Norway's IT Outsourcing Intelligence Report 2011
Upcoming SlideShare
Loading in...5
×
 

Norway's IT Outsourcing Intelligence Report 2011

on

  • 1,225 views

This Intelligence Report is based on the survey of the 491 Norwegian companies that either outsource their Software Development / Information Technology function(s) to an external service provider ...

This Intelligence Report is based on the survey of the 491 Norwegian companies that either outsource their Software Development / Information Technology function(s) to an external service provider onshore (within Norway), nearshore (within/close to the same time zone) and/or offshore (more than 2 time zones away), or develop their software/IT solutions in-house.

Statistics

Views

Total Views
1,225
Views on SlideShare
1,225
Embed Views
0

Actions

Likes
1
Downloads
126
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Norway's IT Outsourcing Intelligence Report 2011 Norway's IT Outsourcing Intelligence Report 2011 Presentation Transcript

  • IT Sourcing EuropeEuropean IT Outsourcing European IT Outsourcing MarketIntelligence Report 2011: IntelligenceNorway November 2011
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKContents Executive Summary This Intelligence Report is based on the survey of the 491 NorwegianContents .......................................................................................................... 2 companies that either outsource their Software Development / InformationExecutive Summary ......................................................................................... 2 Technology function(s) to an external service provider onshore (withinSurvey Overview ............................................................................................. 3 Norway), nearshore (within/close to the same time zone) and/or offshore (more than 2 time zones away), or develop their software/IT solutions in-Key Takeaways from the Survey ...................................................................... 4 house.Profile of Outsourcers ..................................................................................... 5IT Outsourcing Drivers & Factors ................................................................... 10 The Report aims to help Norwegian outsourcing companies:IT Outsourcing Challenges & Problem Solving ............................................... 12 Get an in-depth understanding of the current IT Outsourcing demandsClient – Vendor Relationships ....................................................................... 13 and trends See what challenges are facing their market peers / competitors andIT Outsourcing Costs...................................................................................... 15 how they respond to themImpressions of IT Outsourcing ....................................................................... 17 Revise / improve their current IT Outsourcing engagements / business models based on the industry best practicesTrends & Challenges of the In-House Software Development .................... 188Future Adoption of IT Outsourcing Services in Norway............................... 222 The Report aims to help Norwegian non-outsourcing companies:Key Findings at a Glance .............................................................................. 244 Better understand modern software development/IT costs optimizationConclusions and Predictions ........................................................................ 266 and/or reduction strategies See what challenges are facing the in-house software development and how their market peers / competitors respond to them Evaluate own readiness to adopt the outsourced / distributed development Find out what their market peers think about software development /IT Outsourcing and how they are / will be preparing for adoption of the outsourced development in the future2|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKSurvey Overview Additionally, inbound marketing initiatives were launched in order to attract more companies to participate in the survey. In the frames of this campaign,The Norwegian IT Outsourcing (ITO) and In-House Software Development the following steps were taken:(SD) survey was conducted between October 31 and November 25, 2011, in Online press releases and survey announcements distribution;the frames of the All-European ITO research. Survey localization and optimization in social media such as LinkedIn, XING, Facebook, blogs ( Twitter, Word Press, IT Sourcing Europe’sSurvey goals: Blog), event management systems (Amiando), and B2B web portals Explore factors that drive Norwegian companies to outsource their (Europages, Hoovers) SD/IT functions in 2011 All data obtained were analyzed in the form of industry aggregates. The Explore challenges associated with offshore/nearshore outsourcing answers to the open-ended questions were organized by their relativity to and the most effective problem solving techniques the study goals and displayed as the option “all other responses” in charts Explore the use of different business models in ITO engagements and and graphs further in the Report. find out which model works best for what type of companies and industries Outsourcing Activity & Categories Surveyed: Explore factors that keep Norwegian companies away from The following ‘outsourcing activity’ is referred to in the 2011 Norwegian ITO outsourcing their SD/IT function(s) Report: Compare and contrast the 2011 and future ITO demands across Norwegian industries Software Development / Information Technology Outsourcing (SD/ITO) is the process of transferring part of/entire software development functionThe survey was available online and hosted by SurveyMonkey, the world’s and/or other Internet related work to the execution by the external ITleading provider of web-based survey solutions. In order to reach as many services provider(s)Norway-based companies as possible, IT Sourcing Europe used its owndatabase of business contacts and sent out a survey invitation email to eachcompany’s decision maker(s) (C-level executives, IT / Outsourcing Managers,Directors, Heads of Software Development etc).3|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKThe following categories fall under this activity: Key Takeaways from the Survey Application (app) development and maintenance Website / ecommerce systems The greatest demand for ITO services in Norway comes Data warehousing from B2B software development companies IT security Data / voice network operations Most of ITO projects take 3 to 5 and 10 to 19 IT specialists Remote IT infrastructure management to complete and are valued at € 0-199K Web solutions are most outsourced, while CloudThese categories further fall under the five key areas of expertise: computing is least outsourced in Norway Web (Web 2.0, .NET, Java, PHP, open source etc) Most of the Norwegian companies single-source offshore Enterprise 2.0 (J2EE, J2SE, C#, MySQL etc) or onshore Mobile development (J2ME etc) Most of the Norwegian companies outsource to reduce Embedded development operating costs, accelerate time to market, access IT staff Software as a service (SaaS) and Cloud Computing outside Norway and release in-house staff for other business purposes The key issues in the Norwegian ITO are delayed project delivery, poor project management on vendor’s side and cultural difference Own Development Team is the most widely used engagement model in Norway In the future, more Norwegian ITO buyers will go nearshore Maximum project control retention is the key barrier that prevents many Norway’s companies from adopting ITO services4|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKProfile of Outsourcers Do Companies Outsource Any Element of Their IT / Software Current Outsourcing Experience Development?5|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Company Size (Headcount) Primary Industry6|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKRevenue Growth Expectations Outsourcers In-House Development Companies7|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Size of Project Teams on Vendor’s Side (Headcount) Value of the Outsourced Project(s) (€)8|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK The Outsourced Areas of Expertise Do Companies Multi-Source?9|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK IT Outsourcing Drivers & Factors Key IT Outsourcing Drivers Outsourcing Destinations10 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Factors’ Rating In Terms of Their Importance in the Choice of the Factors’ Rating In Terms of Their Importance In the Choice of the Outsourcing Destination Outsourcing Partner11 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKIT Outsourcing Challenges & Problem Solving Key Responses to the ITO ChallengesKey Challenges of the Outsourced IT / Software Development12 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKClient – Vendor Relationships Vendor’s Size* How Companies Found Their ITO Vendor(s) *Respondents were asked to refer to their primary vendor in case of multisourcing13 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Service Delivery Models Used In the Outsourcing Engagements Who Makes Final HR Decision / Selects Specialists To Be Involved In the Project?14 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK IT Outsourcing Costs Levels of Companies’ Satisfaction with Their Current Vendors and Quality of Services Provided Do Companies Know Exact Salaries of Their Project Team Members on Vendor’s Side?15 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK How Actual Annual Incurred Costs Compare to the Contracted Ones Actual Savings from the Outsourced IT / Development16 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKImpressions of IT Outsourcing17 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Trends & Challenges of the In-House Software Development Do Companies Plan to Continue Outsourcing Their Projects In The Next 12 To 24 Months? How Non-Outsourcing Companies Fulfill Their IT / Development Tasks18 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Size of In-House IT Teams Part of Corporate Budget Spent on Software Development19 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Level of Satisfaction with the In-House Development Key Challenges of the In-House Software Development20 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK How In-House Developers Respond To Challenges Reasons Keeping Companies Away From ITO21 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKFuture Adoption of IT Outsourcing Services in NorwayCircumstances in Which Companies Would Consider Outsourcing IT / Where Current Non-Outsourcers Would Transfer Their IT / Development in the Next 12 To 24 Months Development In the Future22 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK Factors’ Importance In the Future Choice of the Outsourcing Factors’ Importance In the Future Choice of the Outsourcing Partner Destination23 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKKey Findings at a Glance Regarding the outsourcing destinations that the Norwegian companies choose to offload their IT processes to, the survey comes up with some interesting yet unexpected findings: the equal numbers of companiesSince the 2011 survey has been expanded and modified, only some of the outsource offshore, onshore or multisource nearshore and offshore andfindings will be compared to the results of the 2010 survey, while the rest nearshore and onshore, while only slightly more than 11% of Norwegian ITOwill be analyzed ad-hoc. buyers source nearshore (down 20.9% from 2010).As the 2011 survey shows, the greatest demand for the outsourcing services Regarding the factors that the Norwegian companies consider as veryin Norway comes from the B2B-focused IT sector. In general, ITO is used important when deciding on their outsourcing geography, 100% of surveyacross diverse verticals, including some lucrative innovative niches such as respondents believe that foreign language skills availability is the mostmobile development and digital media. However, it is not this extensively important factor, more than 71% look for low costs (up 44.4% from 2010),used by construction, education, financial, manufacturing, entertainment around 57% look for available IT talent pool (up 43.1% from 2010) andsectors and government. another 57% rely on positive references from peer companies (up 37.1& from 2010).Most of the Norwegian ITO engagements are valued at €0-199K, which isdown 21.6% from 2010. In 2011, the volume of the €200-499K contracts Analyzing the top three drivers boosting corporate decisions to outsource indropped by 24.3% and the volume of the €500K+ contracts increased by 2.7% 2011, almost 63% of the Norwegian ITO buyers outsource in order to reducefrom 2010. This finding shows a significant shift from large to smaller ITO operating costs (up 39.5% from 2010), the same number of companiescontracts and can be attributed to the increased number of web outsources to speed up their time to market (TTM) – up 36% from 2010, 50%development projects (up 63% from 2010), mobile projects (up 31% from outsource to access IT resources outside Norway (i.e. as a response to the2010) and SaaS/Cloud computing projects (up 10% from 2010). shortage of domestic IT skills and resources) – up 19% from 2010, and another 50% outsource to free in-house resources for other business tasks –Although more Norwegian ITO buyers started to multisource their solutions up 39% from 2010.(i.e. distribute the outsourced operations among 2 and more serviceproviders) in 2011 – up 21.9% from 2010 - the prevailing majority of This finding suggests that although the majority of Norwegian outsourcerscompanies still outsource their IT solutions to a single ITO provider. In are still seeking cost reduction and lower-cost resources in their ITOgeneral, this finding marks an emerging trend for multisourcing when more engagements, they also realize outsourcing’s ability to accelerate time tocompanies in Norway outtask their projects to several different vendors product and time to market and release internal resources for other ITbased on their technological expertise, available resource pool, business and/or business related tasks.models used etc.24 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKRegarding the client – vendor relationships, more than 57% of the survey In order to fix their current ITO issues, more than 62% of companies increaseparticipants admitted selecting their ITO partner(s) based on positive face-to-face communication with their vendor’s project management andreferences from peer companies, another 57% - based on own online teams (up 42.5% from 2010), 50% dedicate more management resources (upresearch, almost 30% - on RFP responses and cumulative 14.3% - thanks to 32% from 2010) and almost 38% dedicate more IT resources to theirthe outsourcing consultancy and ITO vendor’s online marketing campaigns. outsourcing operations. In 2011, as many as 25% of ITO buyers considerRegarding the factors that the Norwegian outsourcers consider as the most changing their primary ITO partner to improve the outsourced operations,important ones in their choice of the ITO partner, more than 70% pointed to which is up 13% from 2010.positive peer references (up 51.4% from 2010), more than 62% - successfulpilot/test project completion (up 53.5% from 2010), 50% - sound experience The finding that almost 43% of the Norwegian companies surveyed considerin the similar projects (up 35% from 2010) and another 50% - low service their current ITO partners as unreliable and not focused on mid- to term-long cooperation suggests that in 2011 Norwegian ITO buyers “raise the bar” forrates (up 33% from 2010). their providers and challenge them with more difficult and sophisticatedRegarding the vendor’s size, almost 43% of the Norwegian ITO buyers engage tasks. As a result, only mature and well-prepared providers with realistic HRwith small vendors (less than 50), while less than 15% engage with large growth capabilities and access to complex innovative technologies are ableservice providers (1,000+). This finding is explained by the actual size of the to overcome these challenges and retain clients. Providers who are onlyoutsourcing companies surveyed: almost 60% were small (down 8.2% from focused on winning more new clients and, thus, provide incomplete /2010), while almost 24% were large. Since many large ITO service providers untruthful information in their RFP responses, intentionally overestimateare usually quite process-packaged, hierarchical and bureaucratic, it takes a own project fulfillment capabilities and bid very low, often fail to meet theirwhile to come into a mutually beneficial agreement with them regarding clients’ increased demands. This finding generally suggests that ITO serviceterms of payment, pricing structure etc. Additionally, many small ITO buyers providers will have to modify their engagement models and focus more onfeel more comfortable when cooperating with small providers and have a client retention in the upcoming months.stereotypical belief that small providers are more customer-oriented,compared to the large ones. Regarding the ITO engagement models used by the Norwegian outsourcers, the survey shows that the Own Development Team (when ITO buyers useWhat challenges are facing the Norwegian ITO buyers in 2011 versus 2010? their partners as space and resources providers, but retain maximum projectAccording to the survey results, the top two issues are the delayed delivery management and control, i.e. literally extend their in-house IT teams to theand/or unmet project milestones (up 43.1% from 2010) and poor project lower-cost and resource-abundant locales) is the most popular one inmanagement on vendor’s side (up 32.9% from 2010). Norway, followed by the project-based models. However, the fact that the prevailing majority of Norwegian companies point to delays in deliveryIn 2010, besides the delayed delivery, two other most critical issues were schedules and poor project management on vendor’s side as their biggesttime difference and poor client-vendor communication. ITO challenges proves that the companies either do not use the Own25 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKDevelopment Team model correctly, or simply fail to manage their impressions of the ITO engagements: cumulative 43% believe that providersoutsourced projects in the right way. The following findings support this have more disciplined methodologies that can lower costs down in a longer-suggestion: only less than 15% of Norway’s ITO buyers are fully involved in term perspective, outsourcing their software development has been the rightHR selection process / make the final IT staff hiring decisions (with no decision and it is important to have the vendor’s team located onshore orinterference from ITO partners) and less than 30% know exact salaries of nearshore.each and every member on the outsourced project team and the actualservice fee they pay on top of the salaries (down 0.4% from 2010). It The fact that almost 86% of the Norwegian companies plan to continue withgenerally means that most of the Norwegian IT outsourcers still face the their outsourcing engagements in the next 12 to 24 months proves IThidden agenda / non-transparent pricing in their engagements. On the other outsourcing to be an effective cost reduction, TTM acceleration and overallhand, when asked to compare the actual annual incurred costs to the business development strategy improvement solution.expected (contracted) ones, 57% admitted the actually incurred and Conclusions and Predictionscontracted costs to be about the same (up 29.1% from 2010), 14.3% saidtheir actual incurred costs were up to 25% higher than expected (down Based on the results of the Norwegian ITO and In-House Software25.7% from 2010), 14.3% said their actual incurred costs were 50%-75% Development Survey, several obvious trends were identified:higher than expected (down 4.7% from 2010) and another 14.3% said theiractual incurred costs were 50%-75% lower than expected (up 25% from  More small and mid-market actors start using ITO services in search2010). of innovation and differentiationRegarding the actual cost saving in 2011, the equal numbers of companies –  There is a growing demand for ITO services from innovative lucrative28.6% each – save less than 10%, 10%-24% and 60%+ from their outsourced niches such as mobile computing and digital mediaoperations, while only slightly more than 14% save 25%-39% of operating  Compared to the in-house development companies, more ITcosts. In 2010, most of Norwegian outsourcers managed to save 10%-24% of outsourcing companies manage to increase their annual revenue byoperating costs from ITO (down 22.7% in 2011), while only 12% saved more 1%-9% and 50%+ in 2011than 60% (up 16.6% in 2010). This finding marks a significant increase in  Norwegian ITO contracts become smaller in value and so do projectoverall savings from ITO in 2011. teams  Most of the Norwegian ITO buyers outsource their projects to aWhen asked to assess their level of satisfaction with the current ITO partners, single service provider, so multi-sourcing is not yet a megatrend intheir work quality, ability to meet deadlines and general attitudes, more than Norway85% said they were very satisfied, somewhat satisfied or just satisfied (up9.8% from 2010) and only around 15% said they were very dissatisfied (up3.3% from 2010). This finding generally reflects the Norwegian companies’26 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK  Cost advantage is no longer the major factor considered in the choice generation outsourcing mindsets when it no longer suffices to just of the ITO locale. What is most considered, however, is the offload the project to the 3d party and wait for the turn-key delivery. availability of the appropriate foreign (English) language skills Now companies strive to have a greater control of their outsourced  When choosing their ITO partners, companies are still over- operations influenced by the references from their market peers and  On the other hand, the grand majority of the Norwegian ITO buyers underestimate such important criteria as vendor’s realistic HR scaling are still unaware of the actual salaries their members on the vendor’s capability and flexible and innovative business models allowing project team(s) are paid, which marks a negative trend and suggests companies to have predictable costs and plan their ITO engagements that companies do not know their vendor’s price formation and are, as a long-term corporate IT strategy thus, incapable to avoid extra costs and have predictable costs for  The prevailing majority of the ITO buyers partner with small service future ITO planning providers. This trend explains why some companies are missing The analysis of the above findings as well as the findings of the non- resources on vendor’s side, facing the hidden agenda, poor project outsourcing companies’ survey allows making some forecasts for the future management and poor quality of deliveries. Small providers are, as a development of the Norwegian ITO market: rule, not mature and structured enough to properly manage ITO relationships, innovate and put all of the critical processes in place.  The fact that the grand majority of current outsourcers plan to Nor are they able to hire and retain the most highly-qualified IT continue with their outsourced operations in the next 12 to 24 personnel that prefer to work in stable companies with a well- months suggests that the level of ITO adoption across the Norwegian established track record and able to meet high salary expectations. In industries will not decrease in the near future order to “keep head above the water” and withstand tough  In addition, the fact that there is an obvious demand for ITO services competition on local IT headhunting markets, small and mid-sized from SMEs and innovative niche players suggests that the level of ITO ITO service providers should consider the option of cooperating with adoption is likely to increase in the future. This prediction is the local higher education institutions and universities and creating supported by the finding that more than 33% of today’s in-house in-house tech labs to incubate own IT talent pools from students and development companies in Norway openly indicated considering graduates. However, such initiatives will inevitably lead to the extra outsourcing as a response to their current IT challenges in the future investments and, as a result, will lead to the service fee increase  Considering that high cost / occupancy of domestic IT personnel and (today, low fees are the only advantage that small providers have pressing customers are some of the main barriers in the way of over their larger competitors) successful and efficient in-house development / IT management,  Compared to 2010, this year more Norwegian ITO buyers make final more companies are expected to be forced to adopt ITO in the HR decisions and select IT specialists on vendor’s side to be involved months to come in their outsourced projects. It hallmarks the origination of the next-27 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UK  The fact that cumulative 58.3% of the non-outsourcing survey participants admitted their reluctance to outsource due to the fear of losing own project control and stereotypical belief they are yet too small and immature for such an undertaking suggests that more ITO service providers will have to innovate their engagement models to allow more benefits to SMEs as well as maximum project control retention.  The future drivers of ITO decisions in Norway may slightly change with more companies beginning to outsource in order to share risks, respond to the internal and external pressures to reduce IT budgets and speed up TTM. This trend will result in more ITO buyers focusing on establishing long-term strategic and shared-service partnerships with their service providers  Geographic preferences of the Norwegian ITO buyers are likely to alter in the forthcoming months, as the majority of today’s non- outsourcing companies indicated their intentions to focus on nearshoring rather than offshoring if they make such a decision in the future  Choosing their ITO locale, Norwegian companies will look at legal system / intellectual property law maturity, geographic proximity, foreign language skills’ availability and vast IT resource pool. Thus, intellectual property protection in ITO engagements is likely to become a hot topic in the future outsourcing debate  Regarding the choice of the ITO partner, the future criteria will most probably remain the same as in 2011: most of Norwegian ITO buyers will still rely on the market peers’ vendor references and ignore the availability of formal quality and process maturity certifications such as ISO/CMM or likewise28 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d
  • European IT Outsourcing Intelligence Report 2011: NorwayEuropean IT Outsourcing Intelligence Report 2011: The UKAbout IT Sourcing Europe Our Contacts:IT Sourcing Europe is a UK-based market intelligence company specialized inEuropean IT Outsourcing research and advisory. The Meridian, 4 Copthall House, Station Square Coventry, West Midlands,IT Sourcing Europe provides: CV1 2FL United Kingdom  Top quality quantitative and qualitative IT Outsourcing market Email: info(at)itsourcing-europe.com research and fieldwork services Tel.: +44(0)2476992505  Evaluation of Central and Eastern Europes IT Outsourcing services Web: www.itsourcing-europe.com providers and their factual capabilities to deliver innovative Blog: http://itsourcingeurope.wordpress.com technological solutions on time and on budget Facebook: http://www.facebook.com/pages/It-Sourcing-  Free consulting services for European companies planning to Europe/136082959822709 outsource IT / software development functions and / or change their current IT Outsourcing strategy / engagement Follow our tweets @ITSourcingEurop  Ad-Hoc IT Outsourcing strategy development and full-cycle support SlideShare: http://www.slideshare.net/itsourcingeuropeIT Sourcing Europe cooperates with several European ICT and Outsourcing Registration at the UK Companies House: 07217899organisations in terms of free analytics / information exchange. Amongst itsmajor information partners are Outsourcing Verband, Das OutsourcingJournal, Outsourcing Portal, Ngi and others. You are free to use, share and/or remix any part of this work as long as you attribute it to IT Sourcing Europe.29 | C o p y r i g h t I T S o u r c i n g E u r o p e | 2 0 1 1 | A l l R i g h t s r e s e r v e d