Survey Reveals Major Challenges of Swedish IT Outsourcers

Posted: September 23, 2010 in Market Research

IT Sourcing Europe highlights some of the findings of its Swedish IT Sourcing and Software Development Survey 2010 with regards to the key challenges facing outsourcing companies in Sweden.

IT Sourcing Europe , a UK-based nearshore IT sourcing research and consultancy company, announced today the completion of its Swedish IT Sourcing and Software Development Survey 2010, conducted in the frames of the All-European IT Outsourcing (ITO) Research 2010. The survey was aimed to explore the major trends, challenges and behaviors among the two types of Western European companies – those that outsource their software development to a 3d party offshore, nearshore or within Sweden and those that develop their software/web solutions within own house. The survey was completed by the 148 outsourcing companies representing all of the major verticals from IT and telecommunications to banking and insurance to travel and hospitality etc.

According to the survey findings, the major challenge continuing to face Swedish IT outsourcers is delayed delivery and vendor’s inability to meet with project milestones on time. This challenge was cited by 31% of companies polled. Another 19% pointed to poor project management from vendor’s side among their biggest challenges and 17% said the actual annual incurred costs of the outsourced development far exceed the expected (contracted) ones. An interesting trend was observed: most of the companies pointing to the above three challenges are offshore outsourcers. This finding suggests that it is more difficult to manage the outsourced projects if the development team is located more than 2 time zones away from the home country. On the other hand, companies that outsource their software development nearshore, seem to be more satisfied with their ITO engagements. The greatest concerns of nearshore outsourcers in Sweden are: poor quality of delivered products/services and inappropriate resources from vendor’s side.

As many Swedish outsourcers continue to engage with their vendors via dedicated development center model or captive operations, our survey findings once again support the idea that outsourcing of the future will need more innovative business models, able to allow buyers to have as much control of their outsourced projects and as much transparency in payment transactions as possible.

More thought-provoking findings are available in the Swedish ITO Intelligence Report 2010 which can be downloaded here .

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