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    hu...
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          ...
Main Problem in Norway          Lack og skilled IT-          people.
Offshoring                                                    Norge                               Kapasitet               ...
A growing and global markedWorldwide IT outsourcing (ITO) revenue totalled $246.6billion in 2011, a 7.8 percent increase f...
The new outlook                 OnshoreHomeshore(hjemmekontor)                   Nearshore                 Offshore       ...
Offshoring risks                        Higher overheadsCultural issues                                                Geo...
Offshore vs. Nearshore      Offshoring: Is the practice of hiring an externalorganization to perform some or all business ...
Why Nearshore is the Better ChoiceSimilar Business Model: The idea is to move or find production in the nearest country wi...
Why Nearshore? Less Risk Involved: For the most part neighboring countrieshave a good idea of what’s happening around them...
Frontoffice and backoffice
Ukraine most attractive offshoring destination in East                 Source: European IT Outsourcing Intelligence Report...
Offshoring – the future• There is no going back – the globalized IT service  industry is here to stay• IT service sourcing...
What does offshoring                             deliver?                         - in summary• Globalization is a natural...
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Per Morten Hoff_Nearshoring outlook

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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

  1. 1. Nearshoring an outlook from IKT- Norge
  2. 2. ICT; the third largest industry sector in Norway (235 bill NOK in revenue 2009 SSB) 2
  3. 3. Software with higher revenue than fish and fishfarming3
  4. 4. Software as big as the agricultural sector4 http://upload.wikimedia.org/wikipedia/commons/e/e7/Cows_in_g
  5. 5. Industry is leaving Norway5
  6. 6. 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.
  7. 7. 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
  8. 8. Main Problem in Norway Lack og skilled IT- people.
  9. 9. 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
  10. 10. 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
  11. 11. The new outlook OnshoreHomeshore(hjemmekontor) Nearshore Offshore , 09.02.2011
  12. 12. 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
  13. 13. 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.
  14. 14. 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.
  15. 15. 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.
  16. 16. Frontoffice and backoffice
  17. 17. Ukraine most attractive offshoring destination in East Source: European IT Outsourcing Intelligence Report 2010, IT Sourcing Europe Ltd
  18. 18. 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
  19. 19. 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

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