying the foundations of social

stability and economic development in any country. This middle- class group is reported to

include middle and lower-ranked management, skilled workers, craftspeople and people

who run their own business. Lack of investments in the IT sector. As the Graph indicates the

increase of inflation in the country at the same time decrease in the GDP of the country

indicates clearly the effect of the recession over the economic slowdown of the country. As

the Forecast of 2009 the GDP will Go in the negative of-6% and at the same time Inflation

will reach at 29.7% clearly indicates the unstability and recession effect over Ukraine

economy.


37

IT Infrastructure Risk:

Telephones: 13 million

Internet users: 900,000

Cellular User: 56 million

Good IT infrastructure; however a lot of country wide infrastructure under development;

country improving telco trunks and mobile connections. A lack of investments hinders

development of IT infrastructure.

Ukraine has taken important steps in recent years to improve basic telecommunications

infrastructure and to introduce modern operating standards. The best IT infrastructure is in

largest cities, where large universities and IT resources are concentrated. The Government

has Launched “Innovations Springboard.” Leveraging information and communications

technologies for Ukraine’s future. It is aimed at strengthening the process of balanced

national development and alleviating poverty though the appropriate and innovative use of

Information and communications technologies. There are numerous scientific and

technological institutes, universities and R&D companies.

IT Competency Risk:

No project management; many top programmers specialized in various areas Custom Code

Writing (body shopping): Average BPO: Poor System Writing Project R&D: Excellent High

technological level of development. The country is producing complex systems such as

carrier rockets, satellites and space research equipment. Ukraine is a considerable producer

of military equipment, including tanks, military transport aircrafts, SAM complexes and

optical equipment.

Human Capital Risk:

Labor force: 21.29 million


38

Good pool of IT-workers (legacy of the Soviet Union), with strong knowledge of

mathematics and natural science; good education system (especially hard sciences); good

technical universities. The country provided many top computer programmers to the former

Soviet Union’s space and military efforts, and much of that expertise has spilled over to the

country’s private sector. Ukraine has approximately 1% of the world’s population, but 6% of

the world’s physicists, chemists, mathematicians, biologists, computer programmers and

other highly trained professionals. Technical schools provide specialized education in many

fields and higher education is gained at numerous universities, granting bachelor’s, master’s

and doctorate degrees.

Ukraine is considered a country with one of the highest levels of education in Eastern

Europe.

Costs

Costs are low now, but they won’t stay that way (especially when Ukraine starts

negotiations to become a member of the EU). Rates charged for programming in Ukraine are

more expensive those in India, but they are 25% cheaper than in Russia.

MARKET OPPORTUNITY

MARKET:

2005: 20%

2006: 2%

2007: 23%

Compounded growth 2005–2009: 21%

(source: Forrester Research)

—Population growth; 0.66%

The Ukrainian IT market has demonstrated a steady 30%- 40% annual growth for the past

three years.


39

Overall Assessment:

Ukraine’s big resource pool of qualified IT specialists and the low cost of labor make it a

competitive location for offshore programming firms. Currently, popularity is low, but

growing. The country is making a lot of progress to establish its position as a competitive

location in Europe; costs will remain low compared with other countries.

Future

Good future. The new government is fighting favoritism and corruption and willing to

transform the country into a rulebased economy; Ukraine has the potential to unleash even

more capacity to become a vibrant player in the global economy due to a large, highly

educated labor force. The challenge is political and economic risks.

COMPANIES AND PROFILE: UKRAINE

Mirasoft --- www.mirasoft.com.ua

Mirasoft Ltd (former branch of Swiss company Miratech AG) has been in

business since 1992 when it was founded by a group of scientists of the

Institute for Cybernetics (leading research institute of the National Academy

of Sciences) in Kiev, Ukraine. The significant participation in developing the

miracle xrp project started in 1994, which enabled Mirasoft to accumulate

know-how in the field of complex business information systems. More than

18 years of Mirasoft's success lays in the two main benefits they bring to their

customers - the significant cost reduction and the high technological

innovative solutions they provide.

Mirasoft is a professional offshore software development center - the

dynamically growing company with advanced infrastructure, creative team


40

and successful experience in software development. Their competence groups

are able to handle software development projects of various scope and scale.

Mirasoft software development facilities are located in Kiev, the capital of

the Ukraine. Creating innovative business solutions we apply new

technologies and recent trends in IT-development. At the same time Mirasoft

activity is founded on long-term traditions, best practices and the powerful

scientific base of the Ukrainian scientific-research centers.

Stability in IT outsourcing

• one of the oldest IT outsourcing company in Central & Eastern Europe

• experience in offshore software development since 1989

• certified member of the Offshore Outsourcing Best Practice Association (OOBP)

Nearshore location

• Kiev, the capital of Ukraine (Eastern Europe)

• 2-3 hours flight from major European capitals

• no visa for citizens of USA and EU

Professional IT personnel: 140+ employees

Interaction with customer: responsive and transparent

Complete cycle of offshore software development and IT outsourcing services

Strong background: more than 200 successfully completed software projects

Software development rates: truly attractive

Quality Management System

• ISO 9001:2000 certification

• SEI CMMI Level 3 in the near future


41

Wide range of development skills: 300+ technologies & tools (C++, C#, ASP.NET, Java,

J2EE, PHP, MS SharePoint, Lotus NotesDomino, Crystal Reports, dot Net programming,

etc.)

Expert in IT technologies

• Microsoft Gold Certified Partner

• Member of SUN Advantage Program

• Member of Symbol Partner Select Program

Industry experience: Manufacturing, Telecommunications, Retail/Wholesale, Government,

Entertainment, Healthcare, Tourism, Information Technology, …

Outsourcing–Ukraine --- www.outsourcing-ukraine.com

OUTSOURCING UKRAINE

Outsourcing Ukraine is an IT Consulting and Development Company located

in Sevastopol, in southern Ukraine. Established in 2002, They have already

provided cost-effective and reliable IT Solutions to a wide range of clients

from the United States and the European Union.

Stability in IT outsourcing :

• Experience in offshore software development since 2002

Nearshore location:

• Sevastopol, in southern Ukraine

Professional IT personnel: NA

Strong background: More than 100 successfully completed software projects

Software development rates: 100 to 5,000 hours of work each


42

Quality Management System :

• Global Star Certification at Viability Level S (3) appraised by The International

Institute for Outsource Management (IIOM).

Wide range of development skills: Microsoft .NET, Microsoft SQL Server, XML Web

Services, Windows Server, ASP.NET Ajax, SilverLight

Expert in IT technologies: No such certification

Industry experience: Healthcare, Insurance, eCommerce, eLearning, Manufacturing,

B2B/B2C Solutions


43

ROMANIA

Romania

Map of Romania

Capital – Bucharest






Romania indeed attracts whole Europe, especially Italy and France. This country has the

largest number of IT professionals per capita in Europe. Good mastery of Germanic

languages. This is the perfect location for the multi-lingual call centers with the particular

specialty in Italian and French. All the working in IT sector in Romania should not pay

income tax that is 16%, flat.


Mlns)

416



outsourcing

12,500

Rates per year** (USD) Min Max

30,020 62,320


44

Largest IT outsourcing companies: SAP, Endava, Romsoft, Totalsoft, Ubisoft,

Epicor, Ingenio Software

IT Associations: ANIS - Employers’ Association of the

Software and Services Industry

www.anis.ro

Information Technology & Communication

Association of Romania (ATIC)

www.atic.org.ro

Ministry of Communications and

Information Technology

www.mcti.ro

TABLE - 2

RISK DIMENSIONS: ROMANIA

Political Risk

Rampant corruption; Hungary amended status law extending special social and cultural

benefits to ethnic Hungarians in Romania, who had objected to the law. Romania has good

relations with the former Soviet Union states (from the point of view of political doctrine

and economic relations) and the Middle East (it has always had very good links to the

countries from that region). Romania is in the privileged position in which it can serve as a

bridge between the nations and companies from this area.

Legal Risk

Red tape hinders foreign investment; ongoing piracy issues; lack of IPR protection; lack of

enforcement, but piracy rate has decreased more than 20% in the past few years. The

government is committed to attracting and retaining IT talent by exempting IT professionals


45

from income tax payment. There’s a lack of legislation, but the important laws are already

being prepared for approval, including copyright, electronic signature, electronic commerce

laws and a ruling concerning personal character data processing.

Cultural Risk

Attractive for European outsourcing; same time zone for EU; very little time overlap;

understand Western European culture. The business culture and Romanian attitude is

European and a very high percentage of the workforce speaks English, French, German or

Italian.

Economic Risk


GDP growth: 4.9%

GRAPH-2

Romania has successfully concluded an IMF agreement; has to achieve a lot to enter the EU.

An effective public-private partnership in the IT sector will ensure a competitive and


46

consistent rules-based business environment; inflows of foreign direct investment (FDI).

Romania’s future integration in the European Union, most likely in 2007, offers investors an

established presence in the Common Market.As in the Graph is is clearly mentioned how the

growth of Poland in the coming years have been taken a sharp steep in 2008 growth is 7.1

and as per the forecasted it goes to -2.8 whereas in the next forecasted year it is said to take a

positive turn.

IT Infrastructure Risk

Telephones: 4.3 million

Internet users: 4 million

Cellular User: 22.8 million

Poor domestic telco infrastructure, but improving; ranks sixth in the world in the number of

certified IT professionals. The government’s IT "Vision for Romania" is summed up in the

following mission statement "Romania should aspire to become the ‘Internet hub’ for the

Black Sea region. The Romanian have implemented almost all the international standards of

mobile telecommunications, and the country has registered one of the largest growths of

mobile communication in Europe during the last five years.

The extension of the e-Procurement system to a national level has become a key component

in the process of modernization of the government in Romania. With electronic

procurement, the Romanian government can lower the cost and encourage the private sector

to move to B2B. It also creates the premise for lowering corruption, reducing bureaucracy

and ensuring transparency. Companies investing in R&D centers in Romania include IBM,

Oracle, Siemens, Alvarion and Alcatel.

IT Competency Risk

Highly skilled workforce, focus on specialized software; excellent R&D and creative skills

Custom Code Writing (body shopping): Very good BPO: Poor System Writing Project

R&D: Excellent


47

The Romanian IT industry will become a leading regional supplier of Internet-based

services, specialized software and contract manufacturing by 2010 by leveraging national

competitive advantages; Romania has a history of scientific achievement and technical

expertise.

Human Capital Risk


It has an abundance of well-educatedand highly skilled worker; 20,000 IT certifications;

surpasses almost all Europe in its IT resource pool creation.

Cost

Wages are low. It will take seven to eight years for wages in Romania to catch up with the

rest of the EU; IT costs are $2,360; very top MCSE annual cost is $12,000.

Market Opportunity

MARKET:

Annual rate of growth of the Romanian IT companies exceeded on average 25% for the last

few years, and that of export 60%; IT spending is the lowest in the region. —Population

growth: 0.11%

Overall Assessment

Romania has an abundance of welleducated and highly skilled workers deleted Being

located in the heart of Europe, Romania is the best choice when targeting both the massive

EU market and the emerging CIS region with its unsurpassed labor costs and IT expertise.


48

Highly-skilled, relatively cheap labor. A very high percentage of the work force speak

English, French, German or Italian Major players: More than 5,000 software-producing

companies are located in Romania, mainly at the great university centers in Brasov,

Bucharest, Cluj, Iasi and Timisoara

Future

Romania will be a promising player in the Future with quality and abundant IT resources in

Central Europe. Costs might rise a bit in the future, but on the whole, remain competitive.

COMPANIES AND PROFILE: ROMANIA

4esoftware – www.4esoft.ro

4E Software Romania Ltd. is a software research and development house and

IT consultancy partner registered as a brand in December 2000 that brings

together a group of high level IT experts. They are a dynamic group of highly

trained professionals who are particularly experienced in international

multilingual working environment.

Company provides the highest quality services through development of

powerful, innovative and viable solutions to meet their customer needs both

in terms of product specifications and project development time.




49

Nearshore location:

• Bucharest, the capital city, industrial and financial centre of Romania.

Professional IT personnel: 100+ employee

Strong background: More than 200 Projects completed Successfully

Quality Management System:


Wide range of development skills:

Expert in IT technologies :


• Member of IBS GmbH

Industry experience

XII Silence Software – www.12silence.com

XII silence Software is a young romanian company, located in Bucharest,

established by professionals with years of outsourcing experience in software

development, ,web design and web related technologies (web programming,

SEO, web hosting)

Stability in IT outsourcing:



50

Nearshore location:



Strong background: 100 + successful projects

Software development rates



Wide range of development skills: C++, C#, ASP.NET, Java, J2EE, PHP, MS SharePoint,

Lotus NotesDomino, Crystal Reports, dot Net programming, etc.

Expert in IT technologies : NA

Industry experience: NA

IP Devel – www.ipdevel.net

IP Devel was created in October 2000 to provide complex IT outsourcing

services, focused for the beginning on software development services. The

two cofounders – Mr. Bogdan Putinica and Mr. Daniel Bogdan - decided to

set up IP Devel after identifying an ever increasing need on the offshore

markets for high quality services combined with the optimization of business

costs resulting in an important competitive advantage for clients who

embraced this partnership model.


51



Nearshore location:




Software development rates:



• SEI CMMI Level 3 in the near future

Wide range of development skills: 300+ technologies & tools (C++, C#, ASP.NET, Java,

J2EE, PHP, MS SharePoint, Lotus NotesDomino, Crystal Reports, dot Net programming,

etc.)



• Member of the Oracle Partner Network (OPN)

• Partner of GCA, TIBCO, MIT, BRAIN SPOTTING and DOCUMENTUM

Industry experience: Finance & Banking, Multimedia & Entertainment, Automotive,

Telecommunication, Microelectronics


52

POLAND

Poland

Map of Poland

Capital – Warsaw


GDP (PPP*) – $ 631.8 billion


Time Zone – CET (UTC+1)

Summer (DST) – CEST (UTC+2)

Poland, an EU member since 2004, is considered to be an attractive outsourcing location for

Europe and especially for Germany due to cultural and time zones compatibility. Good skills

of foreign languages, namely English and German add value to the country. There are

numerous connections to the US.


Mlns)

310



outsourcing

7,800


32,800 66,000

Largest IT outsourcing companies: Polcard, Euronet, HP Poland, Accenture,


53

IBM Poland, Grytek, Business Point, Xerox

Polska, COPI KGHM, Archidoc

IT Associations: Polska Izba Informatyki i Telekomunikacji -

PIIT

www.piit.org.pl

TABLE – 4

RISK DIMENSIONS: POLAND

Political Risk

Strong government is relatively stable, but corruption is an issue. There’s growing support

for the IT industry; continuing to work with foreign governments; political stability; EU

member.

Legal Risk

An inferior and sometimes nonexistent IP and legal system; growing set of incentives, but

not as high as other countries; mixture of continental (Napoleonic) civil law and holdover

communist legal theory. Changes are gradually being introduced as part of a broader

democratization process; limited judicial review of legislative acts; lack of political will by

the Polish government to shut down the open air market for selling copyrighted materials,

plus a lack of enforcement; lack of legislature to enforce; improvements are slowly made.

Cultural Risk

English not widely spoken, but gaining; German is the major foreign language, affinity and

respect for the U.K., U.S. and Germany; lack of customer service.


54

Economic Risk

GDP—purchasing power parity: $ 631.8 billion

GDP growth: 4.9%

GRAPH - 4

Small and medium-size state-owned companies and a liberal law on establishing new firms

have encouraged the development of the private business sector. Poland has steadfastly

pursued a policy of economic Liberalization throughout the 1990s and today stands out as a

success story among CE/EE economies; strong economic growth during past year. Poland is

now facing a rather flat growth. EU-membership may provide new impetus; strong foreign

investment; fiscal problems; economic reforms under way; losing out at FDI inflows. Poland

currently suffers low GDP growth and high unemployment.


Telephones: 12.13 million


55

Internet users: 9 million

Cellular User: 41.3 million

Good infrastructure, but some areas need improvement, liberalized telecom policy, strong

telecom infrastructure; well developed public infrastructure; good transportation system.

IT Competency Risk

Quality project management lacking; excellent technical experience; highly skilled IT

workers Custom Code Writing (body shopping): Average BPO: Growing, but average

System Writing Project R&D: Excellent

Human Capital Risk

labor force of 16.92 million.

40,000 graduates per year; biggest Eastern European country; larger labor pool than other

EE countries; highest number of universities, excellent education system;

Costs

Still low, but growing. Wages are growing.

Market Opportunity

MARKET:

2005: 20%

2006: 24%

2007: 23%




56

—Population growth: 0.02%

—Market size: $22 million in Poland in 2003

Overall Assessment

Interesting for continental European countries especially. Germany. Good for nearshoring

from continental Europe. Major outsourcing for Western defense manufacturers; excellent

relationship with the U.K.; pool of educated IT workforce; growth is slowing down; a player

in EE/CE market; political stability; losing out on foreign investments; good telecom

infrastructure; proximity to Western Europe.

Future

Poland’s outsourcing industry will build on the enthusiasm with regard to the EU-accession;

cost will get higher, but due to a larger pool of it workers, Poland will remain a future

favorite destination; larger than the Czech Republic or Hungary.

COMPANIES AND PROFILE: POLAND

PGS Software – www.pgs-soft.com

PGS is a dynamic software development and information technology

outsourcing company with two nearshore development centers in Poland.

They provide nearshore outsourcing solutions to enterprises in Europe and

offshore to services in USA. Combining proven expertise in technology, and

an understanding of emerging business domains, PGS delivers a range of

outsourcing services that includes Custom Application Development,

Integration Solutions and product engineering.


57

They regains that your business must keep pace with the speed of thought and

we believe that your ideas and innovations deserve a better return on IT

spend. They address these changing needs of your business with solutions

that are not only cost-effective but also fast to deploy, highly scalable and

reliable.

While traditional outsourcing concentrates on non-core tasks being shipped

out, PGS outsourced software development is targeted on the core tasks, the

most critical part of your rganization. Traditional offshore development is

promoted on the basis of labour cost advantage, whereas PGS nearshore

development is built on reducing costs but increasing measurable value from

total IT spend.


• experience in Nearshore/Offshore software development since 2005 • full-cycle software development services

Nearshore location:

• Wroclaw, the capital of Poland

• Second centre in Rzeszow, Poland

Professional IT personnel: 70 + employee

Strong background: more than 100 successful projects



• ISO 9001:2000 certification • SEI CMMI Level 3 in the near future

Wide range of development skills: Microsoft .NET and Java EE, scripting tools, such as

JavaScript and PHP, together with a deep understanding of state-of-the-art software-as-a-


58

service (SaaS) architectures, cloud computing, mashups and user-generated applications and

Web 2.0 social media platforms.

Expert in IT technologies:

• Microsoft Gold Certified Partner • Partner of Xceliant(SAAS),PAIIZ and Klaster

Industry experience:

BigosIT – www.bigosit.com

Bigosit delivers a range of outsourcing services that includes custom

application development, integration solutions, product engineering, custom

website design and development of complex internet systems. We base our

offerings on an understanding of clients business requirements and providing

dependable solutions.

Bigosit is an established global software development and information

technology outsourcing company with offshore development center in

Poland. Being in IT business for over 5 years now bigosit has a strong team

of 21 skilled experienced IT experts. Customers are companies of all sizes

ranging from startups to large enterprises.


• Experience in Nearshore/Offshore software development since 2003


59

Nearshore location:

• Wroclaw, the capital of Poland


Strong background: more than 70 successful project


Fixed Price model evaluated and charged according to the hour of work

Quality Management System: NA


Technical expertise: Java Software Development, .NET Development , Adobe Flex / AIR Development, PHP Application development , Web services , N-tier Applications


• Microsoft Registered Partner • Oracle Network Partner

Industry experience


60

BELARUS

Belarus

Map of Belarus

Capital – Minsk






Serious support of IT sector from the Belarus state does promote IT outsourcing in the country. The market consolidation is very strong related to the other Eastern European countries. Belarus has very stable positions in hardware design.

Volume of IT outsourcing market (USD Mlns)

288

Number of IT outsourcing companies 480 Number of employees involved in IT outsourcing

9,500

Rates per year** (USD) min Max 26,240 47,360

Largest IT outsourcing companies: Epam, IBA, Belhardsoft, Belhard Group, Softclub, System Technologies, B-logic

IT Associations: Infopark

www.infopark.by

TABLE - 5


61

RISK DIMENSIONS: BELARUS

Political Risk

Belarus would like to reduce its dependence on Moscow whose financial backing does not

come without a quid pro quo. Russia thus benefited from the transfer of half ownership of

the local gas transport company to Gazprom, which reduced Belarus's earnings linked to the

transit of gas to Europe. But President Alyaksandr Lukashenka's authoritarian grip on power

has been an obstacle to rapprochement with the West, whose concretisation would also

depend on Belarus implementing the liberalisation measures that could effectively attract the

capital needed to modernise the economy.

Legal Risk

The fall of prices for oil re-exported to the West, deterioration of the terms of trade, the loss

of market share in Russia, and the increase in unit labour costs pose problems that call for

structural reforms. Industry remains handicapped by low productivity and very limited

energy efficiency. A business environment not very conducive to development of the private

sector has deterred investment despite a high level of education. The government does,

however, have plans to privatise 600 companies by 2009.

Human Capital Risk

Belarus was an “assembly plant” of the former Soviet Union, which resulted in a skilled and

well-qualified labor force, along with a number of technical universities, schools, labs and

scientific institutions. The Belarusian education system goes back to the time of the former

USSR. There are many universities, institutes and colleges that train high-quality

programmers, QA specialists, designers, etc. Every year, about 2,000 highly qualified IT

specialists come to the market.


62

Economical Risk

GRAPH-5

Economic growth began to slow in 2008 and a more significant slowdown is expected in

2009. Subsidised imports of gas from Russia have contributed substantially to the country's

economic performance. The gradual alignment of the imports with world gas prices by 2011

thus tends to weaken local industry and spur surges of inflation. Currency issued by the

Central Bank reinforces the rise of prices. The slowdown in Russia also affects Belarus.

The deterioration of external accounts since 2005 is particularly troublesome in the current

difficult financial context. Foreign debt has been growing rapidly. With foreign exchange

reserves representing just over a month of imports, the economy depends on foreign aid

(IMF, Russia…).

Costs

One of the main advantages of outsourcing in Belarus is the low labor costs. Typically, the

rates of Belarusian software houses are about seven times lower than those of the U.S. or

Western Europe

Overall Assessment

The Belarusian government actively supports IT outsourcing. An offshore-programming


63

zone provides a legislative basis for offshore software development. There are also

preferential taxation policies. This will help Belarus Outsourcing Industry to grow more in

the Coming Years.

COMPANIES AND PROFILE:BELARUS

Belsoft – Borlas Group ltd. – www.belsoft-borlas.by

BelSoft-Borlas group is a part of a leading Russian IT and e-Business

consulting company - Borlas Consulting Group. Our company was founded

in 2006 in Minsk, the capital of Belarus, by Russian and Belarusian IT

leaders – BORLAS and BELSOFT.

Our mission is “Adding Value to Customers’ business through

comprehensive IT outsourcing and IT consulting solutions”. We aim to

become a trusted partner for our clients and business partners, including the

leading software and engineering companies around the globe.

In our work, we efficiently utilize expertise and experience gained by the

both founding companies during more than 14 years on the IT market: large-

scale comprehensive business automation projects, offshore software

development and systems integration projects.

With highly skillful software development staff and consultants in

Management Information Systems, we service our customers by providing a

creative and cost effective array of IT solutions from concepts through

implementation to businesses in the United States, Eastern and Western

Europe, Russia and Belarus.




64

Nearshore location:

• Minsk, Capital of Belarus


Strong background: More than 50 successful project completed




Wide range of development skills: Java2EE, .Net, Win32, Oracle AS, WebSphere, WebLogic, Tomcat/JBoss, IIS, Zope, Oracle Fusion Middleware, MQSeries, MSMQ

A2A and B2B integration based on J2EE, XML, Web services, EDI, ebXML etc.


• Oracle Partner

Industry experience: Multiple

Belhard – www.belhard.com

Founded in 1994 by two friends Igor Mamonenko and Andrey Grigortsevich, BelHard has now grown into an IT holding giving jobs and opportunities for professional growth to more than 1000 employees.

Belhard’s big software development team consists of a firm chain of business-analysts, IT project managers, web developers, testers, and supporters that will flawlessly shape your ideas into cost-effective and reliable products..




65

Nearshore location:

• Minsk, Capital of Belarus


Strong background: More than 500 successful completed Project



• ISO 9001:2000 certification • CMM

Wide range of development skills: Java2EE, .Net, Win32, Oracle AS, WebSphere, WebLogic, Tomcat/JBoss, IIS, Zope, Oracle Fusion Middleware, MQSeries, MSMQ, A2A and B2B integration based on J2EE, XML, Web services, EDI, ebXML etc.


Industry experience: Multiplle

Qulix System – www.qulix.com

Qulix Systems is an international offshore software development company

with offices in the UK, Russia and Belarus. It has been successfully operating

for almost 7 years and currently employs more than 150 qualified software

engineers and managers. Our powerful combination of business process

analysis and technical expertise enables us to provide a wide range of IT

services across a number of industry verticals, these include finance &

banking, telecommunications, insurance, healthcare, SCM and

manufacturing. State of the art technology, ISO9001 compliant quality

processes and a unique blend of corporate values and enthusiastic, skilled and

experienced staff allow Qulix Systems to provide best of breed solutions,

services and products to customers across the globe.


66

With Qulix now established in the UK, this allows for onsite project

management, a secure legal basis for trading and comprehensive insurance

while maintaining competitive costs, superior quality and process

transparency at the offshore end.



Nearshore location:

• UK, Russia and Belarus • Minsk, Capital of Belarus

Professional IT personnel: 150 + employee

Strong background: more than 200 successful projects




Expert in IT technologies: NA

Technical experts: MS.Net, Java Solutions, J2ME development (MIDP 1.0 and 2.0),

Symbian software development, including core level development, Palm software

development, WinCE/ WinMobile development, Compact Framework, C++, Usage of

Bluetooth, GPRS, GPS etc.

Industry experience: finance & banking, telecommunications, insurance, healthcare,

SCM and manufacturing

Science Soft – www.scnsoft.com


67

Founded in 1989, ScienceSoft Inc. is one of the most mature IT outsourcing

service providers in Eastern Europe. During 20 years our custom software

development center has successfully completed more than 200 large projects

(and some of them took more than 100 man-years). Today we are proud to

state that 40% of Fortune 500 companies use software developed by us.

Over the 20 years of success, our team has increased up to 250 full time IT

experts. Our custom software development center possesses strong

experience in custom software development successfully handling all major

programming languages and technologies: C++, Java, .Net , as well as

Unix/Linux, web and database based technologies.


experience in offshore software development since 1989

Nearshore location:

• Minsk, the capital of Belarus

Professional IT personnel: 250 full time IT experts and a network of 100+ developers

Strong background: 200+ successfully completed large outsourcing projects


• ISO 9001:2000 certified, CMMI3 pre-assessed

Wide range of development skills: C++, Java, .Net , as well as Unix/Linux, web and database based technologies.


• Microsoft Gold Certified Partner • Selected as an IBM Core supplier for technical services 2009

Industry experience: Telecommunications, Healthcare & Life Sciences, Security

Engineering, Retail, Media & Entertainment


68

BALTIC STATES

Estonia, Latvia, Lithuania in Combined is called as Baltic States. The reason to call them

Baltic States is the all are situated near the Baltic sea. More or less there Culture Growth and

Political Situation are same. Here I will include all the three countries in Short except

Latvia, and some important Issues Such as Political Risk, Infrastructure Risk and

Economical Risk are included for Estonia and Lithuania.

ESTONIA

Estonia

Map of Estonia

Capital – Tallinn






High quality of services and cost effective production attract customers to Estonia – a traditional outsourcing center for the Northern European countries. Estonia is the country that developed Skype and is also well known for the large number of know-how’s of modern IT solutions for public sector.


Mlns) 140



outsourcing 3,700


30,600 57,800

Largest IT outsourcing companies: Webmedia, Mandator Estonia, Helmes, Skype,

Playtech, Microlink, Datel, ProExpert, Cybernet


69

IT Associations: Estonian Association of Information Technology

and Telecommunications

www.itl.ee

TABLE - 6

RISK DIMENSIONS: ESTONIA

Political Risk

The three-way government coalition formed after the March 2007 elections has given signs of internal tensions. Any change of government would, however, have no effect on the pursuit of economy policy. The August 2008 conflict between Russia and Georgia, meanwhile, did nothing to improve Estonia's already strained relations with its powerful neighbor since the riots triggered in April 2007 when Estonian officials moved a statue commemorating the velour of Soviet soldiers. The repercussions of these tensions have nonetheless remained limited to tourism, and rail and port transit traffic.

Economical Risk

GRAPH-6


70

Estonia slipped into recession as early as 2008 due to sagging domestic demand. The fall of

property prices and the upsurge of inflation eroded household confidence leading to a

reduction in consumption spending. With margins shrinking (under pressure from rising

payroll costs), access to credit increasingly difficult, and sales slowing, companies

postponed investment projects. And in this unfavorable context, companies have begun to

experience difficulties with payments to suppliers. Sectors like construction, consumer

goods, automotive spare parts, and, more generally, those that are credit-dependent or

labour-intensive have been the most vulnerable. The decline in domestic demand is expected

to continue in 2009. Weak foreign demand, meanwhile, will likely stall export growth. And

recovery will develop slowly, emerging at best late 2009. Although the inflation rate will

ease substantially in the wake of the economic slump and the drop in energy prices, it will

be unlikely to be in compliance with Maastricht criteria before 2011. The expected decline

in tax revenues will, however, be unlikely to jeopardise the financial solidity of a public

sector that ran a surplus until 2007 with government debt moreover virtually nil at four per

cent of GDP.


71

LATVIA

Latvia

Map of Latvia

Capital – Riga






Latvia is business friendly country, what makes it easy-to-outsource. The fastest GDP growth rates in Europe, low taxes (corporate income tax is 15%, flat), but competitive labour costs and high productivity of Latvian professionals attract customers to this country.


20


600


Largest IT outsourcing companies: Nexum IT, Tilde, DEAC, Lattelecom Technology, Exigen Services DATI, SAF Tehnika, TietoEnator Alise, Data Pro, DEAC, ZZ Dats, RIX Technologies, FMS GROUP.

IT Associations: Latvian Information Technology and Telecommunications Association - LIKT www.litta.lv Business Software Alliance www.bsa.lv

TABLE – 7


72

RISK DIMENSIONS: LATVIA

Political Risk

Latvia has been able to engineer a smooth transition from Communist rule; stable

government. Russian minority is a concern.

Legal Risk

One of the most efficient tax systems in Europe; rule-based economy; liberal economy

modeled after Anglo- Saxon economies; IPR protection is still an issue, but Latvia has

improved its intellectual property rights.

Cultural risk

It is extremely hard for a Slav to get rid of Slavic accent when speaking English, however, it

is rather easy for Latvians or Lithuanians, whose language is much more similar to English.

Great affinity with Nordics.


Telephones: 653,900

Internet users: 936,000

Very good infrastructure; government is making more improvements with the help of

Nordics and the EU; telecom is inadequate, but is being modernized to provide an

international capability.

IT Competency Risk

Good project management; excellent regarding software development Custom Code Writing

(body shopping): Average to good BPO: Average to good System Writing Project R&D:

Excellent


73

Human Capital Risk


Much better educated workforce technically. There is a larger percentage of IT students and

students of technical sciences in the Baltic States than in the rest of Eastern Europe,

especially for software development; good universities; limited supply.

Economical Risk


GDP growth: 7.4%

GRAPH - 7

Continuing economic growth; accession to the EU offers great opportunities. The majority

of companies, banks, and real estate firms have been privatized, although the state still holds

sizable stakes in a few large enterprises.


74

Costs

Costs are low now, but they won’t stay that way. Proximity to Scandinavian companies. The

average salary in Latvia and Lithuania is higher than other parts of Eastern Europe and

Russia. To our knowledge, telecommunication costs from the ten new Eastern European EU

member countries are the highest in Latvia.

Market Opportunity

MARKET:

2005: 20%

2006: 24%

2007: 23%



—Population growth: 0.71%

Overall Assessment

Excellent destination for outsourcing, proximity to Nordics and the EU, good infrastructure

and skills; limited labor pool and an aging population; wages and costs are getting higher

due to EU integration.

Future

Together with its neighbours Estonia and Lithuania, Latvia is a major outsourcing center for

Northern/continental Europe. It may lose its status as a top 20 player due to an aging

population that’s getting smaller as well; limited labor pool; cost would increase

dramatically


75

LITHUANIA

Lithuania

Map of Lithuania

Capital – Vilnius






Lithuania has the fastest growing economy and the lowest corporate tax rates in Europe. Macro stability and flexibility, easy travel throughout the European Union, developing innovation policy all together attract the Western European countries. Well educated and professional personnel is guaranteed thanks to the highest number in EU of graduates that reaching 1000 per year.


44


1,300


Largest IT outsourcing companies: Baltic Software Solutions, Sintagma, Sonex Group, Gaumina, Elsis Group

IT Associations: Baltic Outsourcing Association www.balticoutsourcing.com Association INFOBALT www.infobalt.lt

TABLE – 8


76

RISK DIMENSIONS: LITHUANIA

Political Risk

Very low political risk, The October 2008 legislative elections spawned a coalition just as

precarious as its predecessor. The broad lines of economic policy are, however, unlikely to

be in jeopardy. On the international level, relations with Russia have been strained since the

interruption of oil deliveries to the Mazeikiu refinery in July 2006. And Moscow's

recognition in August 2008 of the independence of Georgia's two separatists regions,

Abkhazia and South Ossetia, did nothing to improve them.

Economical Risk

GDP(PPP): $54.03 billion

GDP Growth % : 4

GRAPH - 8

GDP growth slowed considerably in 2008 affected by the property market downturn and

slumping private consumption. Economic stagnation is expected to grip the country in 2009

amid tightening credit conditions, sagging economic-actor confidence, and weakening

foreign demand. After surging in 2008, inflation has tended to ease recently as a result of the


77

domestic demand slowdown and the fall of raw material prices. Although trending down, the

price level will nonetheless remain high, which will very likely prevent the country from

adopting the euro before 2012. And excessive inflation previously disqualified the country

in 2007. Coface has recorded no noteworthy deterioration of payment behaviour on the part

of Lithuanian companies at this juncture. Construction, sectors associated with consumption

and, at a more general level, those dependent on bank credit could, however, gradually feel

the effects of the crisis.


78

COMPANIES AND PROFILE: BALTIC STATES

Media Works – www.mediaworks.lt

MediaWorks is a technology company providing consulting and outsourcing

services to the Software Development, Education, Financial, Manufacturing,

and Media industries alongside IT recruitment and project staffing services.

The Company was set up in 2000 by a group of specialists with experience in

IT, Marketing and Finance. The company grew steadily and is further

successfully expanding in the Baltics and abroad. MediaWorks' employees

have extensive experience and strong capabilities in Business and IT Strategy

Consulting, Systems Design and Integration, Programming, Web design,

Project management and IT recruitment and staffing services.

MediaWorks' current clients are major Lithuanian companies and companies

in Finland, Sweden, Germany and Australia.



Nearshore location:

• Vilnius and Kaunas, Lithuania

Professional IT personnel: 100 + EMPLOYEE

Strong background: More than 200 successful project


Quality Management System: NA


79

Wide range of development skills: JAVA, EJB, JSP,Javascripts,C, C++,CORBA,VB VBSripts, ASP, Cold Fusion,PHP, Sybase DB, DB2, Oracle DB, MS SQL, PostgreSQL, MySQL.

Expert in IT technologies: NA

Industry experience: E-commerce, Business Management, Finance, Retailing, Distribution

Education

Euri Techa – www.euritecha.lt

“Euritecha” is IT Outsourcing Company founded in Y2001. We provide

Software development and Integration services.

Software development and Integration services:

• Development of the custom software that meets particular client’s needs;

• Integration of different software applications into one integrated system.

Our company has a Microsoft Certified Partner status (MCP). It guarantees

that our specialists know Microsoft technologies and products.

Our mission is to provide the best solutions to the customers. It means, that

our services benefit the customers the most. For building the best solutions

for you, we are choosing appropriate technologies, software and hardware.

In project development we are using the international standards (such as

IEEE 12207 and CMM), compliant processes. It guarantees the control and

predictability of the project results and costs. Project is being implemented in

a well-planned and managed way it has definite and particular results.


80



Nearshore location:

• Kaunas, Lithuania


Strong background: More than 150 successful Project


Quality Management System :

• IEEE 12207 standard and has incorporated Software Engineering Institute Capability Maturity Model (SEI CMM)

Wide range of development skills: .NET – core competence and other , Microsoft SQL

Server, Oracle,.NET, Web Services, BizTalk ,UML


• Microsoft Certified partner

Industry experience: NA

Alna – www.alna.com

With Headquarters in Vilnius, Lithuania, Alna is a global provider of IT

services. Having started its activities 18 years ago, currently Alna operates in

the entire Baltic region as its home market with the aim to become the leader

in Baltic States, to compete successfully and expand to other EU countries.

With more than 420 professionals and business consultants in three Baltic


81

countries, Alna creates and delivers unique and valuable solutions that ensure

customers competitiveness and being one step ahead. Having focused in

three main IT areas - IT services and consulting, enterprise resource

application solutions and software development – Alna has become a

powerful source to offer increased customer value, innovation, speed and

flexibility.

Being one of the first in the Baltics to invest into R&D and to introduce

innovation centre F1, Alna demonstrates that consistent investments in the

development of knowledge and expertise can help to create unique

competitive opportunities. Alna suggests using innovations in everyday

activities and taking advantage of the opportunities offered by the

information society



Nearshore location:

• Vilnius and Kaunas, Lithuania • Latvia and Estonia





• ISO 9001:2000 certification • SEI CMMI Level 2 in the near future

Wide range of development skills: Microsoft, Oracle, Java, PHP, etc



82

Industry experience: Public Administration, Utilities, Telecommunications, Banking

Elsis – www.elsis.com

he group of enterprises "ELSIS" is composed out of UAB "ELSIS", UAB "ELSIS Biuro

Sistemos" (Office Systems), UAB "ELSIS Verslo Sprendimai" (Business Solutions), UAB

"ELSIS TS", UAB "ELSIS PRO", OOO "ELSIS Kaliningrad" and ZAO "ELSIS Spb".

The group of enterprises "ELSIS" operates in the field of information technologies &

telecommunications (ITT) and electronic engineering systems:

• - it designs, develops, manufactures, distributes and maintains the ITT equipment

and software products;

• - it projects, implements, maintains and modernizes the specialized systems of

business and technological processes management, the systems of radio

communication and the electronic engineering systems, meant for various

assignment.

At present the group of enterprises "ELSIS", which started its activity in the year 1991, is

one of the largest companies, dealing with the ITT and electronic engineering systems not

only in Lithuania, but in the Baltic states as well. In the year 2007 the consolidated income

of the group of enterprises "ELSIS" exceeded 83 mln. Litas (24 mln. Euro). More than 200

highly qualified managers, engineers, analysts, programmers and specialists of the other

profile work herein. The Quality Management System, implemented in the group of

enterprises, meets the requirements of the ISO 9001:2000.

Stability in IT outsourcing

• one of the oldest IT outsourcing company in Baltic States • experience in offshore software development since 1991


83

Nearshore location:

• Vilnius and Kaunas, Lithuania • Latvia and Estonia

Professional IT personnel: 200+ employees




Quality Management System:NA

Wide range of development skills: C++, C#, ASP.NET, Java, J2EE, PHP, MS SharePoint, Lotus NotesDomino, Crystal Reports, dot Net programming, etc.)

Expert in IT technologies :NA

Industry experience:


84

Chapter 5

Analysis

Findings

&

Suggestions


85

ANALYSIS, FINDINGS & SUGGESTIONS

COMPETITORS FOR INNOMINDS

Romania Poland Baltic States Belarus

Ukraine

Inno

min

ds

Company

IP D

eve

l

XII

Sof

t

4e

Sof

t

PG

S

Big

osi

t

Hyp

er

Sqr

M

edi

a

Eur

i tch

Aln

a

Els

is

Bel

soft

Bel

hard

Qu

lix

Sci

enc

e

Mira

soft

Otr

c U

kr

Qua

lity

Par

tner

ship

Mic

roso

ft Y N Y Y Y N N Y N N N N N Y Y N Y

Ora

cle

Y N N N Y N N N N N Y N N N N N Y

Su

n

Mic

rosy

ste

ms

N N N N N N N N N N N N N N Y N Y

Cer

tific

ate

s ISO

9

00

1:2

00 Y Y Y Y N Y N Y Y Y Y Y Y Y Y N Y

Ot

her

s

Y N N N N N N Y Y N N Y Y N N N N

No

of Y

ears

In

Fun

ctio

n

5+ Y Y Y N Y Y Y Y Y Y N Y Y Y Y Y Y

10+ N N N N N N Y N N Y N Y N Y Y N Y

15+ N N N N N N N N N Y N Y N Y Y N N

No

of p

roje

cts 100+ Y Y Y Y N N Y Y Y Y N Y Y Y Y Y Y

200+ Y N Y N N N Y N Y Y N Y N Y Y N Y

300+ Y N N N N N N N Y N N Y N N N N N

No

of

empl

oyee

100+ N N Y N N Y Y Y Y Y N Y Y Y Y Y Y

200+ N N N N N N N N N Y N Y N Y N N Y

300+ N N N N N N N N N N N Y N N N N N


86

The companies have been analyzed and tabulated according to the objective mentioned

earlier which is, to evaluate the companies of the respective countries keeping Innominds as

benchmark. ‘Y’ indicates Yes and ‘N’ indicates No in the table. Overall Summary of the

Table is as follows:

ANALYSIS: ROMANIA

As in the table mentioned above three competitors for Innominds has been chosen from

Romania and have been examined over some criteria. Detailed information about the

companies are mentioned in the companies profile of the country. From the table we can

find out that Innominds have an edge over the companies on almost all the criteria. The

following are the areas where Innominds lag and lead.

Innominds Weakness

• Some companies have More than 1 certification

• Some Companies have done More Projects than Innominds

Innominds Strengths

• Innominds have more Quality Partnership than all Romanian Companies

• Innominds have more Human resource

• More years of Experience

ANALYSIS: POLAND

Poland Companies seems not that competitive in any respect. Innominds have got edge over

all the companies of Poland

Innominds Strengths

• Innominds have More Quality Partnership

• Innominds have more human resources

• Innominds have more years of experience


87

ANALYSIS: BALTIC STATES

In Baltic States Companies have an edge over Innominds . Baltic States Companies Beats

Innominds in all fields except Quality Partnership.

Innominds Weakness

• Companies have More Certifications

• Companies have done more projects than Innominds

• Companies Have more Human Resources than Innominds

• Companies have more years of Experience

Innominds Strengths

• Innominds have more quality certifications

ANALYSIS: BELARUS

In Belarus according to the Table is less or more in the same situation as Baltic States.

Innominds in this Country also leads in only Quality Partenership

Innominds Weakness

• Companies have More Certifications

• Companies have done more projects than Innominds

• Companies Have more Human Resources than Innominds


• Innominds have more quality certifications


88

ANALYSIS: UKRAINE

This the country which has got the lowest number of competitors and the only area where

Ukrainian companies lead is the Year of Functioning / Experience

Innominds Weakness


Innominds Strengths

• Innominds have More Quality Partnership

• Innominds have more human resources

• Innominds have more years of experience


89

COUNTRY ANALYSIS

Country

GD

P (

Cur

rent

)

FD

I(C

urre

nt In

war

d)

HU

MA

N C

AP

ITA

L

VO

LUM

E O

F IT

M

AR

KE

T

RA

TE

S

INF

LAT

ION

AIR

PO

RT

S

TE

LEP

HO

NE

LIN

ES

AV

ER

AG

E P

OIN

T

RA

NK

India 1 1 1 1 1 2 1 1 1.125 1

Poland 4 2 3 4 8 1 3 3 3.5 2

Ukraine 6 3 2 2 2 8 2 2 3.375 3

Romania 2 4 4 3 6 3 6 4 4 4

Belarus 3 8 5 5 3 7 5 5 5.125 5

Lithuania 5 7 7 7 4 5 4 6 5.625 6

Latvia 7 6 6 8 4 6 7 7 6.375 7

Estonia 8 5 8 6 7 4 8 8 6.75 8

TABLE – 9

As mentioned earlier in the methodology, the ratings are given to each cpuntries depending

on the points received by them. Overall points and ranks are mentioned in table–2. The

country with the lowest point is ranked 1 and as per the rating, India with 1.125 points is at

rank 1. The last rank is given to Estonia as the worst outsourcing destination with 6.75

points.

Hence from the analysis, taking 2008 as the base year. We can say that India is still the most

preferred destination for IT outsourcing and their closest compititors are Poland, Ukraine

and Romania with 3.5, 3.375 and 4 points and are ranked 2, 3 and 4 respectively.


90

Chapter 6

CONCLUSION


91

CONCLUSION

Being on the Top doesn’t mean you will always be there. To maintain the Position, one

should always be competitive and beware of Threats and their own weakness. India is

currently a leader in IT Outsourcing. Many new countries that are emerging may be the

leaders in the coming years.

India is far ahead of all its competitors and will be the leader for coming few years. India has

no opportunity in nearshore outsourcing; but as an offshore outsourcing Player it has

enormous Potential. Culture, Language, and Distance are few points which can make india

into the race with the Nearshore Destinations like Ukraine, Poland, Romania etc. of Europe.

The recession has gripped the companies all over the world and the best option to reduce

their functional cost is to Outsource their work, Current Situation is the best time to get the

opportunities from European Providers by Offering new and better options to reduce their

current functioning cost.

The Biggest threats for India are the countries from Asia Pacific regions such as China,

Philippines and Vietnam; From some of the reports it is clear that if India does not work on

its weaknesses China, will over India. Quality and quantity of human capital well versed in

both English and IT is the biggest strength of India. To continue their journey to be a leader

India should emphasise on improved foreign language skills and take an extra edge over

other countries who are becoming a threat for India.

Stable Government, positive growth etc. show a trend that India is shining and to continue

its journey it should move fast toward in grabbing the opportunities.


92

BIBLIOGRAPHY


93

BIBLIOGRAPHY

BOOKS

1. Malhotra, Naresh K., 2008, Marketing Research, Pearson Prentice Hall, New Delhi,

2. Hitt,Hoskisson,Ireland 2009, Management of Strategy, South Western Cenage

Learning,New Delhi

RESEARCH AND ARTICLES

1. “Global Outsourcing Report”, Mark Minevich, Going Global Ventures Inc., March

2005

2. “Central & Eastern Europe IT Outsourcing Review ‘2007”, Ukraine Hi-Tech

Initiative, December 2007

3. “Outsourcing Industry in Ukraine”, GOAL Europe, June 2007

4. “ Global Sourcing Trend”, Alistair Maughan (London), Julian Millstein (New York),

Nigel Stamp (Hong Kong), Morrison Foerster


94

WEBSITES AND ONLINE DATABASES

1. www.itonews.eu

2. www.euroitx.com

3. www.worldbank.org

4. www.unctad.org/fdistatistics

5. www.gartner.com

6. www.ceeoa.org

7. www.pri-center.com


95

Appendices


96

APPENDICES

FDI – Inward and Outward for European countries and India

Graph - 9

Graph indicates some countries had negative FDI. Negative FDI is often interpreted as withdrawal of investment by foreign investors from the host economy. While one can observe a negative value of FDI in such a scenario, it can also arise when:

1 Continuous losses in the Singapore affiliate leading to negative reserves

market trends and competitive analysis

Documents