IT Sourcing Europe reveals the key challenges facing software development outsourcing companies in Austria in 2010.

IT Sourcing Europe, a UK-based nearshore IT outsourcing (ITO) research and consultancy company, has surveyed the 157 Austrian companies in the frames of its Pan-European ITO research 2010 in order to explore this year’s key trends and challenges of the Austrian software development outsourcing.

According to the research findings, the top three challenges of today’s software development outsourcing in Austria are: poor client-vendor communication (16% of respondents), delayed project delivery and missed milestones (15% of respondents) and cultural difference (14% of participants). Other critical challenges and issues cited include: hidden agenda, i.e. when the actual incurred costs of outsourcing far exceed the expected ones (13% of participating companies) and vendor’s inability to understand client’s business goals (10% of companies). Twenty-two percent of the Austrian companies polled point to the following challenges: poor project management on vendor’s side, poor quality of deliveries and the lack of appropriate resources on vendor’s side. Insufficient intellectual property security and vendor’s excessive bureaucracy and complicated hierarchy are considered to be the least critical issues in today’s software development outsourcing in Austria (10% of respondents).

In order to respond to the current challenges, most of the Austrian companies take the following actions: 31% increase face-to-face communication with their vendor’s project management and project teams, 20% dedicate more managerial resources to control the vendor, 17% revise and update vendor management processes by opting to switch to a different software development methodology, relocating own project managers to work temporarily on vendor’s site etc, 12% of companies extend deadlines, 10% claim to bring in outside assistance to improve their vendor relationships, 6% consider partnering with a different vendor able to offer engagement via an innovative and more transparent business model and only 4% of the Austrian outsourcers terminate their ITO contracts and back-source software development back to house.

More thought-provoking and unexpected findings are available in the Austrian ITO Intelligence Report 2010.

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