IT Sourcing EuropeEuropean IT Outsourcing     European IT Outsourcing MarketIntelligence Report 2011:             Intellig...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKContents ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKSurvey Ov...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKThe follo...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKProfile o...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK         ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKRevenue G...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK         ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK         ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK         ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK  Factors...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKIT Outsou...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKClient – ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK    Servi...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKIT Outsou...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKHow Actua...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKImpressio...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKFuture Ad...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK        K...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK         ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKCircumsta...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK     Fact...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKHow Compa...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKKey Findi...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK2010) and...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKconsider ...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKConclusio...
European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKAbout IT ...
Upcoming SlideShare
Loading in …5
×

German IT Outsourcing Intelligence Report 2011

2,988 views

Published on

This Intelligence Report is based on the survey of the 304 German companies that either outsource their Software Development / Information Technology function(s) to an external service provider onshore (within Germany), 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

Published in: Business, Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,988
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
296
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

German IT Outsourcing Intelligence Report 2011

  1. 1. IT Sourcing EuropeEuropean IT Outsourcing European IT Outsourcing MarketIntelligence Report 2011: IntelligenceGermany October 2011
  2. 2. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKContents Executive Summary This Intelligence Report is based on the survey of the 304 German companiesContents .......................................................................................................... 2 that either outsource their Software Development / Information TechnologyExecutive Summary ......................................................................................... 2 function(s) to an external service provider onshore (within Germany),Survey Overview ............................................................................................. 3 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.Key Takeaways From the Survey ..................................................................... 4Profile of Outsourcers ..................................................................................... 5 The Report aims to help German outsourcing companies:IT Outsourcing Drivers & Factors ................................................................... 10 Get an in-depth understanding of the current IT Outsourcing demandsIT Outsourcing Challenges & Problem Solving ............................................... 12 and trends See what challenges are facing their market peers / competitors andClient – Vendor Relationships ....................................................................... 13 how they respond to themIT Outsourcing Costs...................................................................................... 15 Revise / improve their current IT Outsourcing engagements / business models based on the industry best practicesImpressions of IT Outsourcing ....................................................................... 17Future Adoption of IT / SD Outsourcing in Germany ..................................... 18 The Report aims to help German non-outsourcing companies:Key Findings At a Glance ............................................................................... 24 Better understand modern software development/IT costs optimizationConclusions ................................................................................................... 27 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
  3. 3. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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 German IT Outsourcing (ITO) and In-House Software Development (SD) the following steps were taken:survey was conducted between September 10 and October 7, 2011, in the Online press releases and survey announcements distribution;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 German 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 German companies away from outsourcing The following ‘outsourcing activity’ is referred to in the 2011 German ITO their SD/IT function(s) Report: Compare and contrast the 2011 and future ITO demands across German 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)Germany-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
  4. 4. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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; Most of German companies surveyed began to outsource their IT Data warehousing; function / software development more than 37 months ago IT security; B2B software development companies are the most active users of Data / voice network operations; the outsourcing services Remote IT infrastructure management Most of ITO projects take 3 to 5 IT specialists to complete and are valued at €500K+These categories further fall under the five key areas of expertise: Web and mobile solutions are most outsourced, while SaaS/Cloud Web (Web 2.0, .NET, Java, PHP, open source etc); ones are least outsourced in Germany Enterprise 2.0 (J2EE, J2SE, C#, MySQL etc); Nearshore is the most preferred ITO destination Mobile development (J2ME etc); Most of German companies outsource to reduce operating costs, Embedded development; focus on core competences, access available IT resources outside Software as a service (SaaS) and Cloud Computing Germany and speed up time-to-market The key issues in ITO are poor communication with vendor’s teams, change management, cultural difference and poor project management on vendor’s side Most of German companies outsource their IT / development to small providers via the fixed-price/time-and-material (T&M) models Most of companies refuse to outsource, because they want to have 100% managerial control of own software / IT projects4|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  5. 5. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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
  6. 6. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK Company Size (Headcount) Primary Industry *All other responses: manufacturing, government, transportation, hospitality, tourism, IT (hardware)6|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  7. 7. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKRevenue Growth Expectations Outsourcers In-House Development Companies7|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  8. 8. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK Size of Project Team on Vendor’s Side (Headcount) Value of the Outsourced Project(s)8|Copyright IT Sourcing Eur ope | 2011 | All Rights res erved
  9. 9. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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
  10. 10. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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
  11. 11. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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
  12. 12. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKIT Outsourcing Challenges & Problem Solving Key Challenges of the Outsourced IT / Software Development Key Responses to the ITO Challenges*All other responses: language barriers ,hidden agenda, lack of transparency12 | 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
  13. 13. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKClient – Vendor Relationships Vendors’ Size How Companies Found Their ITO Vendors*Other: personal networking13 | 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
  14. 14. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK Service Delivery Models Used In the Outsourcing Engagements Who Hires IT Talent To Be Involved In the Outsourced Project Execution?*Other: elancer-team.de etc14 | 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
  15. 15. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKIT Outsourcing Costs Do Companies Know Exact Salaries of Their Project Team Members Levels of Companies’ Satisfaction With Their Current Vendors and On Vendor’s Side? The Quality of Services Provided15 | 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
  16. 16. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKHow 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
  17. 17. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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
  18. 18. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKFuture Adoption of IT / SD Outsourcing in Germany Do Companies Plan to Continue Outsourcing Their Projects In The Future Outsourcing Destinations Next 12 To 24 Months?18 | 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
  19. 19. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK Key Challenges of the In-House Software Development How In-House Developers Respond To Challenges*Other: lack of strong IT management within the company, poor communication of *Other: hire more internal resources, revise IT budgets, dedicate more financialbusiness goals to software developers, wrong software development methodology resourcesetc19 | 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
  20. 20. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK Reasons Keeping Companies Away From ITO20 | 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
  21. 21. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKCircumstances 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 Future21 | 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
  22. 22. European IT Outsourcing Intelligence Report 2011: GermanyEuropean 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 Destination22 | 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
  23. 23. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKHow Companies Would Search For Their Outsourcing Partners If TheyMake A Decision To Outsource Their IT / Development In The Future23 | 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
  24. 24. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKKey Findings At a Glance mobile (up 42.2% from 2010). Cloudsourcing remains the least popular type of outsourcing (up 2.5% from 2010).Of the 304 companies surveyed, 140 were outsourcers and 164 were in- The research further shows that the prevailing majority of Germanhouse software development companies. Of the 140 outsourcing companies, outsourcers partner with more than one ITO service provider (or multi-the prevailing majority have been outsourcing their IT solutions for more source).than 37 months now, which proves outsourcing to have been utilized as a In 2011, nearshore remains the most preferred ITO destination for thesurvival tactic by many companies in Germany at the time of recession. In German clients (up 1.5% from 2010), onshore is second most preferred hub2011, 42.7% of companies surveyed were small (less than 50 by headcount) (up 6.1% from 2010) and offshore is the least preferred destination (down(down 8.3% from 2010), 46.3% were mid-sized (50-599) (up 10.3% from 15.3% from 2010).2010) and 20.4% were large (600+) (up 7.4% from 2010). The greatest ITOdemand comes from software companies specialized in the B2B segment, The top three drivers of ITO decisions in Germany are reduction of operatingfollowed by B2C IT companies and professional service providers (e.g., legal, costs (up 42.3% from 2010), focus on core competences (up 12.7% fromaccounting, real estate, consulting etc). Manufacturing, government, 2010) and shortage of domestic IT skills and resources (up 23.8% from 2010).transportation, hospitality, tourism, IT (hardware) are the least active ITOadopters. As the survey shows, the top three most important factors that German ITO buyers consider when choosing their ITO locale are language skills (up 41%Comparing the annual revenue growth expectations in 2011, the majority of from 2010), available IT talent pool (up 50.5% from 2010) and low costs (upoutsourcing companies anticipate growth by 10% to 19% and almost 5% 26.7% from 2010).expect revenue growth by 50% and more. On the other hand, the majority ofnon-outsourcing companies in Germany expect the 1%-9% annual revenue The top three most decisive factors in the choice of the ITO partner aregrowth, while more than 10% expect their revenue to have no increase at all. successful test/pilot project completion (up 57.6% from 2010), sound experience in similar projects (up 44.7% from 2010) and flexible contractAs the survey finds, most of outsourcing companies surveyed have 3-5 IT terms (up 57.7% from 2010).specialists involved in the outsourced project execution (augmented staff onvendor’s side), while almost 12% have 30 and more employees in augmented The top three challenges of the outsourced IT / software development are,staff. Regarding the value of the outsourced projects, 35% of German according to the survey results, poor communication with vendor’s projectcompanies outsource projects worth of EUR 500K+ (up 27% from 2010) and management and executors (down 9% from 2010), change management and25% outsource projects worth of EUR 0-49K (up 14% from 2010). Web is the cultural difference (up 10.3% from 2010). The top three responses to thesemost outsourced area of expertise in 2011 (up 44.7% from 2010), followed by and other challenges are increased face-to-face communication between clients and ITO partners (up 17% from 2010), multi-sourcing (up 26% from24 | 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
  25. 25. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UK2010) and dedication of more management resources (up 9% from 2010). In almost 37% think their decision to outsource has been the right one and2011, 15% of German outsourcers bring / plan to bring outsourced almost 32% believe that although outsourcing does save operating costs, itoperations back in house (back-source), which is up 14% from 2010. inevitably raises the management costs. On the other hand, almost 22% of companies are very dissatisfied with their decision to outsource, almost 16%Regarding the actual search for ITO partner, more than 40% of companies say that actual costs are higher than expected and slightly more than 5%surveyed asked peer companies for references, cumulative 25% release think their intellectual property is currently at risk.RFP/RFQ publicly, did online research and found the partner via personalnetworking, while only nearly 20% hired an outsourcing consultancy to assist Based on the most frequently cited challenges of the outsourcedin finding the partner and/or were approached by the future partner via development, companies that regret their decision to outsource havetelemarketing calls, newsletter or likewise marketing activities. The prevailing problems managing the internal change that occurred as a direct response tomajority of German outsourcers partner with small ITO service providers their outsourcing activity and may thus be having some negative impressions(less than 50), while only 12.5% partner with large organisations (1,000+). because of own inability to properly articulate the change to all stakeholders and to manage the outsourcing processes.Regarding the service delivery models used in ITO relationships, a project-based model is the most widely used one, followed by DDC and Own Regarding the reasons that keep companies away from ITO, almost 50% doDevelopment Team models. Although 50% of companies are partly involved not want to lose managerial control of their software/IT project(s) (up 17.1%in the process of HR selection run by their ITO partners, almost 53% do not from 2010), almost 35% do not want to put their intellectual property at riskknow each and every member’s remuneration on vendor’s side. (up 25.3% from 2010) and nearly 26% believe they are yet too small and immature to outsource. In 2011, slightly more than 11% of surveyIn 2010, the majority of German outsourcers were dissatisfied with the participants consider outsourcing as an unethical practice that takes jobs outquality of vendor’s work (41%), but in 2011 most of companies are very of the national boundaries, which is up 9% from 2010.satisfied with their decision to outsource (almost 37%). Analyzing the results of the survey of non-outsourcing companies, the topThe survey demonstrates that in most cases the actual annual incurred costs three issues of the in-house development are: high cost of German ITof outsourcing match the contracted ones and nearly 33% of companies resources (up 10% from 2010), scarce local IT talent pool (up 26% from 2010)surveyed report saving 10% to 24% of operating costs thanks to outsourcing. and pressing customers. To respond to these challenges, in-houseQuite a big percentage of companies – almost 16% - save 60% and more of development companies continue to extend project deadlines (up 19% fromtheir corporate budgets. 2010), improve/change software development methodology (down 3.4%Overall, German outsourcing companies have rather positive impressions of from 2010) and encourage internal staff to work overtime (down 6.8% fromthe outsourced development/IT: almost 43% believe it is important to have 2010). Alternatively, almost 15% of non-outsourcing companies surveyedthe ITO partner located on- or nearshore (in a geographically close area),25 | 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
  26. 26. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKconsider outsourcing some parts of their software development / IT functionin the near future (up 12% from 2010).As the survey shows, current non-outsourcers are very likely to outsource inthe next 12 to 24 months to make their capital funds available, respond tointernal and external pressures to lower down IT budgets and access highlyqualified yet lower-cost IT resources outside Germany. Nearshoring is goingto be the most popular ITO destination, followed by onshore outsourcing.The survey of non-outsourcing companies allows benchmarking the futuredemand for / trends of the outsourced IT / software development inGermany.Regarding factors that today’s non-outsourcers would consider as the mostimportant ones in their future choice of the outsourcing locale, the highestrated ones are language skills, legal system and IP protection maturity,available IT talent pool and political and economic stability. This findingsuggests that in the future most of German outsourcers will focus more onsecuring their outsourced operations and copyright and will set higherexpectations for the country of work transfer.Regarding factors that are likely to be decisive in the future choice of the ITOpartner, the highest rated ones are provider’s ability to successfully completethe test/pilot project, sound experience in similar projects/technologies andpositive references from peer companies. This suggests that the futureprocesses of selection of ITO partner(s) will remain almost unchanged andthe future German outsourcers will rely on peers’ outsourcing best practicesthe same way they do nowadays.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
  27. 27. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKConclusions proves that companies planning to outsource should “sell” the idea to all departments, from top to bottom, and get mutual understanding of the outsourcing goals prior to signing any ITO agreements. Additionally, specificThe Second Annual German IT Outsourcing and In-House Software change communication initiatives should be created and implemented atDevelopment Survey 2011 allows tracking the ways the German ITO market every single stage of the project execution.has progressed and/or altered over a 12-months period. The fact that almost 15% of today’s non-outsourcing companies in GermanyCompared to 2010, in 2011 more companies outsource their IT / software are already planning to outsource to respond to the high cost / shortage ofdevelopment function(s) in order to focus on core competences such as domestic resources, pressing customers and slow time-to-market provesproduct placement/marketing, business development, differentiation etc. outsourcing to be used more extensively in the months to come. However,The number of companies that transfer their development nearshore has future ITO buyers will challenge their providers to develop and implementslightly increased, while the number of offshore outsourcers has decreased more innovative service delivery models to be able to retain maximumsignificantly in 2011. More outsourcers also multisource nearshore, offshore control of the outsourced projects and have predictable costs for furtherand onshore as a response to such challenges as poor quality of deliveries planning of their ITO strategy.and delayed and/or unmet project milestones.In 2011, language skills become another important factor used in the choiceof the ITO destination, while flexible contract terms become an importantfactor in the choice of the ITO partner. Today’s companies look for easy exit /back-sourcing and sufficient copyright protection terms in their ITOcontracts.Delayed delivery and hidden agenda are no longer the key ITO challenges in2011. This year, a communication gap between ITO buyers and providers isthe major issue in most of the ITO transactions. The fact that 50% of alloutsourcers in Germany do not have appropriate communication withproject management/executive teams on their vendor’s side proves thatmany German companies still use wrong business models and/oroverestimate own abilities to do the sufficient audit of IT needs and/ordevelopment processes to be outsourced. On the other hand, changemanagement being the second most critical issue in many ITO engagements27 | 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
  28. 28. European IT Outsourcing Intelligence Report 2011: GermanyEuropean IT Outsourcing Intelligence Report 2011: The UKAbout IT Sourcing Europe Our Contacts:IT Sourcing Europe is a UK company specialized in nearshore IT Outsourcingconsultancy, market research and analysis. 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 Registration at the UK Companies House: 07217899IT Sourcing Europe cooperates with several European ICT and Outsourcingorganisations 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.28 | 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

×