Title: Novosibirsk October 2002
1Novosibirsk October 2002
Outsourcing to Scandinavia By Jens
Brinksten CEO, Technology Outsourcing Systems
2Agenda
- TOS Market Research
- Outsourcing today
- The Scandinavian market
- Outsourcing advantages / disadvantages
- What to outsource
- What Scandinavian firms look for when choosing
outsourcing partners - Key factors for success in the Scandinavian
market
3TOS Market Research
- Our study confirms that many companies experience
a lack of IT resources - lack of people with the necessary expertise in
specific areas - difficulties with holding on to the young people
who are easily bored with routine jobs (often a
turnover of people of 30 per year) - periodical work peaks and start up
- time-to-market
- Competencies include Microsoft software
(server), .NET, SAP, WAP-programming, C, Java,
XML, database etc.
4Outsourcing today
- The companies apply different strategies to
address the problem of lack of resources - outsourcing in-house (to other divisions, mostly
abroad) - outsourcing to Scandinavian consulting companies
- outsourcing offshore
- intensive headhunting and job campaigns
- using freelancers
5The Scandinavian Market
The major system integration firms in Scandinavia
are
- Compaq
- Accenture
- TietoEnator
Norway
Finland
Sweden
- Accenture
- CGEY
- WM-Data
- Adcorre
- IBM
- CSC
- Siemens CG
- CGEY
- WM-Data
Denmark
There are numbers of other players in the market,
but these are the one, we meet as competitors in
our work
6The Scandinavian Market
From where do we see offshore development firms
in the Scandinavian region?
- India
- Ukraine
- Russia
- Baltic
- Ireland
- Baltic
- India
- Russia
Norway
Finland
Sweden
- India
- Czech Rep.
- Baltic
- Ukraine
- Russia
- Philippines
- India
- Hungary
- Baltic
- Russia
- Ukraine
Denmark
7Outsourcing - advantages
- The attitude to outsourcing is generally
positive, although it is recognised that there
are some problems involved in this. The main
advantages are - Solving a capacity problem in a quick and low
cost manner (compared to hiring people) - Solving a competence/knowledge situation
- No hiring of ad hoc staff
- Flexibility in production and delivery
8Outsourcing disadvantages - I
- The main disadvantages are
- Lack of long term internal knowledge
- Lack of building up competences
- Quality control and documentation
- Time-consuming project management
- In some companies (SMEs), it is often required to
have competencies in-house also especially when
the outsourced projects are of smaller size
9Outsourcing disadvantages - II
- The main disadvantages of outsourcing abroad are
(besides those mentioned) - Different language (communication in general)
- Different culture and political system
- Lack of trust and security
- Lack of control
- Not secured by European/local law
- Close management of the outsourced project is
required
10What to outsource
- IT projects most needed for outsourcing are
- Standard software programming
- Database programming
- Internet and e-commerce programming (server and
networks) - WAP-applications
- Projects for which the necessary competences /
knowledge is lacking - Routine jobs in developmental projects
11Outsourcing Partner
- What Scandinavian firms look for when choosing
outsourcing partners - A local representative in their own country
(local contracts) - Managements models and structured project
methodology - Security and reliability
- Flexible and scalable resources
- Fast turn-around times
- Local or international references
- Price (quality to price)
12Key factors for success
- If a Russian company wants to have success in the
Scandinavian market, they need to have some key
factors in place - A local legal entity as representative
- Local marketing and success stories
- Local project management
- Strong project management tools
- Strong communications skills
- Delivery and quality assurance
- Support and service functions
- Quality to price
13Russian firms already have.
- Most medium and large size Russian IT outsourcing
firms have - Some of the best trained IT specialists and
architects. Because of the emphasis on
mathematical and logical thinking, they can solve
complex problems, rather than just write code - In addition, Russian programmers have
traditionally dealt with limited computing
resources by developing more efficient, elegant
programs. - Flexible and scalable resources
- Many US and European references
- Quality to price (attractive price level)
14Russian firms needs to. I
- To make themselves more attractive, the Russian
IT firms have to - Change their approach from an engineer driven
approach/profile, to a more marketing driven
approach - Become more active in alliances and partnerships
- Use more time on profiling efforts, such as
articles in the International Press and media - Use the industry organisations more because
standing together makes you much stronger
15Russian firms needs to. II
- Furthermore the firms need to
- Emphasize service level, guarantees and data
security - Improve communication skills
- TRUST
- Improve the approach to foreign firms we are
not blood- - suckers, who just want to buy
- cheap labour and then sell it
- in the west with high profit!
16Why are we here..
- We are looking for long-term relations and
partnerships with companies in Russia - We want to have close co-operation, and to
understand you and your firms! - In Denmark we have a phrase saying
- A sound business practice is a
- business where both parties feel
- they gained from the business
17SPASIBO
- Technology Outsourcing Systems
- H.J. Holst Vej 3-5C
- DK-2605 Broendby
- Denmark
- Phone 45 7027 1620
- Fax 45 7027 1621
- E-mail office_at_techoutsys.com