How CIOs bring focus to their sourcing policy
Fueled by business changes and changes in IT, application portfolios have become increasingly heterogeneous. A growing demand from the business and a decrease of supply in the IT labor market pose new challenges to the CIO. Now that external sourcing options for application services are maturing, a growing number of organizations take a more structured approach to application sourcing. Boldly outsourcing the entire application services portfolio; or ad-hoc solutions like hiring more external contractors, seldom provide a sustainable and satisfactory solution. Contrary to infrastructure, application portfolios tend to benefit from a more differentiated sourcing approach. It is time for the CIO to make strategic choices regarding the application portfolio and bring focus to the sourcing policy.
CIO, an innovator?
With new technologies redefining the way we do business, one might expect
the CIO and the IT function to play a leading role in business innovation.
However, our survey results indicate that they are not.
Moreover, the future role of the IT function is under threat. An
Economist Intelligence Unit report2showed that over a third of CIOs
agree with the statement that within five years standalone IT departments
will have ceased to exist. One of the reasons for this is that a new
generation of IT-literate business staff and managers is now able to
exploit new technologies and market services to innovate without the help
of in-house IT professionals.
the CIO and the IT function to play a leading role in business innovation.
However, our survey results indicate that they are not.
Moreover, the future role of the IT function is under threat. An
Economist Intelligence Unit report2showed that over a third of CIOs
agree with the statement that within five years standalone IT departments
will have ceased to exist. One of the reasons for this is that a new
generation of IT-literate business staff and managers is now able to
exploit new technologies and market services to innovate without the help
of in-house IT professionals.
India verliest glans
Naarmate de kosten van het werk in India toeneemt en de waarde van de dollar daalt, wordt het steeds minder interessant om werk uit te besteden in India.
BusinessWeek wijst er op dat het Mexicaanse Softtek, leverancier van it-diensten, vorig jaar 30 nieuwe klanten wist bij te schrijven, waarvan de meeste outsourcingscontracten met Indiase bedrijven hadden voor delen van hun IT. India raakt een beetje uit de gratie door een groot verloop onder het personeel en de lastige communicatie. Voor Amerikaanse bedrijven komt daar ook nog eens de alsmaar dalende dollar bij, die ten opzichte van de Indiase roepie in de afgelopen vijf jaar 16 procent minder waard is geworden. Daarnaast is het onroerend goed duurder geworden en worden er hogere belastingen verwacht. Was in het verleden in India nog een winst te boeken van 40 tot 50 procent, nu dreigt dat te slinken naar 10 tot 20 procent. Dat zijn trends waardoor bedrijven geneigd zijn het dichter bij huis te zoeken, in ieder geval in een nabije tijdzone. Voor bedrijven in de VS worden daarmee de Latijns-Amerikaanse landen interessanter, zoals Mexico en Argentinië.
BusinessWeek wijst er op dat het Mexicaanse Softtek, leverancier van it-diensten, vorig jaar 30 nieuwe klanten wist bij te schrijven, waarvan de meeste outsourcingscontracten met Indiase bedrijven hadden voor delen van hun IT. India raakt een beetje uit de gratie door een groot verloop onder het personeel en de lastige communicatie. Voor Amerikaanse bedrijven komt daar ook nog eens de alsmaar dalende dollar bij, die ten opzichte van de Indiase roepie in de afgelopen vijf jaar 16 procent minder waard is geworden. Daarnaast is het onroerend goed duurder geworden en worden er hogere belastingen verwacht. Was in het verleden in India nog een winst te boeken van 40 tot 50 procent, nu dreigt dat te slinken naar 10 tot 20 procent. Dat zijn trends waardoor bedrijven geneigd zijn het dichter bij huis te zoeken, in ieder geval in een nabije tijdzone. Voor bedrijven in de VS worden daarmee de Latijns-Amerikaanse landen interessanter, zoals Mexico en Argentinië.
The Coming Death Of Indian Outsourcing
Information technology and IT-enabled services will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India's foreign-exchange inflows, according to Nasscom, an Indian IT industry organization.
The death of this industry is far from anyone’s mind.
However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.
The death of this industry is far from anyone’s mind.
However, the reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.
Shell discovers nearshoring (Dutch)
Offshoring smeert ict-motor Shell
Shell schrapt een deel van zijn ict-activiteiten en besteedt een ander deel uit aan Oost-Europa. Deze stap is onderdeel van een jarenlange offshoring-trend binnen het concern.
Shell schrapt een deel van zijn ict-activiteiten en besteedt een ander deel uit aan Oost-Europa. Deze stap is onderdeel van een jarenlange offshoring-trend binnen het concern.
Access to knowledge is the main reason for outsourcing
Het verbeteren van de ict-dienstverlening en de toegang tot expertise zijn de belangrijkste redenen voor het uitbesteden van ict-beheer. Financiële aspecten als kostenreductie en het vergroten van de opbrengst, blijkt volgens recent onderzoek veel minder van belang.
Churn amongst top IT staff at record levels, warns Harvey Nash
The strategic influence of Chief Information Officers (CIOs) is on the decline as churn within the sector hits new heights The annual survey of over 650 UK CIOs and senior technology professionals revealed that one in ten (10%) felt their role was becoming less strategic and over half (58%) expect to have moved jobs in the next two years.
The survey revealed that roughly half (46%) of CIOs are on the board, and only a third (35%) report direct to the CEO. Belief in the strategic value of IT has dropped year-on-year - only 61% of respondents thought the role of the CIO was becoming more strategic, down 15% on last year.
This drop in confidence is shared by board-level peers with half of CFOs (47%) viewing IT solely as a support function with no need for board representation. A perceived failure to deliver on innovation is to blame - 65% of businesses have no structured approach to IT innovation and, when they do innovate, the majority (78%) reported only reasonable or limited success.
The survey revealed that roughly half (46%) of CIOs are on the board, and only a third (35%) report direct to the CEO. Belief in the strategic value of IT has dropped year-on-year - only 61% of respondents thought the role of the CIO was becoming more strategic, down 15% on last year.
This drop in confidence is shared by board-level peers with half of CFOs (47%) viewing IT solely as a support function with no need for board representation. A perceived failure to deliver on innovation is to blame - 65% of businesses have no structured approach to IT innovation and, when they do innovate, the majority (78%) reported only reasonable or limited success.
The two main reasons for outsourcing are? (dutch)
Niet kostenreductie, maar een gegarandeerde antwoordtijd is voor een groot deel van de ict-managers in Groot-Brittannië de reden om de ict uit te besteden.
De tweede reden die de it-directeuren noemden was dat het ict-team dat nog binnenshuis zat, zich nu kon concentreren op grotere strategische zaken. Dat werd door 30 procent van de ondervraagden genoemd. Vooral it-managers die werkzaam waren bij een bedrijf met 51 tot 250 werknemers zag dit als het grootste voordeel.
De tweede reden die de it-directeuren noemden was dat het ict-team dat nog binnenshuis zat, zich nu kon concentreren op grotere strategische zaken. Dat werd door 30 procent van de ondervraagden genoemd. Vooral it-managers die werkzaam waren bij een bedrijf met 51 tot 250 werknemers zag dit als het grootste voordeel.
Computable: Geld niet meer belangrijkste reden voor uitbesteding
"Niet kostenreductie, maar een gegarandeerde antwoordtijd is voor een groot deel van de ict-managers in Groot-Brittannië de reden om de ict uit te besteden."
lees het artikel.
lees het artikel.
Zonder beta s hebben we geen toekomst
Zonder bèta’s hebben we geen toekomst
Na jaren van teruggang trekken de aanmeldingen voor bètastudies enigszins aan, maar de problemen blijven groot. Bewijsstuk één: van de 1.500 jong afgestudeerden die Shell vorig jaar heeft aangenomen, kwam tien procent van Nederlandse universiteiten; vroeger was dat circa 30 procent.
Na jaren van teruggang trekken de aanmeldingen voor bètastudies enigszins aan, maar de problemen blijven groot. Bewijsstuk één: van de 1.500 jong afgestudeerden die Shell vorig jaar heeft aangenomen, kwam tien procent van Nederlandse universiteiten; vroeger was dat circa 30 procent.
Private Equity firms turn to global sourcing for returns
Private equity firms are increasingly turning towards global sourcing a a tool to drive additional returns from their portofolio companies. Apart form simple cost reduction, global sourcing helps to streamline the operation model without putting undue strains on cash flows. The enterprise value created by global sourcing is several fold of that of the specific project savings.
Nearshoring prefered over farshore
Nearshore outsourcing bevalt beter dan outsouring bij een locale dienstverlener. Far shoring draait meestal uit op een teleurstelling. Dat blijkt uit het jaarlijks onderzoek van de Brown-Wilson Group.
Nearshore market, what is it about
The market for nearshoring is growing quite rapidly. The driving forces are the medium sized companies. India is a bridge too far and Eastern Europe seems to be the solution. Article written by Frank de Vries (Quint) and Bernhard van Oranje (Levi9)
http://www.quint.nl/templates/mercury.asp?page_id=1822&item=185 (Dutch)
http://www.quint.nl/templates/mercury.asp?page_id=1822&item=185 (Dutch)
Demand in Dutch IT markt is reaching a peak
Ernst & Young: ICT Barometer: Grootste vraag naar externe ICT'ers ooit
Amsterdam, 31 mei 2007 - De vraag naar externe ICT'ers in Nederland heeft een absoluut hoogtepunt bereikt. Dat blijkt uit de tweemaandelijkse ICT Barometer van Ernst & Young, waarvoor 607 directeuren, managers en professionals uit het bedrijfsleven en overheid zijn ondervraagd
Amsterdam, 31 mei 2007 - De vraag naar externe ICT'ers in Nederland heeft een absoluut hoogtepunt bereikt. Dat blijkt uit de tweemaandelijkse ICT Barometer van Ernst & Young, waarvoor 607 directeuren, managers en professionals uit het bedrijfsleven en overheid zijn ondervraagd
Nearshore-landen domineren in programmeerwedstrijd
Bij een programmeerwedstrijd voor studententeams van de Association for Computing Machinery veroverden Oost-Europese universiteiten vijf van de tien topposities.
bron ag
bron ag
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.
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