China's looming talent shortage
China could emerge as a base for IT and business process offshoring, but unless the country addresses its looming labor shortage now the global ambitions of Chinese companies will probably be stymied. Source McKinsey
The overlooked potential for outsourcing in Eastern Europe
Eastern Europe is a small player in the global market for IT and business process outsourcing, but that's likely to change as companies in Western Europe become more comfortable with offshoring.
Service providers in Eastern Europe offer geographic proximity combined with cultural and language affinities that Western European companies can't easily find further afield.
The region is likely to remain competitive, given its low level of wage inflation (outside of popular centers like Prague and Budapest), along with thousands of qualified graduates entering the marketplace each year.
As Eastern European service providers develop their capabilities, they should capture a larger share of the market for IT and business process services. source McKinsey
Service providers in Eastern Europe offer geographic proximity combined with cultural and language affinities that Western European companies can't easily find further afield.
The region is likely to remain competitive, given its low level of wage inflation (outside of popular centers like Prague and Budapest), along with thousands of qualified graduates entering the marketplace each year.
As Eastern European service providers develop their capabilities, they should capture a larger share of the market for IT and business process services. source McKinsey
Eastern Europe: Outsourcing hot spot?
ZDNet Tags: Europe, Outsourcing, Offshoring,
Eastern Europe could soon become a favorite location for offshore outsourcing, with activity in the region estimated to triple between 2005 and 2008. That's according to consulting firm McKinsey, which predicts that the business process outsourcing (BPO) industry will support 130,000 jobs in the region by 2008.
Eastern Europe could soon become a favorite location for offshore outsourcing, with activity in the region estimated to triple between 2005 and 2008. That's according to consulting firm McKinsey, which predicts that the business process outsourcing (BPO) industry will support 130,000 jobs in the region by 2008.
The next Google will come out of Eastern Europe
(BusinessWeek) Skype Technologies' (EBAY ) brash European founders, Niklas Zennström and Janus Friius, had no product in 2003 when they pitched their business plan to Luxembourg venture fund Mangrove Capital Partners. Their idea was to attack a complacent global telecom industry with an ad-based service that offered free phone calls over the Internet--a plan that 20 venture capital groups already had rejected....
....Mangrove is also betting some of the biggest Net hits will come out of Eastern and Central Europe, where engineering and mathematical skills run deep. "We see Eastern European entrepreneurs as more fervently capitalist than Western Europeans," says Lopez....
>> read the whole article
....Mangrove is also betting some of the biggest Net hits will come out of Eastern and Central Europe, where engineering and mathematical skills run deep. "We see Eastern European entrepreneurs as more fervently capitalist than Western Europeans," says Lopez....
>> read the whole article
Bill Gates says West not supplying enough IT talent
MOSCOW (Reuters) - A shortage of information technology graduates from Western universities is leading companies to call on developing countries to meet research demand, Microsoft chairman Bill Gates said on Tuesday.
After the break-up of the Soviet Union, Russia's internationally renowned education system became a cheap talent pool for the West. Now dozens of Russian language Web sites offer computer programming jobs in the United States, alongside visa support and language training.
"Worldwide, a lot of the developed countries are not graduating as many IT students as they were in the past, which is kind of ironic as it does mean it does increase the opportunities," Gates said.
Many Western firms have also outsourced data management, software development and other high tech operations to lower cost operators in Asia, where education standards are high in some countries but wages are still comparatively low.
"There is a shortage of IT skills on a worldwide basis. Anybody who can get those skills here now will have a lot of opportunity," Gates said.
After the break-up of the Soviet Union, Russia's internationally renowned education system became a cheap talent pool for the West. Now dozens of Russian language Web sites offer computer programming jobs in the United States, alongside visa support and language training.
"Worldwide, a lot of the developed countries are not graduating as many IT students as they were in the past, which is kind of ironic as it does mean it does increase the opportunities," Gates said.
Many Western firms have also outsourced data management, software development and other high tech operations to lower cost operators in Asia, where education standards are high in some countries but wages are still comparatively low.
"There is a shortage of IT skills on a worldwide basis. Anybody who can get those skills here now will have a lot of opportunity," Gates said.
Outsourcing and innovation 2006: a happy couple?
Key Findings from the report of Quint
IT Outsourcing has become a mature market with a strong growth in application outsourcing.
A more selective sourcing strategy is on the rise in the Benelux market.
Over 75% of the respondents still focus on cost reduction and control as their main outsourcing goal.
IT Outsourcing has become a mature market with a strong growth in application outsourcing.
A more selective sourcing strategy is on the rise in the Benelux market.
Over 75% of the respondents still focus on cost reduction and control as their main outsourcing goal.
the future of outsourcing
As far as Daniel Marovitz (Deutsche Bank) is concerned, offshore outsourcing no longer a cost-cutting option for the world's biggest financial institutions. Nor is it even a source of competitive advantage. "The issue is that if you don't do it, you won't survive," says Marovitz >. Read more in the Businessweek.
Bucharest rivals Bangalore
...Language skills and low wages are only part of the appeal, though. IT executives rave about the topnotch training and problem-solving prowess of Romanian computer specialists. Student teams from Romanian universities routinely take first place in global software-development contests sponsored by Microsoft (MSFT ) and Oracle.
"If you want 5,000 people doing coding, India is a better choice." But for more advanced research and development, "it's better in Romania," says Eugen Schwab-Chesaru, who heads the local office of Pierre Audoin Consultants, which has helped broker several multinational investments, including the recent Adecco deal...
read the article
The article is published at BusinessWeek Online.
"If you want 5,000 people doing coding, India is a better choice." But for more advanced research and development, "it's better in Romania," says Eugen Schwab-Chesaru, who heads the local office of Pierre Audoin Consultants, which has helped broker several multinational investments, including the recent Adecco deal...
read the article
The article is published at BusinessWeek Online.
Cultural differences cause offshoring problems
Two-thirds of execs say it's the main reason deals run into trouble…
Source: Silicon.com By Andy McCue
Published: Monday 17 July 2006
Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to new research.
In an Accenture study, two-thirds of 200 US business executives said that miscommunication arising from cultural differences has caused problems when outsourcing offshore.
Different communication styles was identified as the key factor causing problems between onshore and offshore workers by over three-quarters (76 per cent) of the managers questioned.
Different approaches to completing tasks, different attitudes toward conflict and different decision-making styles were cited as the other main cultural factors that frequently cause upsets when managing an offshore outsourcing relationship.
Kris Wadia, senior executive in Accenture’s network of global delivery centres, said that the physical obstacles to offshore outsourcing such as telecoms and facilities have largely been resolved.
He said in a statement: "However, the soft issues, particularly cross-cultural communication, will continue to present the main challenges to realising global sourcing's full potential for the foreseeable future."
Over half of National Outsourcing Association (NOA) members surveyed recently also said cultural differences are still an issue in offshore outsourcing deals.
At a NOA event last week David Skinner, partner at law firm Morrison & Foerster, said this is particularly true in multi-sourcing where the client is often dealing with many managers from different suppliers in different countries.
He said: "It is one of the biggest multi-sourcing issues. You have got to manage the cultural differences."
Source: Silicon.com By Andy McCue
Published: Monday 17 July 2006
Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to new research.
In an Accenture study, two-thirds of 200 US business executives said that miscommunication arising from cultural differences has caused problems when outsourcing offshore.
Different communication styles was identified as the key factor causing problems between onshore and offshore workers by over three-quarters (76 per cent) of the managers questioned.
Different approaches to completing tasks, different attitudes toward conflict and different decision-making styles were cited as the other main cultural factors that frequently cause upsets when managing an offshore outsourcing relationship.
Kris Wadia, senior executive in Accenture’s network of global delivery centres, said that the physical obstacles to offshore outsourcing such as telecoms and facilities have largely been resolved.
He said in a statement: "However, the soft issues, particularly cross-cultural communication, will continue to present the main challenges to realising global sourcing's full potential for the foreseeable future."
Over half of National Outsourcing Association (NOA) members surveyed recently also said cultural differences are still an issue in offshore outsourcing deals.
At a NOA event last week David Skinner, partner at law firm Morrison & Foerster, said this is particularly true in multi-sourcing where the client is often dealing with many managers from different suppliers in different countries.
He said: "It is one of the biggest multi-sourcing issues. You have got to manage the cultural differences."
India: Why Apple Walked Away
"India isn't as inexpensive as it used to be," the source says. "The turnover is high, and the competition for good people is strong." Apple feels it "can do [such work] more efficiently elsewhere."
Read the complete article
Read the complete article
Top 10
It's an older articel but still quite valid. The top 10 of things that you need to think of when going offshore
Read complete article
Read complete article
Nearshoring: Looking closer to home
Companies looking for savings but worried about the risks and cultural barriers involved in offshore outsourcing could benefit from nearshoring. Danny Bradbury investigates the pros and cons
Read article in Computerweekly
Read article in Computerweekly
Progress and Levi9
Levi9 Global Sourcing has opened their Progress centre of excellence in Bucharest.
The centre has been set up with training and quality assurance of Progress (NL).
Read article in ComputerPartner
The centre has been set up with training and quality assurance of Progress (NL).
Read article in ComputerPartner
Globalization and Offshoring of Software
Conclusion of research by the he Association for Computing Machinery (ACM)
Globalization of, and offshoring within, the software industry will continue and, in fact, increase. This increase will be fueled by information technology itself as well as government action and economic factors and will result in more global competition in both lower-end software skills and higher-end endeavors such as research. Current data and economic theory suggest that despite offshoring, career opportunities in IT will remain strong in the countries where they have been strong in the past even as they grow in the countries that are targets of offshoring. The future, however, is one in which the individual will be situated in a more global competition. The brightness of the future for individuals, companies, or countries is centered on their ability to invest in building the foundations that foster innovation and invention.
Read complete article
Globalization of, and offshoring within, the software industry will continue and, in fact, increase. This increase will be fueled by information technology itself as well as government action and economic factors and will result in more global competition in both lower-end software skills and higher-end endeavors such as research. Current data and economic theory suggest that despite offshoring, career opportunities in IT will remain strong in the countries where they have been strong in the past even as they grow in the countries that are targets of offshoring. The future, however, is one in which the individual will be situated in a more global competition. The brightness of the future for individuals, companies, or countries is centered on their ability to invest in building the foundations that foster innovation and invention.
Read complete article
Levi9 and Compuware on BNR
Listen to the podcast about nearshore development on the Balkan and the partnership between Compuware and Levi9 Global Sourcing.
What the doctor ordered, the Nearshore Hybrid model
by Jim Diorio, a partner at Venice Consulting Group.
One of the biggest ways to mitigate risk is to have a local team. A better way is to have a team of experienced, seasoned, senior professionals who facilitate all of the application design and management, and then ensure that any work done nearshore is done properly.
This is the heart of the new nearshore hybrid model. Local, US-based, senior consultants can directly interface with the client and address all requirement gathering, analysis, design and project management. This same team then manages a nearshore team at substantial cost savings to the client. The result is the cost benefit of going nearshore without the headaches seen with offshore projects --the process is typically completely transparent. Finding consultants who have been successfully delivering on this model for many years and have a proven track record of satisfied clients is critical. For many companies, the nearshore hybrid model may be just what the doctor ordered. Go to complete article.
The hybrid model is exactly what Levi9 Global Sourcing is offering to our European clients.
One of the biggest ways to mitigate risk is to have a local team. A better way is to have a team of experienced, seasoned, senior professionals who facilitate all of the application design and management, and then ensure that any work done nearshore is done properly.
This is the heart of the new nearshore hybrid model. Local, US-based, senior consultants can directly interface with the client and address all requirement gathering, analysis, design and project management. This same team then manages a nearshore team at substantial cost savings to the client. The result is the cost benefit of going nearshore without the headaches seen with offshore projects --the process is typically completely transparent. Finding consultants who have been successfully delivering on this model for many years and have a proven track record of satisfied clients is critical. For many companies, the nearshore hybrid model may be just what the doctor ordered. Go to complete article.
The hybrid model is exactly what Levi9 Global Sourcing is offering to our European clients.
Emerce estafette kolom
Onderwerp: Na de uittocht van productiebanen naar China lijkt nu de diensten sector aan de beurt. Is dat reden voor paniek?
Onze economie heeft al vele industrieën zien veranderen waarbij een gedeeltelijke of gehele verdwijning van de productie heeft plaats gevonden. Wat nieuw is dat de offshoring en outsourcing naar lage lonen landen nu ook in dienstensector plaats vind waaronder de IT sector. Er zijn een aantal redenen waarom dat dit nu past gebeurt. De sector wordt professioneler, het besef dat bezuinigingen in de IT goed mogelijk zijn neemt toe en er is een gebrek aan goede programmeurs in Nederland. Wat ook mee speelt is de trend om je te focussen op de kern activiteiten van je bedrijf en de rest te willen outsourcen.
Het is zo’n 15 jaar geleden begonnen in de VS die India ontdekt hebben als pool van IT talent voor lage loonkosten. In India zijn er inmiddels facilitaire bedrijven zoals Wipro die bezig houden met offshoring en outsourcing die over de 40.000 mensen in dienst hebben en nog steeds met 1.000 man per maand groeien. Dat zijn meer mensen dan Ordina, Cap Gemini en Getronics/Pink Roccade gezamenlijk in Nederland aan het werk hebben. Vanuit Europa zie je dat de Balkan erg in trek raakt om de IT diensten gedeeltelijk te outsourcen. Daar zijn de loonkosten ook laag, is veel IT talent, weinig cultuur verschilllen en is goed bereikbaar.
De verschuivingen van werkzaamheden biedt veel kansen zowel voor ondernemers als werknemers. Immers een Java programmeur moet zich specialiseren, hij moet zich verder scholen wil hij nog een goede kans hebben op een job in Nederland. Dat is natuurlijk lastig, want je bent gedwongen te investeren in jezelf, maar het is ook goed, want je wordt meer waard, je gaat meer verdienen en je gaat interessanter werk doen. Als je een parallel naar de textiel sector zou trekken dan zie je dat de Koninklijke Ten Cate die vroeger 90% productiemedewerkers hadden die bij wijze van spreken allen standaard dekens maakten terwijl zij nu bezig zijn met o.a. kogelvrije vesten en een soort netten of dekens die de delta werken ondersteunen. Dat is en meer toegevoegde waarde en dus meer loon, en misschien wel belangrijker veel boeiender werk dan een dikke wollen deken.
Moraal: niet tegenwerken, maar juist omarmen. Degene die het meest
agressief aan de slag gaat met deze nieuwe realiteit zal er sterker uitkomen. Het is niets nieuws, sinds de industriële revolutie is dit continu aan de gang. Nederland is altijd een zeer adaptief land geweest met hoog opgeleiden mensen die hun talen kennen, kortom wij moeten hier juist van kunnen profiteren door hier de lead in te nemen.
Bernhard van Oranje
Onze economie heeft al vele industrieën zien veranderen waarbij een gedeeltelijke of gehele verdwijning van de productie heeft plaats gevonden. Wat nieuw is dat de offshoring en outsourcing naar lage lonen landen nu ook in dienstensector plaats vind waaronder de IT sector. Er zijn een aantal redenen waarom dat dit nu past gebeurt. De sector wordt professioneler, het besef dat bezuinigingen in de IT goed mogelijk zijn neemt toe en er is een gebrek aan goede programmeurs in Nederland. Wat ook mee speelt is de trend om je te focussen op de kern activiteiten van je bedrijf en de rest te willen outsourcen.
Het is zo’n 15 jaar geleden begonnen in de VS die India ontdekt hebben als pool van IT talent voor lage loonkosten. In India zijn er inmiddels facilitaire bedrijven zoals Wipro die bezig houden met offshoring en outsourcing die over de 40.000 mensen in dienst hebben en nog steeds met 1.000 man per maand groeien. Dat zijn meer mensen dan Ordina, Cap Gemini en Getronics/Pink Roccade gezamenlijk in Nederland aan het werk hebben. Vanuit Europa zie je dat de Balkan erg in trek raakt om de IT diensten gedeeltelijk te outsourcen. Daar zijn de loonkosten ook laag, is veel IT talent, weinig cultuur verschilllen en is goed bereikbaar.
De verschuivingen van werkzaamheden biedt veel kansen zowel voor ondernemers als werknemers. Immers een Java programmeur moet zich specialiseren, hij moet zich verder scholen wil hij nog een goede kans hebben op een job in Nederland. Dat is natuurlijk lastig, want je bent gedwongen te investeren in jezelf, maar het is ook goed, want je wordt meer waard, je gaat meer verdienen en je gaat interessanter werk doen. Als je een parallel naar de textiel sector zou trekken dan zie je dat de Koninklijke Ten Cate die vroeger 90% productiemedewerkers hadden die bij wijze van spreken allen standaard dekens maakten terwijl zij nu bezig zijn met o.a. kogelvrije vesten en een soort netten of dekens die de delta werken ondersteunen. Dat is en meer toegevoegde waarde en dus meer loon, en misschien wel belangrijker veel boeiender werk dan een dikke wollen deken.
Moraal: niet tegenwerken, maar juist omarmen. Degene die het meest
agressief aan de slag gaat met deze nieuwe realiteit zal er sterker uitkomen. Het is niets nieuws, sinds de industriële revolutie is dit continu aan de gang. Nederland is altijd een zeer adaptief land geweest met hoog opgeleiden mensen die hun talen kennen, kortom wij moeten hier juist van kunnen profiteren door hier de lead in te nemen.
Bernhard van Oranje
India under pressure
Ensuring India’s Offshoring Future
By Mckinsey
Clouds are gathering on the offshore horizon. Research by the McKinsey Global Institute (MGI) shows that India's vast supply of graduates is smaller than it seems once their suitability for employment by multinational companies is considered. In the country's most popular offshoring locations, such as Bangalore, rising wages and high turnover among engineers— the professionals most in demand for IT services— provide evidence that local constraints on the supply of talent already exist. And just as these bottlenecks are developing, other low-wage countries, such as China, Hungary, and the Philippines, is gearing up to challenge India's lead.
By Mckinsey
Clouds are gathering on the offshore horizon. Research by the McKinsey Global Institute (MGI) shows that India's vast supply of graduates is smaller than it seems once their suitability for employment by multinational companies is considered. In the country's most popular offshoring locations, such as Bangalore, rising wages and high turnover among engineers— the professionals most in demand for IT services— provide evidence that local constraints on the supply of talent already exist. And just as these bottlenecks are developing, other low-wage countries, such as China, Hungary, and the Philippines, is gearing up to challenge India's lead.
NetDialog And Levi9 Partner To Make Virtual Software Development A Reality
"The pool of talented developers and designers in Eastern European countries such as Hungary and Serbia, coupled with the low-cost advantage of near-shore development centers are impossible to ignore." says Andrew Whalen, CTO NetDialog.
>> read the article
>> read the article
India is discovering the benefits of (Eastern) Europe -Dutch-
In India begint er een behoorlijke schaartste op de arbeidsmarkt te komen en tevens beginnen ze te beseffen dat Europese klanten misschien beter vanuit Oost-Europa kunnen worden bediend.
Quote's uit de automatiseringsgids.
India komt met ‘nearshore’ naar Europa
Tata en Satyam startte afgelopen jaren ontwikkelcentra in Hongarije en breiden daar nu snel uit
De Indiase softwaregigant Tata gaat zijn Europese ‘software-ontwikkelingscentrum’ in Boedapest uitbreiden van 300 tot 1000 werknemers. Tata, één van de grootste IT-bedrijven ter wereld, zit sinds 2001 in Hongarije en biedt daar software-ontwikkeling en call center diensten voor de Europese markt aan. Die activiteit was vorig jaar goed voor 25 procent van
Lage salarissen
De keuze van Hongarije lag voor de hand vanwege de lagere salarissen. Centraal-Europa is weliswaar duurder dan India, waar een IT-specialist pakweg 10.000 dollar per jaar verdient. Maar het is nog steeds veel goedkoper dan West-Europa en er zijn volgens Mani voldoende hoogopgeleide werknemers te vinden.
Buiten de dataprotectie was er een tweede reden om in Hongarije te beginnen; de afstand. TCS is groot geworden dankzij de Amerikaanse en Europese klanten die ontdekten hoeveel goedkoper het was om software in India te laten ontwikkelen dan thuis. In een sector waar alles om datacommunicatie draait, lijkt fysieke afstand niet tot problemen te leiden. Maar de ervaring leert anders.
"Als je in Europa voet aan de grond wil krijgen, moet je de Europese talen spreken en de Europese cultuur kennen. Bovendien houden Europeanen graag contact. Met Amerikanen spreek je iets af en dan voer je het uit, maar Europeanen willen op de hoogte blijven hoe de zaken gaan. En dan wordt afstand, ook bij software ontwikkeling, belangrijk", aldus S.V. Mani, algemeen manager van Tata Boedapest.
Opleidingen
"Wij hebben zonder enig probleem mensen gevonden die uitstekend Duits, Nederlands, Engels, Frans of Spaans spraken." Personeel was volgens hem sowieso geen probleem. "Hongarije beschikt over voldoende uitstekend opgeleide mensen. Het enige probleem is het vinden van specialisten in de computertaal Siebel, die zijn hier niet veel te vinden. Daarvoor laten we mensen uit India komen."
Quote's uit de automatiseringsgids.
India komt met ‘nearshore’ naar Europa
Tata en Satyam startte afgelopen jaren ontwikkelcentra in Hongarije en breiden daar nu snel uit
De Indiase softwaregigant Tata gaat zijn Europese ‘software-ontwikkelingscentrum’ in Boedapest uitbreiden van 300 tot 1000 werknemers. Tata, één van de grootste IT-bedrijven ter wereld, zit sinds 2001 in Hongarije en biedt daar software-ontwikkeling en call center diensten voor de Europese markt aan. Die activiteit was vorig jaar goed voor 25 procent van
Lage salarissen
De keuze van Hongarije lag voor de hand vanwege de lagere salarissen. Centraal-Europa is weliswaar duurder dan India, waar een IT-specialist pakweg 10.000 dollar per jaar verdient. Maar het is nog steeds veel goedkoper dan West-Europa en er zijn volgens Mani voldoende hoogopgeleide werknemers te vinden.
Buiten de dataprotectie was er een tweede reden om in Hongarije te beginnen; de afstand. TCS is groot geworden dankzij de Amerikaanse en Europese klanten die ontdekten hoeveel goedkoper het was om software in India te laten ontwikkelen dan thuis. In een sector waar alles om datacommunicatie draait, lijkt fysieke afstand niet tot problemen te leiden. Maar de ervaring leert anders.
"Als je in Europa voet aan de grond wil krijgen, moet je de Europese talen spreken en de Europese cultuur kennen. Bovendien houden Europeanen graag contact. Met Amerikanen spreek je iets af en dan voer je het uit, maar Europeanen willen op de hoogte blijven hoe de zaken gaan. En dan wordt afstand, ook bij software ontwikkeling, belangrijk", aldus S.V. Mani, algemeen manager van Tata Boedapest.
Opleidingen
"Wij hebben zonder enig probleem mensen gevonden die uitstekend Duits, Nederlands, Engels, Frans of Spaans spraken." Personeel was volgens hem sowieso geen probleem. "Hongarije beschikt over voldoende uitstekend opgeleide mensen. Het enige probleem is het vinden van specialisten in de computertaal Siebel, die zijn hier niet veel te vinden. Daarvoor laten we mensen uit India komen."
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