Study Shows How European Companies Choose Their Outsourcing Partners

IT Sourcing Europe highlights some of the findings of its All-European IT Outsourcing research 2010 in regard to the key outsourcing destination and vendor selection criteria.

Coventry, United Kingdom, November 24, 2010 --( IT Sourcing Europe, a UK-based nearshore IT Outsourcing (ITO) market research and advisory firm, announced today the completion of its All-European ITO research 2010. The research was conducted between April and November 2010 and aimed to explore the major trends, challenges and problem solving among the European companies outsourcing their software development (SD) function offshore (at least 2 time zones away from the homeland), nearshore (no more than 2 time zones away) and/or within own country. As a result, 1,557 companies from eight countries – United Kingdom, Germany, Austria, Switzerland, Netherlands, Denmark, Norway and Sweden – took part in IT Sourcing Europe’s study.

The study results show obvious similarities and differences in the ways how outsourcing companies from different countries behave in terms of outsourcing destination and vendor selection processes.

According to the study findings, low cost of software development and maintenance is the major factor helping determine where to locate the outsourced development in all countries surveyed except Austria, where the major factor is geographical and cultural proximity. Additionally, Austria shows very high rates of outsourcing nearshore and nearshore and within own country. On the other hand, Austria (along with Norway) shows the smallest ratio of companies outsourcing their SD within own country (only 5% of respondents). Other most frequently cited factors (in all countries surveyed) are: available IT resource and talent pool and positive references. Factors such as political/economic stability, legal system maturity, IP security, strong R&D base and proficient English language skills are considered by companies in the lowest priority.

In order to select an ITO partner, most of the companies surveyed in the UK and Sweden consider low services rates, while most of German, Swiss, Austrian, Dutch and Norwegian outsourcers consider vendor references and positive track record. Availability of specific skills that are hard to find within own country appears to be important for the majority of the UK, German, Dutch, Swedish, Danish and Norwegian companies, while innovative business model is a very decisive factor for German, Swiss, Danish and Norwegian outsourcers.

More interesting and thought-provoking findings are available in IT Sourcing Europe’s “European ITO Intelligence Report 2010: Western and Northern Europe.”

IT Sourcing Europe
Viktor Bogdanov