Central and Eastern European IT Outsourcing Landscape Report 2011

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The 2011 Central and Eastern European (CEE)
IT Outsourcing (ITO) Landscape Report aims to analyze the most prospective countries in Central and Eastern Europe in terms of their factual capability to supply Western European
and Nordic clients with appropriate low-cost IT resources and skills missing/too expensive within own country, innovative solutions and long-term value.

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Central and Eastern European IT Outsourcing Landscape Report 2011

  1. 1. Central and Eastern European IT Outsourcing Landscape IT Sourcing Europe Limited Report 2011 Nearshore IT Outsourcing Market Research Coventry, West Midlands The United Kingdom 2011
  2. 2. 2|Central and Eastern European IT Outsourcing Landscape Report 2011 Table of ContentExecutive Summary................................................................................................................................................................................................................ 3Introduction .......................................................................................................................................................................................................................... 4European ITO: 2011 Expectations, Trends & Challenges .......................................................................................................................................................... 4Most Promising ITO Destinations in the CEE Region ................................................................................................................................................................ 7 Ukraine, Romania, Hungary, Poland, Belarus and Czech Republic Compared ............................................................................................................... 8 Total Cost of Ownership: Nearshore versus In-House Development Team .................................................................................................................. 11Ukraine’s ITO Profile 2011 .................................................................................................................................................................................................... 12Belarus ITO Profile 2011 ....................................................................................................................................................................................................... 13Conclusion ........................................................................................................................................................................................................................... 14Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  3. 3. 3|Central and Eastern European IT Outsourcing Landscape Report 2011 For close analysis within this Report six CEE countries were Executive Summary shortlisted based on the biggest IT outsourcing market shareIT Sourcing Europe’s 2011 Central and Eastern European (CEE) reached in 2010: Ukraine, Romania, Hungary, Poland, BelarusIT Outsourcing (ITO) Landscape Report aims to analyze the and Czech Republic.most prospective countries in Central and Eastern Europe in This analytical Report proves Ukraine and Belarus to beterms of their factual capability to supply Western European holding the almost equal leading positions with regards toand Nordic clients with appropriate low-cost IT resources and qualified IT workforce available on the job market, innovationskills missing/too expensive within own country, innovative readiness, access to the newest technologies, R&D and techsolutions and long-term value. education excellence, favorable service rates and innovativeThis Report’s key objective is to help Western European and business models offered to Western European outsourcingNordic corporate / IT decision makers benchmark current services buyers to help reach sustainability, flexibility andtrends and challenges of ITO and be aware of the factual strategic long-term IT / development cost savings.capabilities of the most popular/ leading nearshore Regarding the European Union (EU) member states analyzedoutsourcing destinations in the CEE region to deliver the state- in the course of this study in terms of their IT outsourcingof-the-art yet cost effective solutions able to meet the most potential, Romania appears to be the best country forcritical challenges of the rapidly changing business nearshore outsourcing in terms of low costs and IT resourceenvironments. pool, while Czech Republic, Poland and Hungary are not yetThe Report is based on the following industry studies and ready to offer enough IT resources to be involved inresearches: Central and Eastern European IT Outsourcing sophisticated projects requiring access to innovativeReview by Central and Eastern European IT Outsourcing technologies and skills that are in short supply in Western andAssociation, Gartner’s Research, Top 100 Global Outsourcing Northern Europe. However, all of these countries demonstrateLocations List by Global Services, countries’ reviews by high levels of readiness to host and manage numerousSourcingLine.Com, countries’ studies by World Economic complex IT functions. But since they have to fully comply withForum, Global Occupancy Costs - Offices 2010 Report by DTZ, the EU legislation, pay EU standard taxes etc, they are unableindustry publications in Business Week, Morrison & Foerster LLP, to offer reasonable cost arbitrage to the EU clients.CFO Magazine, Computer World etc.Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  4. 4. 4|Central and Eastern European IT Outsourcing Landscape Report 2011 Introduction o Cloud became a new business model in outsourcing, although it was not easy for every company to adopt it. ForIn 2009 the verdict for the global outsourcing was “it could have instance, financial companies and banks were slow to turn to thebeen much worse”. In 2010 outsourcing proved to be one efficient cloud, as they were dependent on financial regulators having toway for organizations to position themselves to capitalize on the approve of cloud-based deals or provide appropriate guidance onrecovery and show that their overall strategy is about creating how to avoid Cloud outsourcing risks2.value, not merely preserving costs. In 2009 outsourcing ratesdropped significantly and this trend continued in 2010, however o Quality of products and services delivered became the mainwith much slower decline rates. In 2010 the global market activity goal in the European outsourcing. Bigger service providers acquiredwas busier, the deal cycles became shorter, a trend of Do-It-Yourself slower achieving niche providers, while well-structures niche(DIY) sourcing by internal teams with less reliance on the external providers with good and timely market offerings survived thehelp evolved and favored incumbent suppliers allowing them to win competition and won a lot of long-term contracts from thecontract renewals of projects frozen / suspended in 2009 and companies in the SME sector, so European outsourcing remainedboosting revenues even in spite of slim margins. non-monopolized in 2010. The typical outsourcing transactions became smaller in scale and did not involve any largeOverall, in 2010 the global outsourcing market in general and the transformations. Project management and governance on vendor’sEuropean one in particular observed the following trends: side became a key measurement of outsourcing success3.o The worldwide IT spending totaled $3.4 trillion, up 5.4%from 2009 levels1 European ITO: 2011 Expectations, Trends & Challengeso Renewed emphasis on shared services across the entiresector, which led to increased competitors’ collaboration and Gartner predicts that enterprise IT spending in Europe, the Middlecooperation in terms of cost reduction in the shared costs areas. East and Africa (EMEA) will recover in 2011, after two years of decline4. However, government cutbacks mean that Westerno Financial services companies were back to the market after Europe is not expected to return to stronger enterprise IT spendinghaving closed / putting on hold most of their outsourcingtransactions in 2009. With many insurance companies and banks 2feeling more confident towards outsourcing, there was a significant Skinner, D., Chris Ford & Nigel Stamp, “Global Sourcing Trends in 2010”,increase in the financial sector deals in 2010. Such companies Morrison & Foerster LLP, 2010managed to rationalize their outsourcing contracts from numerous < http://www.mofo.com/docs/pdf/Global_Sourcing_Trends_in_2010.pdf > 3mergers resulting from the financial meltdown. Ibid. 4 Nguyen, A. “Gartner Predicts 2011 IT Spending Rebound in Europe,” Computer World, 2011 < http://www.computerworlduk.com/news/it-1 Gartner, Inc., 2010 business/3247742/gartner-predicts-2011-it-spending-rebound-in-europe >Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  5. 5. 5|Central and Eastern European IT Outsourcing Landscape Report 2011growth until 2012. The analyst house forecasts that IT spending will o Flexibility in processes and relationshipsreach €579 billion in EMEA in 2011, up 1.3 percent from 20105. Flexibility will be a key word in outsourcing deals over the next 12According to Gartner, the UK’s public sector cuts, which aimed to months. Companies will be seeking to adopt much more flexiblereduce the nation’s debt, were a significant contributor to the commercial arrangements with their ITO service providers to reflectdeclined outsourcing activity in Europe6. the different stages of the economic cycle. Outsourcing was used to recapture innovation and provide flexibility in 2010, compared toIn 2011, the European IT outsourcing (ITO) industry will observe the simply saving money that was the top trend of 20097.following trends: Service flexibility is not just the ability to meet the client’s IT needs,o Shorter deals cycles and DIY approach but the ability to flex the services to precisely cover the client’s business outsourcing needs and make their outsourcing decisionIn 2010, Europe saw a continuation of the trend for shorter deals, count. Although in the past years many European vendors labeledshorter procurement processes, and an emphasis on making things their services as a “flexible offer” to ensure they get morework actually rather than engaging in complex strategies. The DIY customers, they were not flexible at all in reality. In 2011, serviceapproach will be used even more intensively by the outsourcing providers are expected to understand the importance of changeprospects from Western and Northern Europe and this will result in acceptance in the process of setting up long-term relationships withshort-term transactional cost savings and less focus on establishing their clients. Therefore, they will tend to switch from a process-long-term strategies. Overestimating their internal resources and packaged and bureaucratic approach to differentiation, quality andabilities to do a high quality IT needs’ assessment, inexperienced innovation. In Central and Eastern Europe, more vendors arepurchasers of outsourcing services will suffer from longer-term beginning to change their business thinking and realize thelosses due to their inability to identify many of the key components importance of providing the clients with the right combination offor the long-term outsourcing success. With the increased focus on services, while still bringing ease and effectiveness to their businesscosts, Western European ITO buyers will save on governance costs objectives. So, in 2011 a hallmark of a true outsourcing professionaland overlook necessary governance functions. It will be especially will consist in the vendor’s ability to “get under the client’s skin” andcharacteristic of customers engaging in multi-sourcing (i.e. suggest the services that can bring its ultimate business goal to life8.distribution of tasks among several ITO providers in differentgeographic locations). o Innovative business models In 2011, an increased number of Western European ITO buyers will be looking for opportunities to sell their captive operations to5 7 Ibid. Ibid.6 8 Ibid. PowerHomeBiz.Com <http://www.powerhomebiz.com>Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  6. 6. 6|Central and Eastern European IT Outsourcing Landscape Report 2011traditional service providers and to release cash to their core Other innovative business models that will continue to evolve andbusiness. The captive centers proved to be cost inefficient in the catch on the European ITO market are those based on the Cloudpast years due to their complicated exit strategy and contracts’ Computing capabilities. Cloud abilities to distribute services toinflexibility. multiple customers over local WANs and Intranet, avoiding mainframes and/or midrange servers, will have the largest effectsStriving to evolve strategic long-term outsourcing relationships, on outsourcing since the very rise of this economic phenomenon.Western clients express readiness to move from project-based And most of these tremendous effects will plug in in 2011. Cloudservices and staff augmentation to more effective business models, providers will deal with the key issues of data security, privacyable to handle core software development. compliance and service level guarantees, but the market potential is expected to be too great for solutions to these problems not to beAlthough Offshore/Nearshore Development Centers (ODC/NDC) forthcoming in 2011. In 2010, the European outsourcing industrywith their strict project management hierarchy continue to expand began to seriously address many of these issues and will continue toin the CEE region, the innovative engagement models emerge as a do so in 2011 until cloud solutions become not just economicallyresponse to tougher competition in the IT market, requiring more tantalizing, but within the bounds of acceptable risk for customers.transparent and value-added relationships between the clients and If nothing else, the dramatically lower costs on offer from cloudexecutors supplied by ITO vendors. One example of such innovative providers will push customers to question charges by traditionalpartnerships is a Managed/Client Own Team model, in which the sourcing providers, and the cloud will be used as a lever inlocal supplier locates the client’s project team in its office and solves negotiations9.all of the clients’ administrative and HR issues, while the client has100% management of its vendor-supplied development team(s), its Gartner anticipates that the global services market for cloudmembers’ salaries and career growth opportunities. This model has computing will reach an approximate revenue of €110 billion withina better potential to maintain/increase employee retention and the next four years. Consequently IT service providers are busilyachieve better quality of delivery, compared to traditional ODC or upgrading their service offerings to match the cloud needs of theirproject-based models, in which the client communicates with IT existing customer base and to enable the access to an entirely newstaff through vendor’s project management and incurs losses in customer segment - the SME market.case of project staff turnover.This service delivery model is equivalent to the client’s in-house Furthermore, the rise of smart phones and 4G technology will opendevelopment team, but for a considerably lower cost. While clients up new business areas for these service providers, who have thefocus on production and core business lines, the supplier takes careof HR management as well as legal, administrative andinfrastructure issues that the client company would have to dealwith if it chose to start its own operations in a low-cost 9 Skinner, D., Chris Ford & Nigel Stamp, “Global Sourcing Trends in 2010”,neighborhood. Morrison & Foerster LLP, 2010 < http://www.mofo.com/docs/pdf/Global_Sourcing_Trends_in_2010.pdf >Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  7. 7. 7|Central and Eastern European IT Outsourcing Landscape Report 2011expertise with the technologies and will be able to handle profitably Most promising ITO destinations in the CEEmillions of transactions at very low revenues per transaction10. regiono Mergers and acquisitions will hit the This year IT Sourcing Europe shortlisted 6 CEE countries for outsourcing mainstream in 2011 comparison and analysis based on the 2010 forecast on the ITOIn Central and Eastern Europe, ITO service providers will be looking market volume13, as this indicator reflects well each certainto more opportunities to raise capital and to buy niche ITO players. country’s progress towards innovation, flexibility, IT resource poolTier 1 providers will focus on enhancing their creditworthiness and enlargement and improvement of global delivery. So, based on theseek ways to leverage costs by pointing to lower counter-party risk, assessment by the CEE Outsourcing Association, in 2011 thesustainability, financial stability and dedication to market. Smaller following 6 countries will lead the region’s ITO competition:Tier 2 providers will thus be challenged to overcome counter-party Ukraine, Romania, Poland, Hungary, Belarus and Czech Republic.risk and provide greater cost saving options in order to persuadeprospects to partner with them. Overall, in 2011 the Tier 1 providers Fig. 1: ITO Market Volume: 2009 vs. 2010 14are expected to tale a considerable ITO market share11.However, smaller niche providers, focused on long-term benefits 637and relationships with the clients, will be able to lead the market for Ukraine 508small outsourcing contracts. In 2010, the average size of ITO 536 Romania 429projects fell from multi-billion dollar deals, as the companies startedto look at niche services rather than global delivery, so in 2011 small 461 Hungary 346niche providers will have a good chance to win contracts that fall 434below the size at which Tier 1 providers are able to compete Poland 328successfully12. 348 Belarus 279 308 Czech Republic 270 0 200 400 600 80010 2010 (Mln €) 2009 (Mln €) Prieler, C. in “Central and Eastern European ITO Review 2010” by the CEEITO Association, 201011 Skinner, D., Chris Ford & Nigel Stamp, “Global Sourcing Trends in 2010”,Morrison & Foerster LLP, 2010 13< http://www.mofo.com/docs/pdf/Global_Sourcing_Trends_in_2010.pdf > CEE ITO Review 2010 by the CEE ITO Association12 14 Ibid. Ibid.Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  8. 8. 8|Central and Eastern European IT Outsourcing Landscape Report 2011 16Note: The forecast of market volumes for 2010 was calculated based on the Fig. 3: Capacity for innovation (2011)final values of market volumes in 2009, and weighted with the averageassessment of revenue growth for 2010 as reported by CEE companies.Ukraine, Romania, Hungary, Poland, Belarus andCzech Republic Compared 15Fig. 2: Growth of ITO service export market (2009-2010) 35,00% 30,00% 25,00% 20,00% 15,00% 2009 (%) 10,00% 2010 (%) 5,00% 0,00%15 16 CEE ITO Review 2010 by the CEE ITO Association World Economic Forum 2011Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  9. 9. 9|Central and Eastern European IT Outsourcing Landscape Report 2011 17 18Fig. 4: Labor Market Efficiency (2011) Fig. 5: Flexibility (2011)17 18 World Economic Forum 2011 World Economic Forum 2011Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  10. 10. 10 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1 19 20Fig.6: Companies’ Spending on R&D (2011) Fig. 7: Number of IT Specialists Employed in ITO (2009-2011) 25000 20000 15000 10000 2009 5000 2010 0 Fig. 8: Minimum vs. Maximum IT Rates by Country (in $ per man hour) Ukraine 40,1 12,8 Romania 46 14 Hungary 54,5 16,3 Poland 54 16,7 Belarus 37,7 12,2 Czech Republic 53,1 16Note: Belarus is excluded from analyses shown on Figures 3 through 6 dueto the lack of industry data 0 10 20 30 40 50 60 Max Rate Min Rate19 20 World Economic Forum 2011 CEE ITO Review 2010 by the CEE ITO AssociationCopyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  11. 11. 11 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1 Total Cost of Ownership: Nearshore versus In-House Development TeamThis is a rough calculation of the Total Cost of Ownership (TCO) for running a 2-person software development team in the developedEuropean countries such as the United Kingdom, Germany (representing Western Europe) and Denmark (representing Scandinavia) versus TCOof the same team located in Ukraine, Belarus, Poland, Romania, Hungary and Czech Republic. United Germany Denmark Ukraine Belarus Poland Romania Hungary Czech Kingdom RepublicSenior softwaredeveloper’s average 3,500 4,500 4,077 1,700 1,600 1,800 1,700 1,900 1,875salary + bonuses (€ /month)IT Project Manager’saverage salary + 5,300 5,000 4,750 1,900 1,850 2,100 1,950 2,200 2,100bonuses (€ / month)Office occupancycost (in € per 2 1886 1194 1150 798 774 780 852 800 820workstations/month,primary rent +outgoings) Total 10,686 10,694 9,977 4,398 4,224 4,680 4,502 4,900 4,795This is a simplified and rough calculation of TCO21. Normally, TCO is comprised of a greater number of indicators such as, for instance, long-termexpenses (employee replacement, scalability), risk/change management expenses, travel costs etc, but they should be estimated individually forevery project and team size, and do not differ significantly amongst the analyzed countries.Of the six CEE countries surveyed, two appear to be the most attractive and promising ones for Western European ITO buyers who look out toachieve significant cost arbitrage and gain access to vast IT resources – they are Ukraine and Belarus. Both weigh equally in terms of readiness toprovide state-of-the-art and cost effective innovative solutions and bring factual value to Western European and US clients in the long-termperspective.21 Sources used: PayScale.Com, ITjobswatch.Co.Uk, Developers.Org.Ua, Diz-By.Biz, DTZs 13th annual Global Office Occupancy Costs Survey 2010Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  12. 12. 12 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1According to the 2010 Global Services 100 list22, Ukraine is 11th and o Western-oriented government policies encourageBelarus is 13th among 20 leading countries in the area of ITO and partnership and close business ties with the US and EUhigh tech services. They are ahead of Poland, the fourth CEE country companies25including Russia (12th position), that took the 20th position. OtherCEE countries surveyed in this study did not enter the global list of o Ukraine has one of the most comprehensive laws onTop Outsourcing Locations. Based on this evaluation, the top Intellectual property and copyright protection in the world26leading locations that IT Sourcing Europe would recommend forprimary consideration by Western European companies looking out o The ITO Industry is rapidly transforming: new business /to outsource their IT function / software development are Ukraine service delivery models and approaches come to the scene, i.eand Belarus. Cloud Computing, Managed/Own Team etc o The Ukrainian hi-tech sector which began to form itself Ukraine’s ITO Profile 2011 since Ukraine gained independence (first ITO contract signed in 1991) just for several decades developed in the strong and dynamic industry, which value by skeptical analysts exceeded 1 billion in 201027 o Ukraine is a triple holder of the first position among CEEcountries in terms of market value, number of IT outsourcing o The year 2010 ended with a huge confrontation betweencompanies and number of professionals involved in IT outsourcing the Ukrainian small and mid-sized entrepreneurs and theservices23 government with regards to unfair modifications to the new Tax Code. Many local IT companies and ITO services providers united o According to the 2010 Global Services 100 list, Ukraine in an attempt to persuade the government of the seriousness ofranks 1st among all CEE countries and 11th among the world’s Top consequences of the new Tax Code for the future of the most20 leading countries in the area of ITO and high tech services (by the dynamic industry [IT]. Fortunately to the industry, the governmentnumber of qualified IT resources available)24 came to hear the appeal and harmoniously upgraded and adopted the new Tax Code28. o Ukrainian software /ITO vendors through their professionalalliances including the Ukrainian Hi-Tech Initiative are workingtogether to introduce a brand new, favorable position for the ITindustry, with provisions in the new Tax Code aimed to assist ITcompanies sustain and move ahead of the competition. 25” Outsourcing To CEE. Country Overview: Ukraine,” a webinar by the Ukrainian High-Tech Initiative, 201022 26 Global Services 100 Outsourcing Locations List 2010 Ibid.23 27 CEE ITO Review 2010 by CEE ITO Association Levi9 Global Sourcing < www.levi9.com>24 28 Global Services 100 Outsourcing Locations List 2010 Ibid.Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  13. 13. 13 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1As a result of close cooperation between government and IT sector Belarus ITO Profile 2011representatives, the Ukrainian IT Association is currently preparing aproposal for government to establish an economical experiment for4 years to facilitate the development and growth of the IT industry. o In recent years the Lukashenko government was opening the door to investment as never before. Since 2007 it has enacted regulatory reforms and tax relief measures that have vaulted BelarusFig. 9: Modern ITO trends in Ukraine from 129th place to 58th on the World Banks ranking of the "ease of doing business" in 183 countries29 o In H1 2010 foreign investment in the Belarusian economy 84% reached $4.4 billion, up 4.4% over the same period last year30 growth of IT services export o According to Dataquest, the Belarusian ICT market is ranked increase in IT infrastructure 66% support among the ten largest in Eastern Europe, Belarus share being about 2%, Ukraines - 4% and Russias - 26%31 increase in skilled specialists 55% shortage o Belarus has one of the best developed High-Tech Parks in increase in ITO consumption in 49% Europe. It is government-supported and, unlike similar parks in Europe the internal market and Asia, is virtual. It means that the laws and rules of the Park are increse in market consolidation valid all over Belarus regardless of the Park member’s current location 38% processes (whether it is a province or a capital city). It allows to fully utilize R&D, educational, professional and infrastructural potential of the whole increase of in-house 25% country. 95% of software products developed within the High-Tech development Park are exported: 45% are exported to the United States and Canada, improvement of IT industry 30% to Western Europe and 20% - to Russia and CIS countries32. 19% Residents of Hi-Tech Park are exempt from many dues and taxes support by government including: non-budgetary funds, income tax, VAT, customs dues for 9% imported products etc. market decentralization 0% 20% 40% 60% 80% 100% 29 Business Week <http://www.businessweek.com/magazine/content/10_16/b41740587013 % 85.htm> 30 Export.By 2010 31 Development.By 2011 32 Park.By 2011Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  14. 14. 14 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1Fig. 10: Modern ITO trends in Belarus Conclusion This CEE ITO Landscape Report 2011 compiled the most credible data obtained in the course of numerous industry studies and surveys including those by Gartner, IT Sourcing Europe, Global growth of IT services export 91% Services, Business Week, Sourcing Line etc. For this study six CEE countries with the biggest ITO market volumes were selected and increase in IT infrastructure 56% analyzed in terms of their factual capability to deliver innovative support and cost effective solutions and long-term value to Western and Northern European companies looking out to outsource their IT / increase in skilled specialists 70% software development and gain access to the global IT resources. shortage increase in ITO consumption in 37% Within this Report all six selected countries were compared and the internal market contrasted in terms of growth of ITO service export market, capacity for innovation, labor market efficiency, operational flexibility, increse in market consolidation 45% processes spending on R&D, number of IT specialists employed in ITO industry, Total Cost of Ownership and IT rates for the outsourced software increase of in-house 21% development. Although CEE EU member states such as Poland, development Hungary, Romania and Czech Republic demonstrated better IT improvement of IT industry infrastructure and outsourcing flexibility options, the non-EU states 76% support by government such as Ukraine and Belarus came to be two leading countries in terms of low service rates / IT salaries and office occupancy costs, market decentralization 6% vast IT resource pool and transparent and flexible service delivery models tailored to excellent R&D and project management 0% 20% 40% 60% 80% 100% capabilities. According to our final assessment, Ukraine is the most attractive % outsourcing location in terms of R&D potential, innovative business models offered by local ITO providers and IT workforce / people with high-tech education able to solve the most challenging IT tasks. Belarus is the leading ITO location in CEE in terms of low service rates / IT salaries and low workstation costs.Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com
  15. 15. 15 | C e n t r a l a n d E a s t e r n E u r o p e a n I T O u t s o u r c i n g L a n d s c a p e R e p o r t 2 0 1 1About IT Sourcing Europe Contact Us:IT Sourcing Europe Limited is a UK-based company specializing innearshore IT outsourcing market analysis and consultancy. Our IT Sourcing Europe Ltdservices include: The Meridian, 4 Copthall House, Station Square, Coventry, • Independent IT Outsourcing market research and analysis West Midlands, • Independent surveys of Western European outsourcers and CV1 2FL United Kingdom their IT outsourcing demand Email: info@itsourcing-europe.com • Independent surveys of Central and Eastern Europes IT Outsourcing services providers and their factual capability Tel.: +44(0)2476992505 to deliver top quality products and services on time and on Web: www.itsourcing-europe.com budget Blog: http://blog.itsourcing-europe.com • Consultancy and recommendations to companies planning to change their current outsourcing strategies • Consultancy and recommendations to companies planning to outsource their IT function nearshore © 2010 IT Sourcing Europe Limited, All Rights Reserved • Custom market and competition research and surveysWe have access to more than 100 CEE ITO providers. To link tothem, fill out our FindVendor Form available on IT Sourcing Europe’swebsite.Copyright IT Sourcing Europe Limited. 2011. All Rights Reserved. www.itsourcing-europe.com

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