Forresters Webinar 05.13.2010
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1) The document discusses how European firms are seeking nearshore options closer to home to reduce risks associated with offshore outsourcing. 2) Spain is emerging as a credible nearshore destination for European firms due to its large skilled IT labor pool, lower costs compared to countries like India, and cultural affinity with Europe. 3) The document advocates that European firms consider Spain as an alternative or complementary location to India for global delivery strategies due to Spain's strengths in areas like domain expertise, potential to scale in Latin America, and locality advantages for European clients.
Forresters Webinar 05.13.2010
- 2. Valueshore Euan Davis Principle Analyst Forrester Research September, 2009
- 3. 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 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 3 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 4. Agenda Why executives need global delivery strategies Firms move nearshore to solve offshore issues Spain emerges as a credible offshore destination 4 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 5. Europeans vote with their wallets Desire to increase applications and infrastructure outsourcing Watch for a surge in leveraging global service delivery 5 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 6. 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 maximize the timely delivery of superior IT and BPO solutions 6 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 7. Service scope sticks on application work 7 Entire contents 息 2009 Forrester Research, Inc. All rights reserved. August 2009 How Europeans Tune Global IT Service Delivery Models
- 8. Agenda Why executives need global delivery strategies Firms move nearshore to solve offshore issues Spain emerges as a credible offshore destination 8 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 9. 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 its an offshore location does not make it so 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 9 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 10. Aggressive blends exacerbate internal risks External risks External risks compound internal risks External risks Time zone Lack of governance Vendor differences Lack of management stability Weak IT processes/outsourcing process maturity (requirements gathering, change Cultural and Country language management, specification writing, infrastructure differences testing/QA, SLAs, documentation) Internal customers unprepared for the Management rigidity of the outsourcing relationship Governance challenges Improper project selection Unrealistic expectations No recognition that vendors lack business Distance to Security knowledge vendor Source: Forrester Research 10 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 11. 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 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? 11 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 12. Agenda Why executives need global delivery strategies Firms move nearshore to solve offshore issues Spain emerges as a credible offshore destination 12 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 13. Skills, scale and location underpin Spains appeal Large skilled IT labour pool Check out the ratios Industrialized software factories Check out how the rates compare 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 13 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 14. IT salaries feed lower rates 14 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 15. Graduates feed a large local IT labour Pool 15 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 16. 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 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 16 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 17. Spain as an alternative to India? Decision steps 17 Entire contents 息 2009 Forrester Research, Inc. All rights reserved. February 2009 Complementing India With Nearshore Strategies: Spotlight On Spain
- 18. Spain as a source of complementary skills? Do your internal preparation Make sure you have a transformation roadmaphow you will move Make sure you have sufficient sourcing deal governance Operational control of the nearshore service delivery model 18 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 19. 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 Drive discounts on a deal with location rebates Seek out local support organizations For advice and back up Value shore team; Invest in Spain 19 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 20. If you remember nothing else Global delivery is used in most large 1 outsourcing deals 2 European firms need nearshore options Spain offers a credible nearshore 3 destination 20 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 21. Thank you Euan Davis eudavis@forrester.com Complementing India With Nearshore Strategies: Spotlight On Spain: http://www.forrester.com/Research/Document/0,7211,46904,00.html Value Shore valueshore@valueshore.org www.valueshore.org 21 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.
- 22. Final Questions, Comments, Discussion? 22 Entire contents 息 2009 Forrester Research, Inc. All rights reserved.