Has the recession changed outsourcing drivers for SME's and large companies?

Surely, there were a number of different aspects of outsourcing between enterprise and SME sectors even before the crisis. Outsourcing played different roles and spanned around different areas in each league. However, before the crisis some trends became widely common. Both sectors showed move towards more strategic forms of outsourcing where costs reduction wasn't only one major factor that drove outsourcing decisions. The crisis, however is deemed to change this trend. In volatile economic climate of last years many experts distinguished outsourcing drivers for each sector - claiming that large companies want to globalize and cut costs, while small and mid-sized seek expertise.

According to the latest survey by National Outsourcing Association the focus on the costs reduction has risen significantly among large end-users of outsourcing in UK. Today's big customers want 15 percent savings from outsourcing compared to 10 percent before the recession, while the time they want to achieve reduction has shortened. Access to the specialized skills and offloading of internal resources for mission critical processes ranked distant second and third positions.

At the same time another survey focused specifically on SME sector came with different indications. According to the survey conducted by Irish-based HiberniaErvos Technology Group, 63 percent of SME's who already utilize outsourcing put the ability to free up internal resources and focus on business-critical processes as a major benefit of outsourcing.

So is it just a specifics of each sectors? or there are more inclusive post-recession factors on place (such as difficulties for SME's to compete for qualified talent domestically or shortened time-to-market)?

Join the LinkedIn discussion on related subject here

Strategic Sourcing 2010: Driven by value!

Strategic sourcing is at its crossroads. Many organizations are re-evaluating their sourcing contracts. How about strategy, sourcing governance, supply and demand management? Enterprise and government are ready for a change, a move to get more value out of sourcing relationships!

For IT executives this means they have to become business partners and at the same time challenge their vendors and business counterparts: in the end it’s not really about cost savings – it’s all about business value! So the question is: What is the value of sourcing?

Nearshore Outsourcing Trend Grows Across the World

Although Nearshoring concept became a widely popular business practice across the Europe it's still in emerging phase in the Western Hemisphere mainly because of strong popularity of India offshore offerings. However, escalating uncertainties of regional threats in India combined with increased focus on vulnerability management and demand to keep data close to where business actually located have changed delivery preferences of US businesses towards nearshore and sameshore options.

Recent ranking "The Nearshore Americas Power 50" named the most influential Nearshore figures from 16 countries from Americas region. The region is considered to be the main nearshoring destination for US and viable alternative to offshoring to India. The $11 billion industry has all chances to successfully compete with offshore destinations as realities of unsafe world have fully overrun into outsourcing decisions. Focus on vulnerability management and operating with lowest downstream risks help nearshoring destinations to attract more attention.

The survey being made by Black Book Research indicates that Central and Eastern Europe and Latin America are viewed as significantly less dangerous outsourcing locations that all major hubs of India and being marked as the top destinations for operating with lowest downstream risks. Having services centers nearshore and sameshore will be a major client priority in years to come.

From other side in nerarshoring study conducted by Erran Carmel and Pamela Abbott argue convincingly that distance still matters, and point to customer choosing the nearshore option to gain benefit from one or more of the following constructs of proximity: geographic, temporal, cultural, linguistic, economic, political, and historical linkages.

Central and Eastern Europe is significant nearshoring destinations for Western Europe for more than a decade. Where geographical and cultural proximity provides with lower costs interaction, better communication and no time zone difference. As a result project management became more transparent, time zone eliminates the need in extra work and cost difference dilutes.

ISV's Lunch Seminar in Amsterdam - The Art of Software Dev

On June 16, Levi9 Global Sourcing in conjunction with the University of Utrecht, Microsoft Corp and Exact Software is hosting an IT industry specific lunch seminar.

The seminar will be held in Amsterdam, and will gather under one roof some of leading IT professionals and scholars from the Netherlands. Among keyspeakers there are such distinguished panelist as Prof. Dr. Sjaak Brinkkemper, Professor of Organization and Information Utrecht University with specialization in software products and Roland Janssen, Manager ISV Partner Group, Microsoft, Gerard Hurkmans, sales manager Levi9 and Aard ’t Hart, Director of Research & Innovation, Exact Software

The seminar is oriented on Independent Software Vendors (ISV's) and will attract executives and senior level professionals of leading tech companies in the Netherlands. The event will provide unique opportunities for ISV's to delve into the process of nearshore outsourcing and get real recommendations and advices for the effective adoption of the practice within corporate strategy.

Moreover, panel and knowledge exchange sessions will be held to raise the standard of management knowledge in this field. Session will kick off at 11:30 a.m. and will be followed by coffee reception at 1.45 p.m.

To register for seminar please click here.

EC demands more progress towards a single telecoms market

Digital Agenda Commissioner Neelie Kroes has lambasted EU member states for putting their national interests above efforts to achieve the full economic benefits of a "truly single and competitive EU-wide telecoms market".

Fragmented national markets and huge differences in mobile call rates are affecting hundreds of thousands of consumers and businesses, according to Kroes.

Member states need to do more to ensure telecoms rules are properly implemented and the necessary investments in innovative services are made for the benefit of all 500 million European consumers, she said.

Kroes said more progress needed to be made in the development of the mobile data services sector and the rollout of optical fibre-based next generation access (NGA) networks.

As the commissioner in charge of the recently launched EU Digital Agenda, Kroes is expected to put forward new recommendations on how NGA network rollouts can be made faster later this year.

The EU Digital Agenda aims to deliver broadband coverage to all Europeans by 2013. To help achieve this, national regulators are being urged to comply with a Radio Spectrum Policy Programme that aims to ensure radio frequencies that are freed by the transition to digital broadcasting (the "digital dividend") are made available for new services, such as mobile broadband.

To help drive forward its Digital Agenda, the EC recently establishd the Body of European Regulators for Electronic Communications.