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Novosibirsk October 2002

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No hiring of ad hoc staff. Flexibility in production and delivery ... Routine jobs in developmental projects. Outsourcing Partner ... – PowerPoint PPT presentation

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Title: Novosibirsk October 2002


1
Novosibirsk October 2002
Outsourcing to Scandinavia By Jens
Brinksten CEO, Technology Outsourcing Systems
2
Agenda
  • 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

3
TOS 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.

4
Outsourcing 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

5
The Scandinavian Market
The major system integration firms in Scandinavia
are
  • IBM
  • CSC
  • CGEY
  • 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
6
The 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
7
Outsourcing - 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

8
Outsourcing 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

9
Outsourcing 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

10
What 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

11
Outsourcing 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)

12
Key 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

13
Russian 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)

14
Russian 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

15
Russian 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!

16
Why 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

17
SPASIBO
  • 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
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