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Per Morten Hoff_Nearshoring outlook

Per Morten Hoff_Nearshoring outlook



Itera Partner Conference – the event in the open information exchange format. ...

Itera Partner Conference – the event in the open information exchange format.
A platform where we bring together people from our network to share
experience, to get new insights, expand network and be inspired to develop new ideas for business opportunities in connection with nearshoring.



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    Per Morten Hoff_Nearshoring outlook Per Morten Hoff_Nearshoring outlook Presentation Transcript

    • Nearshoring an outlook from IKT- Norge
    • ICT; the third largest industry sector in Norway (235 bill NOK in revenue 2009 SSB) 2
    • Software with higher revenue than fish and fishfarming3
    • Software as big as the agricultural sector4 http://upload.wikimedia.org/wikipedia/commons/e/e7/Cows_in_g
    • Industry is leaving Norway5
    • Digital economy can lift Europe out of crisis• “Europes digital economy has tremendous potential to generate huge revenues across all sectors, but to turn this advantage into sustainable growth and new jobs, governments must show leadership by adopting coordinated policies that dismantle existing barriers to new services"• Viviane Reding EU Commissioner for Information Society and Media.
    • An w a n lt tg f d itin P b e N t as a yo igiz g u l io re r ic S co etr 7
    • Main Problem in Norway Lack og skilled IT- people.
    • Offshoring Norge Kapasitet fremtid kan som rcing t s r om ou u lighe t global s ert m øk realis gjennomBest way to get more skilled U dekk es Dagenpeople is offshoring. Offshoring s Nytilgang fra univ, høys. NorgeEasiest way to offshore is Nearshore Dagens IKT Industri Tid
    • A growing and global markedWorldwide IT outsourcing (ITO) revenue totalled $246.6billion in 2011, a 7.8 percent increase from 2010 revenue of $228.7 billion, according to Gartner. Norway is lacking behind when it comes to outsorcing, we are still late adopters
    • The new outlook OnshoreHomeshore(hjemmekontor) Nearshore Offshore , 09.02.2011
    • Offshoring risks Higher overheadsCultural issues Geopolitical concerns Risk to corporate reputation Exchange rate fluctuation Poor IP protection Unreliable power suppliers Security concernsSalary inflation Data protection issues Legal issues Loss of expertise Inadequate infrastructure
    • Offshore vs. Nearshore Offshoring: Is the practice of hiring an externalorganization to perform some or all business functions ina country other than the one where the product or service will be sold or consumed. Nearshoring: Is a concept in which a company decides to relocate business processes to locations which are, generally, cheaper and yet geographically nearer.
    • Why Nearshore is the Better ChoiceSimilar Business Model: The idea is to move or find production in the nearest country with the lowest wage or material costs. Same Time Zone: You can be in more control of the manufacturing process by being able to communicate in real- time which can lead to a better working relationship.Lesser Travel Costs: Closer country allows for use of cheaper modes of transportation or less expensive flights.
    • Why Nearshore? Less Risk Involved: For the most part neighboring countrieshave a good idea of what’s happening around them; Politically, Legally, Economically, Financially, Socially, etc. By inherentlyunderstanding all these factors before conducting business you can limit organizational exposure. Cultural: As the culture of neighboring countries are more or less same, there is an existing expectation of how to conduct business with one and other. As a result, no learning curve is needed and you can get right down to business.
    • Frontoffice and backoffice
    • Ukraine most attractive offshoring destination in East Source: European IT Outsourcing Intelligence Report 2010, IT Sourcing Europe Ltd
    • Offshoring – the future• There is no going back – the globalized IT service industry is here to stay• IT service sourcing will continue to evolve• Globalization, automation and developments such as computing-on-demand will all influence the size and structure of the future IT workforce
    • What does offshoring deliver? - in summary• Globalization is a natural consequence of the development of the worldwide IT industry• The potential cost savings from using offshore resources are compelling and cannot be ignored• We need to learn new lessons about deriving the best from outsourcing relationships