Major Trends and Challenges among Swiss IT Outsourcers

Posted: September 13, 2010 in Market Research

IT Sourcing Europe highlights the key findings of its Swiss IT Sourcing & In-House Software Development Survey 2010.

IT Sourcing Europe, a UK-based nearshore IT outsourcing (ITO) research and advisory company, announced today the completion of its Swiss IT Sourcing survey, conducted in the frames of the ongoing All-European IT Outsourcing and Software Development Best Practices Research 2010. The survey was completed by the 112 companies with any kind of ITO experience (i.e. companies that outsourced/outsource entire/part of their software/web development function to a 3d party offshore, nearshore and/or within Switzerland). The survey sample represents all of the major verticals from technology and telecommunication to retail to banking to travel etc.  

The survey finds the following key trends to be characteristic of today’s Swiss ITO market:

  • In Switzerland, companies that outsource their software/web development nearshore outnumber those that transfer their software development function offshore by almost twice;
  • First and foremost, Swiss companies engage in ITO relationships to reduce operating costs, to be able to find necessary resources / specific skills that are missing within home country and as a response to pressure from investors/executive management;
  • When choosing an outsourcing destination, most of Swiss companies consider the following factors as first priority: low costs of doing business and development, available IT talent pool and geographical proximity. In their turn, positive references are a major determinant of an outsourcing partner;
  • The majority of Swiss outsourcers actually save no more than 25% from the outsourced development;
  • Most of Swiss outsourcers still fail to gain significant benefits from ITO and achieve state-of-the-art innovation due to the fact that they engage with their partners via traditional models such as dedicated development center (DDC) or Build-Operate-Transfer (BOT), which do not allow having 100% managerial control of the outsourced project and teams and offer rather non-transparent pricing structures (when clients don’t know exactly what they pay for).

According to the survey findings, the following key challenges are facing Swiss outsourcers:

  • Delayed project delivery and unmet milestones;
  • Poor project management from vendor’s side;
  • Actual incurred annual costs exceed the contracted ones (by almost twice in many cases).

The Report arrives at more thought-provoking conclusions that generally shape the Swiss ITO landscape of 2010.Its reduced version can be downloaded for free from here .


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