Zijn sales en marketing uit te besteden?

Outsourcing is al een aantal decennia een oplossing voor organisaties om zich meer te kunnen concentreren op hun kerntaken. Daarnaast worden activiteiten geoutsourced vanuit de veronderstelling dat gespecialiseerde bedrijven dat beter en goedkoper kunnen.

CIO of the Year Award 2011

The CIO of the Year Award aims to give recognition to the best performing CIO in that year. The CIO of Year 2011 is expected to have shown constant top performance in running the IT function, achieving major improvements to the business or even enabling new business models, delivering outstanding project results and being a recognized leader with vision and strong people management skills. We are looking for "The Most I5 Chief" as the CIO of the Year 2011!
This years Award will be presented on the CIO Day 2011 on the 15th of November 2011 by founder of Levi9 Bernhard van Oranje-Nassau.

Ukraine won ITO Destination of The Year Award 2011

It's finally happened! Ukraine has been recognized by outsourcing experts as the top destination for ITO in 2011. The country has won the nomination "Outsourcing Destination of The Year" in the frames of European Outsourcing Excellence Awards.

Over the last decade Ukraine has gained a huge interest from the western countries for provision of outsourcing services in the areas of Informational Technology. Country's IT sector saw a double-digit growth over the last 5 years finally reaching 1 billion value last year. Today, Ukraine is the world's fifth IT services exporter worldwide with the biggest labor pool in CEE region.

Many experts agreed that country's specific traits such as unique geographical location, cultural likeness, rich labor pool and strong scientific legacy coupled with cost-benefits provided by country's non-EU memberships will play a crucial role in shaping outsourcing landscape in the coming years.

At Nearshore Outsourcing Blog we believe this is a great next step for Ukraine and would like to thank our associates for nominating Ukraine for this Award. Nearshore Outsourcing Blog together with Ukrainian Hi-Tech Initiative provided an informational support for the nomination!

Will Agile become the methodology of choice for large-scale software projects?

Late last year, Gartner predicted that by 2012 Agile development methods would be utilized in 80 percent of all software development projects. While small-to-mid-sized companies have witnessed vast successes from using an Agile approach, there is now a growing popularity in applying those same standards to enterprise-level software development efforts.

However, large-scale implementations may involve more comprehensive organization which in turn may influence flexibility and adaptability inherited in Agile. From this point do we need special practices to fit Agile for large-scale engagements?

Appreciate your insights as well as real-world case-studies of large-scale Agile implementations here in comments or join our discussion in LinkedIn

Please, also read our latest work - Agile and Nearshore - Formula to Successful Software Development

Dutch IT Outsourcing landscape looks healthier in 2011

Overall, more Dutch companies began to adopt the outsourced software development at the end of 2010 and beginning of 2011, according to the research. Currently, non-outsourcing companies outnumber those that outsource their SD/IT by only 3.6%, while in 2010 non-outsourcers outnumbered outsourcers by 26.8%.

This excerpt from the key findings of the the Dutch IT Outsourcing (ITO) survey 2011 conducted by a UK-based research firm IT Sourcing Europe reveals an across-the-board trend in Netherlands - more Dutch companies began to source their software development or other elements of IT to nearhsore, sameshore and offshore providers comparing to the last year results.

The major trends reflected in the survey demonstrate that in 2011 the Dutch ITO landscape looks healthier and more mature compared to the 2010 indications.

While in 2010 the vast majority of the outsourcing companies partnered with their service providers via the traditional Offshore/Nearshore Development Centers (O/NDC) or fixed price projects, in 2011 there are more Dutch companies that tend to go with dedicated / virtual teams located nearshore to complete the projects (up 34% from 2010)

Overall, in 2010 the vast majority of the Dutch ITO buyers were somewhat satisfied with their ITO partners and service providers, while in 2011 the majority of outsourcers are very satisfied with their partners – up 20.4% from last year.

Levi9 confirms this trend achieving exceptional results with its key customers by delivering innovative solutions through its dedicated nearshore centers in Serbia, Romania and Ukraine. This year Levi9 partner OnGuard has won a prestige award of the “Most Innovative ICT Company 2011 in Netherlands”.

Research Completed! Agile and Nearshore - Formula to Successful Software Development

"It's time for software professionals to stop sitting on the fence where agile is concerned.

Forrester Report 2009

Nearshore Blog is extremely pleased to present our new research work - "Agile and Nearshore - Formula to Successful Software Development".

The paper is accessible with this link and represents a great deal of our efforts aimed at giving a broad overview of Agile development methodologies and their practical appliance in commercial software development.

The study analyzes the history of Agile development, discusses the main changes occurred in commercial software sector over last years and presents real-world case-studies and successful implementation of Agile methodologies in conjunction with Nearshore delivery approaches.

The study features successful implementations of Agile for software product companies “Borland” and "OnGuard", large ICT multinationals “British Telecom” and professional ITO service providers “Levi9 Global Sourcing”.

We would like to draw your particular attention to the Levi9 case-study, being a commissioner of this research the company managed to successfully craft these two elements of successful software development into one robust approach! This approach allowed to develop exceptional solutions at a shorter time which in turn helped Levi9 customer to clinch the Award of Most Innovative IT Company 2011 in Netherlands.

Since this work represents first of its kind we'll be very pleased for your support and feedback!

Sincerely Yours - Nearshore Blog Team!

IT event in Netherlands not to be missed - Windows Azure Platform for success?

Levi9 Global Sourcing in conjunction with Microsoft Netherlands and Information Navigator to host a special event for Microsoft Windows Azure platform.

"Windows Azure platform for success?" is a key message of planned seminar and round table session to be held at Microsoft Netherlands facilities (Evert van de Beekstraat 354 1118 CZ Schiphol) on 10th of May 2011.

To register for seminar please visit our "Event page" or "Linkedin Events"

About Azure

Designed to support highly scalable and reliable applications, Windows Azure is Microsoft’s flagship cloud platform technology. Azure is ideal for developing and deploying high-performance applications, full-fledged web solutions and mission-critical systems.
Among the main benefits of Azure there are

  • Increased speed to value: accelerated development and deployment time by up to 70%
  • Lower costs: economies of scale through the shared use of cloud infrastructure
  • Improved Flexibility: scaling of computing and infrastructure resources exactly when it needed
  • Enhanced functionality: existing products can be expanded with cloud-based functionality or SaaS versions can be created
  • Modularity: consumption-based pricing and user-targeted functionality on demand

Levi9 - Your Guide to Cloud

Levi9, in close partnership with Microsoft and Information Navigator, one of the first in Netherlands started leveraging the Azure platform to help integrate cloud computing into hi-tech solutions and strategies.

Experienced specialists from the Microsoft, Information Navigator and Levi9 will present real-world experience building Cloud strategy to achieve desired business objectives.

Read more on the registration page.

KPMG Report - Ukraine New Emerging Outsourcing Destination

IT-BPO Scenario in the country

ICT, high-tech and consumer electronics are priority sectors of Ukraine’s national FDI
strategy. The ICT market has grown constantly during the last six years. Since 2000, Ukraine has become an attractive outosurcing destination in Eastern Europe providing software development services to clients in Western Europe and United States.

Today, Ukraine is the world’s fifth biggest IT services exporter and has the highest outsourcing market volume in Europe. The country’s IT sector demonstrates the fastest-growing rates and predicted to exceed 1 billion value in 2011.

The main outsourcing activity concentrated in the capital of Ukraine, Kiev and second-tier regional centers with population up to 1 million, such as Lviv, Kharkiv, Dnepropetrovsk, Donetsk, Odessa.

The respective KPMG IT Advisory Report, can be found here, gives an overview of the Ukrainian IT scenario and explores Lviv as an attractive ITO destination.

More information about the city of Lviv can be found in our special section EURO 2012 Journey by Ukrainian cities

Eastern Europe an Emerging Outsourcing Leader - a deep look!

Hot on the heels of the release of major information report for IT Outsourcing industry in Central and Eastern Europe, “CEE IT Outsouircing Overview 2010”, we start observing an increasing number of publications trumpeting “the emergence of new IT outsourcing leader”.

Eastern Europe is more often named by many as an emerging outsourcing hotspot which is going to challenge world’s premier outsourcing destinations, especially for knowledge-intensive and innovative R&D and software engineering work!

Is it really going to happen? and if yes, what preconditions for this?

In our new series “Eastern Europe an emerging IT outsourcing leader”, we’ll try to answer some of these and other not less important questions.

But let’s get some things clear at first!

Post #1 - Two Meanings of The One Name

I picked up this example as there is some confusion in differentiation between outsourcing destinations in general and IT outsourcing destinations in particular.

To clarify this I’d like to take example with “car” - as this word may have some imaginative similarities in this respect. The word car can be used to describe both a sedan and a big truck, when speaking of the car we can mean them both, right?

Well, in this case the question to these car owners - “can you help me to move my belongings to new flat?” will be differently considered. Same story with IT outsourcing, as in metaphorical comparison such outsourcing trucks as “India” and “China” can completely move company’s belongings while such sedans as East European countries can move some compact or fragile parts at a time.

Let’s expand this thought a bit more, let’s see the moving process in this way - the India truck can move everything, but in a bulky way making you feel a bit concerned over the road, while Eastern sedan taking just some parts gives you control. See it is more about specialization :)

That said, indeed, Central and Eastern Europe is an emerging destination for IT outsourcing, and have been considered so for the last decade. But the competition with BRIC countries is rather illusive and might be considered seriously only in selective yet very crucial areas of IT outsourcing umbrella.

What does it mean?

Eastern European has always been considered as destination of choice for complex, knowledge-intensive software engineering and R&D projects, requiring in-depth expertise and innovation.

With solid scientific legacy and strong technologically-oriented education system (with only 1% of world’s population Ukraine has 6% of the world’s scientists) Eastern Europe appeared as a perfect choice for desperately seeking technological brain Western hi-tech innovators.

Apart from one-stop-shop outsourcing destinations such as India and Philippines featuring high-level of English penetration and abundant talent pool of various types of trades Eastern Europe since the first day was associated with the word “technology and engineering”.

Thereby, the lion share of the portfolio of IT outsourcing services provided by companies from Eastern Europe mainly composed of services related to software engineering and product development, while India, Philippines and China’ IT offerings largely mixed with data processing & support related offerings such as data management, IT support, system administration and others.

Where it came from?

Having well-developed scientific research and space industries the Soviet Union needed an efficient and productive education system able to cope with the growing demand for engineering brain.

The popularity of engineering and scientific professions has been spread throughout then-occupied and allied Eastern countries, thousands of universities and faculties have been opened setting a mark for high-quality technical education.

Andre Geim 2010 Nobel Physics Prize winner about Soviet Union education - You cannot obtain such an education, not in Harvard nor in Cambridge, nowhere!

Subsequently, all that brought an incredible progress in electronics and technology science making Eastern Europe a viable resource for immigration resources of Western countries. Providing some statistics, there were millions of engineers, scientists and mathematicians migrating to the US and Europe, during and after the collapse of Soviet Union. Then Polish immigrants, made a huge contribution to the UK labor market after joining to EU.

Thanks to cultural, historical and religious affinities, scientific and education potential immigrants from Eastern Europe saw a warm acceptance in their new whereabouts leading the innovation and technological advancement in United States and Europe. Several examples of this fact: Google with its founder Sergey Brin, two Nobel Prize Winners, physicists Andre Geim and Konstantin Novoselov and many others.

This fact not only spread the reputation of Eastern Europe as a mine of technological and scientific talent, but predetermined the whole course of the future industry. Eastern Europe’s colossal pool of engineers, scientists, mathematicians proved to be a magnet for foreign companies seeking technological brains.

After the collapse of Soviet Union in many member states rocket building facilities and scientific bases were re-qualified for providing commercial hi-tech services and products. Since early 1990s various organizations have been formed on the facilities of technical universities and scientific laboratories to provide assistance in complex R&D areas.

Back to 1991, the Swiss software innovators came to Ukraine for technological competence and signed what is known as the first outsourcing contract signed in Eastern Europe.

It was exactly the group of scientists from the Kiev Institute of Cybernetics, nowadays known as Levi9 Ukraine, which provided technological supervision for the development of large-scale object-oriented system which subsequently earned its owners TOP100 Manufacturing Software Firms Award.

What does it mean? - Part II. Innovation Outsourcing

Well, basically it means that although Eastern Europe is considered as a competitor to world’s top outsourcing clusters such as BRIC for the provision of whole range of IT outsourcing services this general competition term is rather illusive and argumentative.

There is a huge gap in terms of market revenue and labor pool between India, China and Eastern Europe, and even considering the stunning 23 percent growth rate for IT export in Eastern Europe its still far behind the so-called competitors’ indicators.

Another trend, however might be observed in the niche of software engineering and R&D areas as previously indicated 23 percent of growth mainly distributed between these to backbones of Eastern European IT export market, with countries such as Ukraine and Romania doubled their export of software development services.

Innovation outsourcing to Eastern Europe is booming and big internationals such as Siemens and Deutsche Telekom already gave a preference to Eastern European providers to source their innovation and knowledge-intensive activities.

In the next part we will discuss:

1. Factors that might influence alignment of forces in IT outsourcing:

The EU - US outsourcing race

Last year European Union outspent US for IT Outsourcing contracts for the first time benefiting Eastern Europe as a regional cluster for Western Europe.

Beginning of 2011 was marked by the quick start of US economy, while EU faced currency crisis and economic recession in its second-tier member countries. This may have a bearing on the spending figures.

Nearshoring Trend

Nearshoring is a main trend in today’s outsourcing arena. Similar time-zones, physical proximity and cultural affinity proved to be as important outsourcing drivers as cost-savings and technological competence.

Increased focus on vulnerability management as well as shift in outsourcing delivery preferences to nearshore and sameshore can help nearshoring destinations such as Eastern Europe to profit from nearshoring advantages in their specific clusters.

Egypt Crisis - will it change outsourcing landscape in the region?

A weeks-long unrest in Egypt has became a real crisis, which already been named by some as “the worst disaster since Iran’s revolution”. One of the country’s main industries - tourism has already felt consequences of this crisis as tourists planned their holidays in Egypt from around the world have been advised not to enter the country because of unrest and tense situation.

Direct competitors of Egypt's Red Sea coastline such as Turkey, Spain and others are getting benefits of busy beaches and flows of tourists as last have turned their back after several weeks of anti-government protests that forced president Hosni Mubarak to flee the country.

What about Outsourcing?

Some acclaimed experts already expressed their cautions with regards to perspectives of Egyptian outsourcing industry unless the situation stabilize soon. For the last several years Egypt’s outsourcing services industry demonstrated dynamic growth getting fame as a hotspot for global outsourcing.

In 2009, Egypt for the first time has joined joined Gartner's alphabetically-ranked annual list spelling out the world's top 30 leading locations for outsourcing services. One of the main treats of such a progress has been named Egypt’s government extensive support and liberalization of tax regime for ICT. Egypt received enormous support from the government, particularly in the ICT industry with a reported $2 billion investment in its telecommunications infrastructure.

This crisis might be a heavy blow to Egypt perception at the international outsourcing arena as despite its robust progress and high rankings, the country has a number of weaknesses among which most notorious - negative business perception.

An LSE Outsourcing Unit in its study “Beyond BRIC” noted that Egypt still suffers from a negative perception and a belief that it is a country regularly targeted by terrorists and government disputes.

From the history one might notice what role perception plays in such industry as IT outsourcing. As a perfect example India’s terrorist events and corruption scandals in 2008 which have irreversibly changed risk/rewards calculations in the whole outsourcing industry pushing India in its own outsourcing crisis.

Alignment of forces in the EMEA region

Egypt has been considered for years as a bridge between Europe, Middle East and Africa. The country has been competing with Morocco and East Europe for European clients, mainly from UK, France and Spain and was looking to expand its reach to Benelux market (Netherlands, Belgium and Luxembourg). The country has been positioning itself as a nearshore destination to Europe, following the growing nearshoring trend in the region and jumping on the bandwagon of Central and Eastern European cluster.

In its report “2009: The Year of Outsourcing Dangerously” the Black Book of Outsourcing included Egypt in the list of safe locations for operating with low downstream risk leaded by Central and Eastern Europe and Latin America, while the entire Africa region was recommended to be avoided.

However, the current crisis and its possible developments can have a detrimental effect on country’s outsourcing gains of past years. As in response to precarious conditions conservative and consensus-driven Europeans might not include Egypt in the list of preferable outsourcing destinations keeping short-sighted nearshore precedency.

Moreover, other emerging outsourcing hotspots such as Serbia, Romania, Ukraine and Belarus are on the track to grow their positions as leading locations for offshore/nearshore services placing a significant emphasis on IT and business process services providing a vehicle to their economic growth.

For Egypt there is everything still to play for and - we hope - its government will not forget lessons learned previously reacting in good faith and on reasonable grounds so to prevent disaster that will be remembered by next generations.

Nearshore Study. What defines the nearshore zone?

The aim of this paper is to analyze the changes occurred in IT outsourcing industry,
point out to the current and future trends and clarify belonging criteria of the co-called nearshore zone.

Quote from the study

"However, not only has the number of known nearshore sites have grown significantly over the last years, but the amount of advertising and promotion on behalf of country developers has skyrocketed.

From exotic to socially downtrodden areas, business dealmakers from around the globe compete for a slice of the billions dollar nearshore pie."

  • Shift in Delivery Preferences
  • Popular Trend
  • What defines the nearshore zone

Shift in Delivery Preferences

Nearshoring, often referred as Nearshore Outsourcing took a wild ride during last years. The global political, economical, social and security changes during last years have a substantial impact on outsourcing industry at the international level.

The realities of an unsafe world have fully overrun into outsourcing decisions. The challenging component of outsourcing governance has shifted to mitigating downstream risk by determining the best location choice for their organizational processes.

As the savings gap between India and other world locations sunk to less than ten percent the value proposition is now more tempered more by potential threats. Increased focus on vulnerability management as well as geographical proximity has made for a shift in delivery preferences towards nearshore and sameshore options.

The survey made by Black Book Research in 2009 indicates that Central and Eastern Europe along with Latin America are viewed as significantly less dangerous outsourcing locations for US and EU respectively that all major hubs of India and being marked as the top destinations for operating with lowest downstream risks in 2009-2010. According to research having centers nearshore and sameshore will be a major client priority during next years.

Nearshoring - The Growing Trend

This shift in delivery preferences allowed many destinations under the so-called
Nearshoring umbrella to profit from their geographical advantages in their specific
clusters based in North America, Europe and Asia.

However, not only has the number of known nearshore sites have grown significantly over the last years, but the amount of advertising and promotion on behalf of country developers has skyrocketed.

From exotic to socially downtrodden areas, business dealmakers from around the globe compete for a slice of the billions dollar nearshore pie.

While there are some proven nearshoring destinations such as Canada, Central and
Eastern Europe and Latin America that according to analysts represent a viable
alternative to offshore options for US and West European countries there are many
other locations that seems to follow the trend and claim to be nearshore locations as
well. So, what criteria can be used to define location as a nearshore?

What defines the nearshore zone?

Definitions vary as to what qualifies as a nearshore location. Duncan Aitchison
international managing director of TPI, does not get hung up on semantics, but claims that moving across a close country border without crossing an ocean is a good way to define a nearshore contract. But how close?

Tony Virdi, partner at outsourcing advisory firm Atos Consulting puts it at anywhere
within three and a half hours' flying time, meaning Canada, most European and Latin America destinations qualify. However, flight from New York to Mexico takes more than 5 hours, should it still be considered as a Nearshore?

In truth, nearshoring locations should sit along a spectrum of potential outsourcing sites. At one end sit the far offshore locations such as India and China, separated by both cultural and geographic distances while from other side will be onshore locations such as Ireland and some US cities.

Geographical factor however is not only one determining "nearshority" as there are
many other important aspects such as linguistic and cultural ties, common history,
similarity of education, directness of communication and visa relations.

All this factors should be carefully considered in order to determine the best location fit for an organization prior to start a comprehensive assessment of locations infrastructure, intellectual property and business protection, laws, regulations and labor potential.