We have just released the new “German IT Outsourcing Intelligence Report 2012” that is available for free download here. The Report is based on the results of the 3d Annual German IT Outsourcing versus In-House Software Development Survey.

About the Survey

The survey was conducted in November, 2012 among 764 German companies, of which 398 were IT / software development outsourcing companies and 366 – companies developing their IT / software solutions internally.

The Key Takeaways

  • Web and mobile technologies are the most outsourced solutions in Germany, while SaaS/Cloud services are at the bottom
  • Reduction of operating costs is the top factor that drives most of German companies to outsource development
  • Cultural proximity and resource pool are among the main aspects in choosing the outsourcing destination
  • More than 55% of German companies find their ITO partner(s) via online research
  • Onshoring (outsourcing within Germany) is the most preferred outsourcing destination
  • More than 77% of German companies  don’t know the exact salaries of each employee on their outsources development team
  • Among the Top 3 challenges in software development outsourcing are: poor communication with vendor’s project teams, poor project management on vendor’s side and cultural difference
  • “Fixed-price/T&M project” is the most frequently used business model in outsourcing
  • The majority of German companies spend only up to 19% of corporate budgets on IT/software development

We have recently completed our 3d Annual Danish IT Outsourcing (ITO) vs In-House Development Survey 2012 and are ready to share its most thought-provoking findings with you. The survey was conducted between April 17 and May 31, 2012 and was completed by the 695 Danish companies, of which 382 were IT / software development outsourcing companies and 313 – companies developing their IT solutions in-house.

Recapping the results:

Top three drivers of IT Outsourcing in Denmark:

  1. Reduction of operating costs (OPEX)
  2. Focus on core competences and business development
  3. Time-to-market (TTM) acceleration

Top three most decisive factors in the choice of an ITO destination among the Danish companies are:

  1. The available vast IT talent pool
  2. Proficient English language skills
  3. Low costs in general

Top three most decisive factors in the choice of an ITO partner in Denmark are:

  1. Successful test / pilot project completion
  2. Flexible contract terms
  3. Positive references from industry peers

Top three challenges of the outsourced software development:

  1. Poor communication with vendor’s project management / executive teams
  2. Cultural difference
  3. Lack of appropriate resources on ITO vendor’s side

Top 3 ITO business models:

  1. Project outsourcing (fixed price / time and material)
  2. Own software development team
  3. Dedicated Development Center

Nearshore (close to / up to 2 time zones away from Denmark) remains the most popular outsourcing destination (cited by 47% of survey respondents, which is up 10% from 2011). Offshore (2+ time zones away from Denmark) remains the second most popular outsourcing destination (cited by almost 44% of companies, which is up 16% from last year).

Access detailed information here.

We’ve recently completed our 3d Annual UK IT Outsourcing (ITO) vs In-House Software Development Research and compiled some of its most interesting and thought-provoking results in the 2012 UK ITO Intelligence Report. Read the rest of this entry »

IT Sourcing Europe, a UK-based market intelligence company specialized in the European IT Outsourcing market research, announces the launch of the 3d Annual European IT Outsourcing Research 2012.

This year’s survey aims to explore the current degree of penetration of IT Outsourcing (ITO) into diverse European markets, identify the main behavior patterns among the EU companies that outsource their IT / software development function(s) to third parties onshore (within UK), nearshore (up to 2 time zones away) and offshore (2+ time zones away) as well as key challenges facing the European outsourcers. Additionally, the forecasts for the future demand for ITO services / development of ITO industry within the European Union will be made based on the data collected from surveys of the companies that currently develop their IT solutions in-house. Read the rest of this entry »

Despite the last year’s predictions that the European Union is likely to catch up with the United States by the total IT outsourcing (ITO) contracts value in 2011, the factual state of affairs demonstrates a substantial decline in the European outsourcing transaction volumes (both in ITO and business process outsourcing (BPO)). The last Global Services Industry Quarterly Report by Everest Group, one of the world’s leading outsourcing consultancies, determines this decline to make 7% from Q2 2011. On the other hand, IT Sourcing Europe’s country-specific surveys show that the number of the low-value and less asset-intensive outsourced IT/development projects has increased in Europe in 2011, compared to 2010.

The Pan-European IT Outsourcing Intelligence Report 2011 presents the summary of the All-European IT Outsourcing and In-House Software Development research conducted between February and December 2011. In the course of the research the following European countries were surveyed (in alphabetical order): Austria, Cyprus, Denmark, Finland, Malta, Norway, Sweden, Switzerland, Netherlands and United Kingdom. Read the rest of this entry »

We’ve just made another Christmas present for all IT outsourcing trendwatchers by releasing the German IT Outsourcing Intelligence Report 2011. The 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.

Some of the key survey findings presented in the Report are:

  • German B2B software development companies are the most active users of the outsourcing services
  • Most of ITO projects take 3 to 5 IT specialists to complete and are valued at €500K+
  • Web and mobile solutions are most outsourced, while SaaS/Cloud ones are least outsourced in Germany
  • Nearshore is the most preferred ITO destination
  • Most of German companies outsource to reduce operating costs, focus on core competences, access available IT resources outside 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 projects

More interesting findings as well as the 2011 trends and behavior patterns’ comparison to the 2010 ones are available in the actual Report.

We’ve just released the new “IT Outsourcing Landscape Report 2011: Central and Eastern Europe (CEE)” aimed at comparing and contrasting the 6 CEE countries in terms of:

  • capacity for innovation
  • IT labor market efficiency
  • flexibility
  • spending on research & development (R&D)
  • number of IT specialists employed in IT outsourcing industry
  • IT rates
  • Total Cost of Ownership (TCO) of IT project teams

The Report concludes that Ukraine and Belarus are currently holding the equal positions as the leading non-EU, while Romania is the leading EU locale for IT outsourcing services in the CEE region in terms of cost effectiveness, access to innovation and size of IT resource pool available.

The Report is currently available for free download here.

We have just finished a series of the European IT Outsourcing (ITO) and In-House Software Development surveys conducted between February and December 2011. Cyprus is the last EU country to have been surveyed. The survey arrived at the following key conclusions:

  • Cyprus-based B2B IT companies have the greatest demand for ITO services among other industries and verticals
  • The prevailing majority of ITO projects fall under the web development domain, require 1 to 5 IT specialists to complete and do not exceed € 49K in value
  • Multi-sourcing is an obvious trend of 2011
  • Most of the Cyprus outsourcers transfer their development / IT either nearshore alone or distribute them among multiple providers nearshore, offshore and within Cyprus
  • Reduction of operating costs is the core driver of corporate decisions to outsource in Cyprus
  • The key challenges of the outsourced IT / software development in Cyprus are poor communication with vendor’s project management and executive teams and vendor’s inability to understand their clients’ business objectives
  • Key steps that Cypriot companies make to respond to their ITO challenges are ITO partner change, extension of deadlines and dedication of additional managerial resources
  • Most of Cypriot companies manage to save 10% to 24% of operating costs from their ITO endeavors
  • More than 66% of non-outsourcing companies complain about the high cost of domestic IT resources and personnel and more than 33% complain about the scarce local IT resource pool
  • Around 30% of companies already consider outsourcing as an option to leverage costs and access broader resource pools in the future

These and other thought-provoking findings have been compiled in the Cyprus IT Outsourcing Intelligence Report 2011 that is currently available for free download.

The results of the All-European ITO Research 2011 will be presented in the Pan-European IT Outsourcing Intelligence Report 2011 that is expected to be released before December 25th, 2011.

We thank all European companies that dedicated their time and completed our survey questionnaires!

We’ve just released the new “European IT Outsourcing Intelligence Report 2011: Norway” that is currently available for free download here. The Report is based on the responses of the 491 Norway-based companies. The ratio of outsourcing to non-outsourcing companies surveyed was 284 to 201.

Key takeaways:

  • The greatest demand for ITO services in Norway comes from B2B software development companies
  • Most of ITO projects take 3 to 5 and 10 to 19 IT specialists to complete and are valued at€ 0-199K
  • Web solutions are most outsourced, while Cloud computing is least outsourced in Norway
  • Most of the Norwegian companies single-source offshore or onshore
  • Most of the Norwegian companies outsource to reduce operating costs, accelerate time to market, access IT staff 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 services

More thought-provoking findings are available in the Report.

IT Sourcing Europe and the German-Austrian-Swiss Outsourcing Association (Der Outsourcing Verband) announce the launch of a series of joint video podcasts on “Analysis of the German IT Outsourcing Market 2011″. Subscribe here to watch Part 1: “Introduction to the German IT Outsourcing Market”, in which Viktor Bogdanov, IT Sourcing Europe’s Managing Director and Stephan Fricke, CEO of German-Austrian-Swiss Outsourcing Association, discuss

  • adoption of ITO services across diverse German industries
  • general profile of German ITO service buyers
  • factors that drive German companies to outsource their IT / software development functions to external providers onshore, offshore and/or nearshore
  • key ITO challenges and solutions

All questions and remarks can be left as comments right below the videocast  and will be replied as soon as possible.

Alternative videocast link - http://www.outsourcing-journal.org/german-market-ito.html