Offshore Application Services in Russia and CEE

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Offshore Application Services in Russia and CEE

• Barry Mason RubensteinSenior AnalystApplication
  Outsourcing Offshore Services

A Behind the Scenes Look at Its Expanding
Presence and Need for Greater Strategic Role
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Agenda

• Definitions and Market Evolution
• Customer Needs and Challenges
• Russia as a Destination for IT Services
• Future Outlook
• Essential Guidance

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Defining Offshore Outsourcing
Term
Definition
Alternatives
Delivered by
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The U.S. Market for Offshore IT Services
IDC Worldwide Offshore IT Services Forecast (IDC
33529, July 2005)
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Where Does the U.S. Import From?
IDC Worldwide Offshore IT Services Forecast (IDC
33529, July 2005)
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Why Offshore?
2005 IDC Offshore Services Survey, N 1062
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Cost Savings Expectations
Q What is your expected cost savings when using
offshore IT services?
2005 IDC Offshore Services Survey, N 764
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Customer Preferences for IT Services Offshore
All About the Apps
Q Of the services your company plans to procure
from offshore, please choose the top 3.
IDC Services Spending Intentions/Leading
Indicators Survey, Q3 2004, N 100
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Importance of Industry Expertise
Q What is the importance of vertical expertise
in providing offshore services?
2005 IDC Offshore Services Survey, N 764
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Customer Concerns
Q What factors did you consider the highest risk
when going offshore?
U.S. Customer Experiences and Best Practices When
Going Offshore (IDC 31179, May 2004) N 30
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Difficulty Adjusting
Q What were the most difficult adjustments your
organization had to make in order to be
successful offshore?
U.S. Customer Experiences and Best Practices When
Going Offshore (IDC 31179, May 2004) N 30
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Some Pitfalls and Issues
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Russian Companies and Their Services How They
Stack Up

• What you can get from Russia and CEE
• Custom application development
• Application maintenance/enhancements/support
• EAI and Package Implementation (Oracle, SAP,
  Siebel, PeopleSoft, Microsoft)
• Application testing
• Application modernization/re-engineering
• Software product development/RD/engineering
• Dedicated development centers/BOT centers

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Why Russia and CEE?

• Access to talented, low-cost workforce strong
  engineering and scientific workforce
• Greater economic and political stability with EU
  accession
• Continued telecoms and infrastructure investment
• Multilingual skills
• Gateway to Eastern and Western Europe
• More stable labor market than India (less
  jumping around)
• Access to emerging markets with new cost basis
• High quality (CMMi certified) development
  organizations
• Diverse technology skillsets (.NET, J2EE, SOA,
  Oracle, SAP, Microsoft, Siebel, etc)

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Future Outlook New Delivery Models

• Current offshore model is focused on cost
  savings and is highly labor intensive
• Is offshore merely a stopgap or a permanent part
  of the services delivery model?
• Offshore can be used for self-funded
  transformation
• Offshore is a critical component of any sourcing
  strategy
• Onsite
• Onshore
• Nearshore
• Offshore
• Keep an eye on new technologies that can
  supplement and exceed cost savings from offshore

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Essential Guidance
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Questions?
Please email me at brubenstein_at_idc.com