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Information Technology & Outsourcing
Migration to Central & Eastern Europe
Outsourcing Industry
Outsourcing will be a $483 billion global
industry by the end of 2013, with significant
emphasis on t...
Software and IT Outsourcing to Grow
▪ IT outsourcing and hardware
maintenance will grow by 7.3%, as
firms especially in Eu...
KPMG 2013:
State of the Outsourcing Industry
▪ Key Findings:
– Efficiency & Effectiveness
▪ Cost Reduction (87%)
▪ Greater...
The Tholons
2013 Top 100 Outsourcing Destinations
Southeast Asia South AmericaEastern Europe
“Dynamic shifts occurring acr...
Trends Shaping the Outsourcing Market
Source: IT Business Edge
▪ Going Vertical
▪ Outcome-based pricing
▪ Shifting to mana...
 Global demand
is higher than
supply
 Eastern Europe
is target market
 Ukraine is the
target for
Western and
Eastern Eu...
IT & Outsourcing CEE
▪ Facts:
– Companies are increasingly
considering alternative locations to
India for services work, a...
Ukraine – IT Specialists
▪ Approximately 25,000 IT specialists
graduate from Ukrainian universities
each year.
▪ The count...
Ukraine – IT Specialists
▪ Geographical distribution of Ukrainian IT
specialists:
– 40% Kyiv
– 19% Kharkiv
– 16% Lviv
– 7%...
Higher Education
▪ Ukraine’s higher
education systems
comprises:
– 81 Universities
– 48 Academies
– 149 Institutes
– 2 Con...
Ukraine and Outsourcing Facts
▪ Ukraine was ranked the
first among 16 countries
of the CEE region by the
volume of IT outs...
IT & Outsourcing Ukraine
Source: Code Spring
IT & Outsourcing Ukraine
Source: ITO News
Top needs…
Analytics, Big Data, Mobility and Cloud
▪ In software, business
intelligence and analytics apps
will be the hot...
Organization
Strategy
Service Offering
Organizational Capability
Enablers
Organizational
structure
KPIs and
Governance
Org...
Global OPDs Today
With the maturity of market, OP/AD organizations will increasingly need to redraw
their strategies to me...
Systems of engagement guide
people in their physical world
Mobile is the new face of engagement
Systems of record host
tra...
Context-rich experiences are the key to
successful systems of engagement
Ukraine… the Clear Choice for
Outsourcing
▪ IT outsourcing market
volume of US$ 1.1bn
▪ More than 1,000
outsourcing
compan...
IT and Outsourcing: Migration to Central and Eastern Europe by alan harlan, ceo, soft serve
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IT and Outsourcing: Migration to Central and Eastern Europe by alan harlan, ceo, soft serve

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Alan Harlan, CEO at SoftServe, Inc. shared his insights on IT and Outsourcing Trends - Migration to Central and Eastern Europe at the 2013 IT Weekend Ukraine conference that took place on September 14, 2013, in Kyiv, Ukraine. Here`s Alan`s presentation.

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  • KPMG – State of the Outsourcing Industry ReportConducted December 2012 / February 2013The largest-ever quantitative industry study cover both IT and business process outsourcingRespondents included 1355 stakeholders across enterprise buyers, service providers and consultant/influencer organizationsThe aim of the survey was to understand their views, observations and intentions for 2013 and beyond, when it comes to outsourcing IT and business processes
  • Transcript of "IT and Outsourcing: Migration to Central and Eastern Europe by alan harlan, ceo, soft serve"

    1. 1. Information Technology & Outsourcing Migration to Central & Eastern Europe
    2. 2. Outsourcing Industry Outsourcing will be a $483 billion global industry by the end of 2013, with significant emphasis on three broad areas: Logistics, sourcing and distribution services; Information technology services, including the creation of software and the management of computer centers; Business process outsourcing (BPO) areas such as call centers, financial transaction processing and human resources management. Source: Plunkett Research
    3. 3. Software and IT Outsourcing to Grow ▪ IT outsourcing and hardware maintenance will grow by 7.3%, as firms especially in Europe, Japan, and other struggling economies turn to outsourcing to save money. ▪ Elsewhere, software will be the growth story, with global growth of 6.5%. ▪ Computer equipment will join software as the fastest growing categories at 7.0% and 8.8% ▪ IT consulting and systems integration services at 6.8%. Source: ITO News
    4. 4. KPMG 2013: State of the Outsourcing Industry ▪ Key Findings: – Efficiency & Effectiveness ▪ Cost Reduction (87%) ▪ Greater Scalability of Operations (82%) ▪ Process Standardization (74%) – Strategic Focus ▪ Accessing Better Talent (70%) ▪ Accessing Better Technologies (62%) ▪ Improving Analytics Capabilities (62%) Source: KPMG 2013 State of the Outsourcing Industry
    5. 5. The Tholons 2013 Top 100 Outsourcing Destinations Southeast Asia South AmericaEastern Europe “Dynamic shifts occurring across regional outsourcing landscapes. For this year, the outsourcing landscapes of three particular regions have progressed significantly” Source: Tholons
    6. 6. Trends Shaping the Outsourcing Market Source: IT Business Edge ▪ Going Vertical ▪ Outcome-based pricing ▪ Shifting to managed services ▪ More strategy less staff augmentation ▪ Supporting an empowered employee ▪ Restructuring of contracts ▪ Asking for help, expecting solutions ▪ ITO trumping BPO ▪ Developing best-of-breed strategies ▪ In the Cloud…now what? Global Outsourcing Trends
    7. 7.  Global demand is higher than supply  Eastern Europe is target market  Ukraine is the target for Western and Eastern Europe Czech Romania Ukraine Poland Trends that Influence IT in Ukraine
    8. 8. IT & Outsourcing CEE ▪ Facts: – Companies are increasingly considering alternative locations to India for services work, and one of the leading choices is CEE. – CEE has a strong talent pool and strengths in sophisticated software engineering. – CEE’s core competency is high- end, sophisticated custom software development. Source: Forrester
    9. 9. Ukraine – IT Specialists ▪ Approximately 25,000 IT specialists graduate from Ukrainian universities each year. ▪ The country holds the 4th position globally for the number of IT specialists. ▪ Ukraine holds leadership position together with the USA, India and Russia. ▪ Over the last 8 years the volume of software development and IT outsourcing services market has grown by a factor ten or 30-40% annually in average. Source: ITO News
    10. 10. Ukraine – IT Specialists ▪ Geographical distribution of Ukrainian IT specialists: – 40% Kyiv – 19% Kharkiv – 16% Lviv – 7% Dnepropetrovsk – 4% Odessa ▪ More than 50% of the Ukrainian IT market is exporting IT services or software development outsourcing. ▪ Experts say that the most promising areas of the industry from now on will be services related to outsourcing and system integration plus development of cloud computing technologies. Source: ITO News
    11. 11. Higher Education ▪ Ukraine’s higher education systems comprises: – 81 Universities – 48 Academies – 149 Institutes – 2 Conservatories – 327 Technical schools – 216 Vocational schools Kiev University National University of Kyiv-Mohyla Academy Kiev University Kharkiv Polytechnical Institute Lviv UniversityDonetsk National University Donetsk National Technical University Kiev Polytechnic Institute Kharkiv University Source: ITO News
    12. 12. Ukraine and Outsourcing Facts ▪ Ukraine was ranked the first among 16 countries of the CEE region by the volume of IT outsourcing services and the number of IT outsourcing companies. ▪ According to the 2010 Global Services 100 list, Ukraine is 11th among 20 leading countries in the area of IT Outsourcing and High Tech Services. Source: ITO News
    13. 13. IT & Outsourcing Ukraine Source: Code Spring
    14. 14. IT & Outsourcing Ukraine Source: ITO News
    15. 15. Top needs… Analytics, Big Data, Mobility and Cloud ▪ In software, business intelligence and analytics apps will be the hot products, along with mobile smart process apps for collaborative business processes. ▪ The latter, which are primarily sold on a software-as-a-service basis, will help SaaS subscription revenues grow two-to-three times faster than combined license-and- maintenance software. Source: ITO News
    16. 16. Organization Strategy Service Offering Organizational Capability Enablers Organizational structure KPIs and Governance Organization Strategy Execution Strategy • Depth of verticalisation in organization structure (sales, solution design, delivery, support functions) – aligned to strategy and scale/scope • Reporting relationships and formal hierarchy (matrix etc.) • Alignment of Organization strategy with evolving client needs • Clear articulation of horizontal and vertical strategy • Investment strategy – Organic and M&A • Leadership development State of verticalisation in the OPD context has been assessed on six broad parameters • Defining market and services based on strategy • Platform development • Skill sets, knowledge and competencies development • Change in KPIs to enable/implement the change – defining accountabilities and control • Implementation of the change in mind set – Behavioral changes and policies • Change management • Alignment of training and hiring in accordance with strategy and organization structure • Talent management Verticalization by OPDs is defined as alignment of their strategy, offering and operating model to meet the needs of specific industry verticals
    17. 17. Global OPDs Today With the maturity of market, OP/AD organizations will increasingly need to redraw their strategies to meet evolving client needs StrategicLevelofclientneedTactical Time ClientneedImplicationsfor OPDs Cost reduction for transactional scope • Primary focus to reduce cost of operations / LA • Need to outsource non- core functions • Buyer (client): Example SVP R&D Core R&D support • Need for value-added OPD offerings • Need for client-specific solutions • Proven track-record • Buyer (client): CTO and Functional Heads Transformation Partner • Buyer (client): CEO and COO, CTO • Adopt outcome – based models • Provide process transformation in core R&D processes • Provide Eco-system delivery for 360⁰ relationship and VAS • Reliable, risk sharing, financially stable strategic partner • Need for ideation or TCO impact to support growth • High Value Services PA, DA and UI/UX • Move beyond basic QA and R&D functions • Develop vertical experience in client focus areas • Customise for clients – Example integrate custom Product IP Support • Offer outsourcing services for non-core R&D Functions • Offer competitive pricing to win contracts • Develop standardised services across clients Global OPDs have focused on ‘Core-Technology Support’ but will increasingly need to focus on becoming transformation partner and develop verticalized thinking for an industry relevant value proposition. SoftServe Transformation • UI/UX Consulting • Product Ideation • Actionable Analytics • Mobility / Security Highly Risk Adverse Risk Acceptance Abiliton Infusion
    18. 18. Systems of engagement guide people in their physical world Mobile is the new face of engagement Systems of record host transactions in the virtual world Systems of engagement empower people with context-rich apps to take the next most likely action Source: November 16, 2012, “Great Mobile Experiences Are Built On Systems Of Engagement” Forrester Report
    19. 19. Context-rich experiences are the key to successful systems of engagement
    20. 20. Ukraine… the Clear Choice for Outsourcing ▪ IT outsourcing market volume of US$ 1.1bn ▪ More than 1,000 outsourcing companies operating in the industry ▪ More than 25,000 IT specialists involved in outsourcing. Source: ITO News Ukraine is one of the most attractive nearshore outsourcing destinations for both North American and European businesses.
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