Forresters Webinar 05.13.2010
-
Upload
value-shore -
Category
Business
-
view
721 -
download
0
Transcript of Forresters Webinar 05.13.2010
Valueshore
Euan Davis Euan Davis Principle AnalystForrester Research
September, 2009
Talking points
• Recessionary pressure continues to dominate IT spending
• New ways of contracting emerge linked to sourcing maturity
• Firms seek common service essentials from globally
3 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
configured sourcing deals
• Offshoring no longer just equals “India” but many European minds fixate on the Indian pure-plays
• Clients seek to reduce risk and investigate near-shore options closer to home
Agenda
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
4 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Desire to increase applications and
infrastructure outsourcing
Europeans vote with their wallets
5 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Watch for a surge in leveraging global service delivery
outsourcing
Understanding Global Delivery
► Integrating rich domain expertise, broad technical skills, and project management discipline across a network of low-cost locations through consistent and robust processes, tools, and infrastructure to
6 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
processes, tools, and infrastructure to maximize the timely delivery of superior IT and BPO solutions
Service scope sticks on application work
7 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
August 2009 “How Europeans Tune Global IT Service D elivery Models”
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
Agenda
8 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
The changing offshore location dynamics
• Many countries are jumping on the offshore bandwagon as an economic development strategy
• But just because the Economics Minister says it’s an offshore location does not make it so
• Country assessments focus on government stability
9 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
• Country assessments focus on government stability and infrastructure quality
• But not important issues like cultural affinity for offshore work and the scale and health of indigenous vendors
Time zonedifferences
External risks
Countryinfrastructure
• Lack of governance• Lack of management• Weak IT processes/outsourcing process
maturity (requirements gathering, change management, specification writing, testing/QA, SLAs, documentation)
External risks compound internal risks
Cultural and language
differences
Vendor stability
External risks
Aggressive blends exacerbate internal risks
10 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Security
Managementchallenges
• Internal customers unprepared for the rigidity of the outsourcing relationship
• Improper project selection• Unrealistic expectations• No recognition that vendors lack business
knowledge Distance to
vendor
Governance
Source: Forrester Research
European firms seek nearshore skills
• Some countries are more mature than others
– Mature nearshore delivery hubs in Eastern Europe
– Russia rich in software development expertise
– Spanish industry expertise
• Many European service providers focused on Poland
11 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
• Many European service providers focused on Poland
– Pure plays have gone further East
• What counts in deciding a nearshore location
– Country stability; infrastructure quality, cultural affinity and the quality of local labour count
• What about Spain?
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
Agenda
12 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Skills, scale and location underpin Spain’s appeal
• Large skilled IT labour pool
– Check out the ratios
• Industrialized software factories
– Check out how the rates compare
13 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
• Domain expertise
– Check out the large firms punching above their weight
• Potential to scale with Latin America
– Spain/Latin American delivery model offering skilled pool
IT salaries feed lower rates
14 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Graduates feed a large local IT labour Pool
15 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Which firms should consider a move to Spain
• Spain as an alternative to India
– Make an inventory of current applications
– Document current best practices
– Pilot applications with the right critical mass
– Invest in the business analyst function
16 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
– Invest in the business analyst function
• Spain as a source of complementary skills
– Specific functional process expertise
– Investigate the industry and IT service capabilities
– How can the model scale through Latin America
Spain as an alternative to India? Decision steps
17 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
February 2009 “Complementing India With Nearshore Strategies: Spot light On Spain”
Spain as a source of complementary skills?
• Do your internal preparation
• Make sure you have a transformation roadmap—how you will move
• Make sure you have sufficient
18 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
• Make sure you have sufficient sourcing deal governance
• Operational control of the nearshore service delivery model
Focus on the site visit and locality for success
• Site visits are an essential part of the sourcing process
– Meet them on Spanish soil
• Leverage the regional autonomy
– Offers negotiation levers on business tax rates
19 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
– Offers negotiation levers on business tax rates
– Drive discounts on a deal with location rebates
• Seek out local support organizations
– For advice and back up
– Value shore team; Invest in Spain
If you remember nothing else
European firms need nearshore options2
Global delivery is used in most large outsourcing deals1
20 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Spain offers a credible nearshore destination
3
Euan Davis
Complementing India With Nearshore Strategies:
Thank you
21 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
Complementing India With Nearshore Strategies: Spotlight On Spain: http://www.forrester.com/Research/Document/0,7211,46904,00.html
Value Shore
www.valueshore.org
Final Questions, Comments, Discussion?
22 Entire contents © 2009 Forrester Research, Inc. All rights reserved.