Most of German IT Outsourcers Are Dissatisfied with Their Offshore Providers

IT Sourcing Europe is highlighting the preliminary results of its ongoing German IT Sourcing and Software Development Best Practices Survey 2010.

Coventry, United Kingdom, September 03, 2010 --( According to the preliminary results of the German IT Sourcing and Software Development Best Practices Survey, conducted by IT Sourcing Europe in the frames of its All-European IT Outsourcing and Software Development Research 2010, the majority of German companies that outsource entire/part of corporate software development function to a 3d party are not quite satisfied with their current ITO providers. In-depth analysis of responses allows observing the following pattern: most of the dissatisfied companies outsource their development offshore, i.e. at least 3 time zones away from the home country. Companies that outsource their software development nearshore (i.e. maximum 2 time zones away from Germany) demonstrate much higher levels of satisfaction with the quality of products, services and attitudes received from their ITO partners.

Comparing the preliminary results of the German survey to the results of the completed UK and Danish Surveys 2010, it becomes obvious that the German companies, unlike their UK and Danish competitors, are more flexible towards terminating their failed or failing ITO contracts and either do back-sourcing (i.e. move outsourced operations back to house) or partner with different ITO providers within Germany or nearshore (Central and Eastern Europe). In the UK and Denmark, most of companies, dissatisfied with their providers, try to retain their existing engagements and dedicate more managerial and financial resources to save their contracts from failure.

In Germany, the most frequently cited factors driving dissatisfaction with the outsourced development are the lack of appropriate resources/skills from the vendor’s side, poor communication with the vendor’s project management, vendor’s inability to understand their business needs, time and cultural difference and hidden costs of outsourcing (when the actual incurred costs far exceed the contracted ones).

IT Sourcing Europe will be able to portray a full picture of behaviors of the German IT outsourcing companies and their attitudes towards the outsourced software development soon after the completion of the German survey.

IT Sourcing Europe
Viktor Bogdanov