Offshoring trends in Europe and specifically in germany

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Offshoring trends in Europe and specifically in
germany

• Minsk, Belarus

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About us

• Founded in 2000, Locations in Munich and Hamburg
• Partners Alexander Pohl (CEO) and Wolfgang
  Hierneis
• Core Competences
• Intl. Business Development
• Marketing and Sales
• Finance
• Business Consulting
• Software Integration

• Partnerships
• Ars Publicandi (GER),
• Global Secure Systems (UK),
• Peapod (UK),
• Arche-Group (FRA),
• Mey Group (CH),
• TIM-training (GER),

• Gotobavaria (GER),
• BDO (GER),
• Legal Advisors and Auditors,
• HR-Consultants,
• Systemintegrators

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Selected clients success stories

• Heyer Medical
• Deposix
• Siemens
• Mey-Group
• AXES Technologies
• Motherson Sumi
• Arcor
• Marconi
• Tenovis
• France Telecom
• Italtel
• Swisscom
• Winterthur
• Fiducia

• Network Telesystems
• PSSoft
• Watchguard
• Informatica
• PassGo
• PerSoft
• Trustworks
• Intellitactics
• Wallstreet AG
• Solsoft
• Efficient (bought by Siemens)

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Alexander Pohl

• 43 years old, born in Munich
• Married since 1990, 3 children
• Studies in Economics and Information Technology
• Multiple projects in Europe and USA
• International Marketing Director with the family
  business Bayrol Chem. Fabrik GmbH
• 14 years of professional experience with SMEs
  and BDO (intl. auditors/consultants)
• founding of my own business in 1996 (3A-Strategy)
• In 2000 setting up of 1Step2Europe Inc. Together
  with 2 founding partners
• In 2002 setting up of One Step To Europe (P) Ltd.
  With Suneil Bhende in Mumbai for focusing the
  Indian market.

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Our business focus

• Facilitating business opportunities for ICT
  companies in Europe in selected sectors
• Developing business in Europe (including finance,
  if required)
• Industries High-Tech, IT, Finance,
  Telecommunications
• Establishing market-contacts with Top 500 German
  firms and larger enterprises
• Regions Central and Western Europe.

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Some Facts Figures
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Some Facts Figures
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Some Facts Figures
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Some Facts Figures
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Some Facts Figures
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IT-outsourcing Europe (bn. Euro)
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German outsourcing market
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European Banks IT Spending
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European Banks IT Spending
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German Banks Automatisation
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Business caseBelgian Pension Fund

• Fund Portfolio Management
• Status
• Huge project projected for 4 years with 350
  project members
• After 2 years all targets and milestones missed
• Internal processes and work estimate not properly
  set up and defined
• Looking for advice
• Project organization and management
• Feasability of using external, additional
  resources
• Project estimate, based on existing requirements
• How to identify and screen potential suppliers
• Suppliers
• Looking for ready done modules
• Replacement 50 of internal resources - projected

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Business case germany

• Reporting to comply with requirements by BaFin
• Industry Standard or Monopoly by CMG-Logica
• Too expensive
• Slow adoption to current environment
• Not very customer centric
• Many German Banks (ca. 250) would love to have a
  choice
• More flexible
• Better integration with existing systems

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Some Facts Figures
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Business Caseeuropean Provider covering 220
countries

• Field Service Support PDA/Smartphone
• Sector Specific Focus for SCM
• Telco, High-Tech, Utilities
• Integration of on site Engineering with the Back
  office
• Dispatch of work orders
• Scheduling and assignment of resources
• Acknowledge the work order
• Order for material and alert for availability
• Onsite support and access to the inventory and
  other back office systems
• Request for additional material
• Termination
• Consulting in design of workflow and integration
  with existing systems
• Restructuring existing processes

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Business Casetelecommunications Equipment
Manufacturer

• Wireless Fixed Line - Broadband
• Development of a new WiMAX and BRAN Stack
• Existing project is running out of time and
  budget
• New system design, if necessary
• Rewrite of the requirements and adoption to the
  newest 802.16g standard
• Consultation about existing stack products and
  costs involved
• Project estimate for own development
• New development environment
• Test bed
• Failover, Backup and remote update and management

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Business Casetelecommunications Equipment
Manufacturer

• Compliance with international ISDN/Signaling
  standards
• Analysis of existing differences of standards and
  their implementation for all countries in
  question (Asia, Africa, Europe, South- and NA)
• Implementation of these variants in existing
  product - homologenisation
• Set up of Test bed
• Extensive tests locally and offshore

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India Lessons learnt?
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India Lessons learnt?
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Lessons Learnt - India

• Indians failed to penetrate Continental Europe
• Reasons
• Language Barrier
• Business Mentality - Lack of focus, very few
  exceptions, like HSS, iflex, AXES
• USA as a market place will become tough
• Growing competition, new entrants (Phillippines
  ...)
• Pricing telco provider pay only 15 US
• US customers get picky body shopping
• Consolidation Big players

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Lessons Learnt - India

• Indian supplier try to get around these
  constraints by creating high value services and
  dependancy for their customers
• European Off shoring is not yet as mature ...
• mid sized is in most cases ok
• Focus is VERY important
• Acceptance for higher pricing, when Nearshore
• Fixed price
• Security, Certification not as important as for
  US clients

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4Ways2Business

• Export / Reseller
• no market-penetration
• the importer takes the profit
• Representative Office / Co-operation
• high market penetration
• sales on customers' demands
• Joint Venture
• close contact to customers and markets
• local partner usually in the lead
• Outsourcing / Buy-in in a spin-off
• strong customer-bind
• decisions and profits fall on you

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Business Opportunities

• Co-operation or Joint-Ventures ensure
• know-how-transfer
• quick market-entry
• Outsourcing (BPO, IT) - emerging market in
  Germany
• Co-operations and Joint-Ventures can be
  established in Germany
• Public funds available for Indian companies under
  German development co-operation

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Successful strategy for outsourcing

• Learn to understand the local markets
• Market research
• Customers needs and target group
• Local competitors and pricing
• Provide a one-stop-shop solution for your
  customers that covers all their needs e.g.
• Set-up a joint venture
• Offer a Buy-in
• Be prepared to invest in a spin-off
• Be patient Create a trust relationship, try to
  understand your customers needs

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Dos and Donts for outsourcers

• Act globally, be present locally especially in
  the very decentralized marketplace of Europe
  -gtGLOCAL
• Let yourself be introduced to the market by a
  native for building a trust relationship
• Build your own German infrastructure for contract
  management, sales and marketing, project
  management, support (1st level)
• Never sell your services only by low pricing
• Create added value through flexibility, highly
  skilled engineers and specialising in industries
  and applications

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Dos and Donts for outsourcers

• Act globally, be present locally especially in
  the very decentralized marketplace of Europe
  -gtGLOCAL
• Let yourself be introduced to the market by a
  native for building a trust relationship
• Build your own German infrastructure for contract
  management, sales and marketing, project
  management, support (1. level)
• Never sell your services only by low pricing
• Create added value through flexibility, highly
  skilled engineers and specialising in industries
  and applications
• Never underrate cultural barriers and language
  difficulties during the sales cycle and the
  ongoing customer relationship

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3Ways2GetToMarket

• Query
• Penetrating the German market?
• Solutions
• Find a reseller
• Co-operate with a local partner
• Set-up a joint-venture

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Pros and Cons for Resellers

• Advantages
• No capital required, low cost
• Access to established customer-base
• Fast turn-over initially
• Disadvantages
• German resellers are small entities with limited
  and regional customer-base, i.e. one reseller
  will never suffice
• German resellers expect high commitment from
  supplier in terms of marketing, support, time,
  documentation
• High transaction-costs
• No funding possible

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Pros and Cons of Co-operation

• Advantages
• Co-operation partners offer established brand,
  reputation and customer-bases e.g. as intl.
  consultants
• Present yourself as a local player through
  partner
• Get know-how and facilities for marketing,
  market-entry strategy
• Medium capital expenditure, medium cost
• Funding available
• Disadvantages
• Long-term business perspective
• Slower development of turn-over

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Pros and Cons of Joint-Ventures

• Advantages
• Strong success-oriented commitment from both
  sides
• Access to broad customer base, established
  marketing and sales channels
• Funding easily available in German private and
  public finance markets
• Know-how-transfer driven by results (RD,
  Production)
• Disadvantages
• Risk finance required (e.g. through cost
  coverage)
• Loss of independence
• Complexity of relationship requires intense
  preparation and permanent screening

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Buy-ins and investments

• Why should you be ready to invest?
• Outsourcing-plans can lead to a spin-off-strategy
  with your potential German customers
• Set-up own business to become outsourcer of more
  than one customer
• Establish your own brand and business in Germany
• Allow others to join in!
• Find strategic industrial-investors and/or
  financial investors
• Profit from German public and private capital
  market
• Profit from local and specific industry know-how
• Let your main customer be your capital partner as
  well

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Doing business in Germany

• Business mentality
• Strategic and thorough planning
• Decisions are based on performance not on
  marketing
• Efficient and direct communication
• Scheduling in advance and punctuality expected
• Legal / tax
• Different legal system (German law vs. English
  law)
• Based on civil code
• Contracts only regulate what is not covered by
  the law
• Legal advice therefore cheaper than Anglo-Saxon
  countries
• Complex but competitive tax-system, over-all
  tax-burden in 2002 lower than UK, France, USA

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Our offer (i)

• We assist you in...
• Market entry
• defining your goals
• defining steps and phases
• deciding cooperation v/s investment
• Screening the markets
• understanding your customers requirements
• understanding the European business-approach
• defining your target-group
• Defining a customized selling-proposition for
  Europe

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Our offer (ii)

• We assist you in...
• Marketing strategy
• presenting yourself as a local player
• use our resources (call-center, help-desk,
  advisory network, customer relationships etc.)
• learn how to approach European markets and
  customers
• Placing your products
• present your products and services
• negotiations and contract management
• fulfilment and after-sales services

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Our offer (iii)

• We assist you in...
• Setting up a local entity
• Strategic (investment v/s representative office)
• Finance (public aid and seed finance)
• Human Resources (recruitment and training)
• Networking, PR, Marketing, Sales and Consulting
• Identifiying Partners and Funding
• Corporate Finance
• Public aid
• Strategic industrial investors / partners

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1Mission2Follow

• You have the product - we have the background
  for the European markets.
• Use our ready made infrastructure of established
  networks, addressees, legal advisors and
  consultants
• Get insight knowledge about European Business
  Culture and Mentality by our partner TIM-training
• Our Focus is your success
• We usually earn 50 on a success basis
• We bring your venture to break-even by cost
  efficient marketing and sales activities
• We set up business operations for you in Europe

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Selected list of partners

• Arche Group SA, Paris
• Esche, Hamburg
• 3A-Strategy, Hamburg and Munich
• GoToBavaria, Munich
• HPS AG, Lausanne
• GSS plc., Brighton and London
• Mey Group Inc., Zurich
• TIM-Training, Munich
• TDS, Heilbronn
• Horvath Partner, Stuttgart
• Deloitte Touche
• BDO

• Getronics
• Hughes Software
• Wipro
• Infosys
• Birla Group
• MBT-Europe
• AXES Technologies
• one network
• human resource agencies
• management consultancies
• interim manager

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1Step2Europe.com Inc.

• http//www.1Step2Europe.com
• info_at_1Step2Europe.com
• Glockengießerwall 26 Pilotystraße 4 20095
  Hamburg 80538 Munich
• Germany
• Tel[phone] Tel [phone]
• Your contact to us
• Suneil Bhende Alexander Pohl
• sBhende_at_1Step2Europe.com
• aPohl_at_1Step2Europe.com