Transcript Document

Novosibirsk October 2002
Outsourcing to
Scandinavia
By
Jens Brinksten
CEO, Technology Outsourcing Systems
Agenda
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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
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.
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
The Scandinavian Market
The major system integration firms in Scandinavia are:
IBM
Compaq
CSC
Accenture
CGE&Y
TietoEnator
Norway
Finland
Sweden
Accenture
CGE&Y
IBM
WM-Data
CSC
Adcorre
Denmark
Siemens CG
CGE&Y
There are numbers of other players in the market, but
these are the one, we meet as competitors in our work
WM-Data
The Scandinavian Market
From where do we see offshore development firms in the
Scandinavian region?
India
Ireland
Ukraine
Baltic
Russia
India
Baltic
Russia
Norway
Finland
Sweden
India
Czech Rep.
Hungary
Baltic
Baltic
Ukraine
Russia
Ukraine
India
Denmark
Russia
Philippines
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
Outsourcing – disadvantages - I
 The main disadvantages are:
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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 inhouse also – especially when the
outsourced projects are of smaller size
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
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
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)
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:
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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
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)
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
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 ”bloodsuckers”, who just want to buy
cheap labour and then sell it
in the west with high profit!
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 a
business where both parties feel
they gained from the business”
SPASIBO
Technology Outsourcing Systems
H.J. Holst Vej 3-5C
DK-2605 Broendby
Denmark
Phone: +45 7027 1620
Fax: +45 7027 1621
E-mail: [email protected]