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Forresters Webinar 05.13.2010
1.
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 © 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 © 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 © 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 © 2009 Forrester Research, Inc. All rights reserved.
7.
Service scope sticks
on application work 7 Entire contents © 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 © 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 it’s 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 © 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 © 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 © 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 © 2009 Forrester Research, Inc. All rights reserved.
13.
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 • 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 © 2009 Forrester Research, Inc. All rights reserved.
14.
IT salaries feed
lower rates 14 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
15.
Graduates feed a
large local IT labour Pool 15 Entire contents © 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 © 2009 Forrester Research, Inc. All rights reserved.
17.
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: Spotlight On Spain”
18.
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 sourcing deal governance • Operational control of the nearshore service delivery model 18 Entire contents © 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 © 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 © 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 © 2009 Forrester Research, Inc. All rights reserved.
22.
Final Questions, Comments,
Discussion? 22 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
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