New research highlights current trends and challenges among the Danish IT outsourcing companies

Posted: July 21, 2010 in Market Research

IT Sourcing Europe highlights the major trends and challenges facing the Danish IT outsourcing companies in 2010.

IT Sourcing Europe, a UK-based research and nearshore IT sourcing advisor company, announced today the completion of its Danish IT Outsourcing (ITO) Survey 2010. The Survey was conducted in the frames of the IT Sourcing Europe’s All-European ITO Research and aimed to explore the current trends, challenges and problem solving strategies among the Danish companies that outsource their software/web development function offshore, nearshore or within Denmark. The Survey was completed by 331 IT and/or corporate decision makers of the Danish outsourcing companies.

The Survey allows us to observe the following ITO trends among the outsourcing companies:

  • In Denmark, nearshore outsourcers outnumber offshore outsourcers by almost twice and this tendency will be continuing in the future.
  • The Top Three reasons why Danish companies choose to outsource their software/web development are: to reduce operating costs; to accelerate time to market via flexibility and scalability and difficulty finding necessary resources within home country.
  • Low costs and vendor’s reputation are the key two factors impacting the Danish companies’ choice of the Outsourcing destination and vendor.
  •  The majority of the surveyed companies report 40%-59% actual savings from the outsourced development.
  • Most of the Danish outsourcing companies do not know the exact salaries of each of their team members on the outsourced development team, meaning that their current ITO engagement does not allow them to have 100% managerial control of project teams and costs associated with Outsourcing.

Among the most frequently cited challenges facing the Danish outsourcers are:

  • Delays in product delivery schedules;
  • Poor communication with vendor’s project management;
  • Cultural difference.

Most companies pointing to the above mentioned challenges are offshore outsourcers, which generally  roves the thesis that it is harder to organize, maintain and improve client-vendor communication, if your back office is located at least 3 time zones away from the home country. On the other hand, companies that outsource their software development nearshore or both nearshore and offshore claim to be more satisfied with their ITO supplier(s) than typical offshore outsourcers.

The Report arrives at more thought-provoking conclusions that generally shape the Danish ITO landscape of 2010.

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