novosibirsk october 2002 outsourcing to scandinavia by jens brinksten ceo, technology outsourcing...
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Novosibirsk October 2002
Outsourcing to Scandinavia
By
Jens BrinkstenCEO, Technology Outsourcing Systems
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Agenda
TOS Market Research Outsourcing today The Scandinavian market Outsourcing – advantages /
disadvantages What to outsource What Scandinavian firms look for when
choosing outsourcing partners Key factors for success in the
Scandinavian market
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TOS Market Research
Our study confirms that many companies experience a lack of IT resources:
lack of people with the necessary expertise in specific areas
difficulties with holding on to the young people who are easily bored with routine jobs (often a turnover of people of 30% per year)
periodical work: peaks and “start up” time-to-market
Competencies include: Microsoft software (server), .NET, SAP, WAP-programming, C++, Java, XML, database etc.
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Outsourcing today…
The companies apply different strategies to address the problem of lack of resources:
outsourcing in-house (to other divisions, mostly abroad)
outsourcing to Scandinavian consulting companies
outsourcing offshore intensive headhunting and job
campaigns using freelancers
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The Scandinavian Market
Norway
Sweden
Finland
Denmark
IBM
CSC
CGE&Y
Accenture
CGE&Y
WM-Data
Adcorre
IBM
CSC
Siemens CG
CGE&Y
WM-Data
Compaq
Accenture
TietoEnator
The major system integration firms in Scandinavia are:
There are numbers of other players in the market, but these are the one, we meet as competitors in our work
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The Scandinavian Market
Norway
Sweden
Finland
Denmark
India
Ukraine
Russia
Baltic
India
Hungary
Baltic
Russia
Ukraine
India
Czech Rep.
Baltic
Ukraine
Russia
Philippines
Ireland
Baltic
India
Russia
From where do we see offshore development firms in the Scandinavian region?
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Outsourcing - advantages
The attitude to outsourcing is generally positive, although it is recognised that there are some problems involved in this. The main advantages are:
Solving a capacity problem in a quick and low cost manner (compared to hiring people)
Solving a competence/knowledge situation No hiring of ad hoc staff Flexibility in production and delivery
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Outsourcing – disadvantages - I
The main disadvantages are:
Lack of long term internal knowledge Lack of building up competences Quality control and documentation Time-consuming project management
In some companies (SMEs), it is often required to have competencies in-house also – especially when the outsourced projects are of smaller size
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Outsourcing – disadvantages - II
The main disadvantages of outsourcing abroad are (besides those mentioned):
Different language (communication in general)
Different culture and political system Lack of trust and security Lack of control Not secured by European/local law
Close management of the outsourced project is required
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What to outsource
IT projects most needed for outsourcing are:
Standard software programming Database programming Internet and e-commerce programming
(server and networks) WAP-applications
Projects for which the necessary competences / knowledge is lacking
Routine jobs in developmental projects
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Outsourcing Partner
What Scandinavian firms look for when choosing outsourcing partners A local representative in their own country
(local contracts) Managements models and structured
project methodology Security and reliability Flexible and scalable resources Fast turn-around times Local or international references Price (quality to price)
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Key factors for success
If a Russian company wants to have success in the Scandinavian market, they need to have some key factors in place: A local legal entity as representative Local marketing and success stories Local project management Strong project management tools Strong communications skills Delivery and quality assurance Support and service functions Quality to price
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Russian firms already have….
Most medium and large size Russian IT outsourcing firms have: Some of the best trained IT specialists and
architects. Because of the emphasis on mathematical and logical thinking, they can solve complex problems, rather than just write code
In addition, Russian programmers have traditionally dealt with limited computing resources by developing more efficient, elegant programs.
Flexible and scalable resources Many US and European references Quality to price (attractive price level)
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Russian firms needs to…. I
To make themselves more attractive, the Russian IT firms have to: Change their approach from an engineer
driven approach/profile, to a more marketing driven approach
Become more active in alliances and partnerships
Use more time on profiling efforts, such as articles in the International Press and media
Use the industry organisations more – because standing together makes you much stronger
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Russian firms needs to…. II
Furthermore the firms need to: Emphasize service level, guarantees
and data security Improve communication skills TRUST……
Improve the approach to foreign firms… we are not ”blood-
suckers”, who just want to buycheap labour and then sell it in the west with high profit!
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Why are we here…..
We are looking for long-term relations and partnerships with companies in Russia
We want to have close co-operation, and to understand you and your firms!
In Denmark we have a phrase saying:
””A sound business practice is aA sound business practice is a
business where both parties feel business where both parties feel
they gained from the business”they gained from the business”
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SPASIBO
Technology Outsourcing SystemsTechnology Outsourcing Systems
H.J. Holst Vej 3-5CH.J. Holst Vej 3-5C
DK-2605 BroendbyDK-2605 Broendby
DenmarkDenmark
Phone: +45 7027 1620Phone: +45 7027 1620
Fax: +45 7027 1621Fax: +45 7027 1621
E-mail: [email protected]: [email protected]