CIO magazine is usually a good place to explore future trends that will affect the global IT industry and right at the end of 2016 they published a good list of issues affecting IT outsourcing. We are already a month or so into 2017, but it’s still worth taking a look at this list of ten key trends that anyone in the IT outsourcing area needs to be aware of.
From the ten, the three that really stood out for me were:
1. Security; more than ever, security is a major concern. Companies can fail because of security breaches and with links between companies under scrutiny this requires a strategy that explores people, processes, and technology.
2. Automation; more services are being delivered automatically and more customers will expect to see IT costs reduced with an increased delivery because of automation.
3. Cloud; it’s about far more than just raw power and storage. Entire critical services are now cloud-based and it’s becoming unusual for companies to want anything other than a cloud-based solution now.
The CIO list also suggested that IT suppliers will pivot and start offering additional services, such as consulting, but I would suggest that this is just part of a wider change taking place.
We are moving on from a traditional client and supplier type outsourcing arrangement to partnership or co-sourcing. I know that suppliers have talked for years about partnership, but I mean genuine partnership where the contract between companies is not strictly about what can be delivered, it includes provisions for how to innovate and how to make the deliveries better. If the two companies start working together, rather than one just selling a service to the other, then we are no longer talking about pivoting services, there is the potential to build new products and services together – as if the two companies are functioning as one.
That’s going to be one of the biggest changes in IT outsourcing in 2017 and I’ll comment more on how this might work in one of my next blogs.
by IBA Group for IBA Group
Posted on January 31, 2017
In an interview to the TTG magazine, Aleš Hojka, CEO of IBA CZ and IBA Slovakia, speaks about solutions and services that any company can benefit from.
When I look at your business card, IBA strongly resembles IBM, doesn’t it?
You are right. Originally, IBA was founded in Minsk in 1993 as a joint venture with IBM. The brand and logos of the company are deliberately similar and as IBA was growing, it shifted to a direction different from IBM. New branches emerged, the first one was created in the Czech Republic, and the product portfolio has changed considerably. Although today IBM does not own any of the IBA Group branches, a very close cooperation continues.
For IBM, we implement both internal projects, for example one of the most remarkable is the Learning Portal, as well as other within our core expertise in portals and mainframe. In cooperation with IBM, we work for the end customers and bring them the best of both companies. Anyway, now we operate as two separate entities in the Czech Republic being even competitors to some extent.
Worldwide, IBA has over 2,500 employees with about 120 in the Czech Republic and still expanding. We have our own development centers in Prague, Brno, and Ostrava. The entire IBA Group is headquartered in Prague and now has offices in 11 countries, including the United States and South Africa, with IBA Slovakia among the youngest.
So what is the crucial area of your activity?
We dominate in portals, document management, mobile applications, and more. Most often, we use Java and .NET, though not avoiding enterprise and open source solutions, but mainly listen to our customers and assist them while providing deployment and maintenance of our solutions in their environment.
Whom do you mostly supply the solutions and what can we expect from them?
Our customers are large financial institutions, telecom operators, and government institutions, as well as manufacturers and distribution companies. Primarily due to our own development, we can offer advanced solutions for a company of any size.
For example, for Česká pojišťovna, we have developed a part of a mobile application that helps people deal quicker with car accidents. To be more specific, it finds the nearest service station, facilitates provision of all data that the insurance company may need, and etc. For T-Mobile, we have created an intelligent contact form with a prompter that allows for self-servicing in most cases. As soon as the user has finished typing a request, an answer is suggested, as well as other information that might be of interest. With our solution, T-Mobile receives roughly by 30% of emails less, which is a huge number and great cost savings on their call center operations. For the Generali insurance company, we provided a secure online consolidation of insurance with suggestions throughout the process. For Moneta, we created a fully responsive loyalty portal Bene +. The content adapts to the screen size of a device, either a mobile, tablet or desktop, with no need of development for each platform separately.
And what is your activity in the tourism sector? Do you have any customers in this area?
Not yet, though indirectly, we actually operate there as well, for example, within the projects for the regional authorities or the National Heritage Institute. But as I say, we are capable of meeting the requirements of any customer. Document management is used almost everywhere. Let’s say, a solution intended for invoice workflow covers the whole lifecycle from scanning a document to the data entry via processing, approval only after payment, and archiving, with all the stages automated and transparent.
Or the so-called Big Data, which is the processing of large volumes of data and keeping track of customer behavior. When a user logs into a social network where there’s a lot of personal data and then visits some other website, these tools recognize the user and offer him or her an advertisement of related products, for example, on news portals. For travel agencies and rental companies, we can offer the integration of their systems into a large retrieval system like Booking.com or TripAdvisor. Identity Management may also be of great necessity, thus providing security system and preventing unauthorized user access.
This system facilitates the work of administrators and also makes personal client data safe from leakage.
For the customers engaged in tourism, we can offer the services where we are truly the market leaders. From simpler websites and intranets with e.g. a review of attendance through complex client loyalty portals where each user sees different data, to the solutions like an anti-corruption subportal that we have created for the Department of Defense and that guarantees absolute anonymity. A portal may also serve as a planner of human resources, which could be useful especially for companies with a large or frequently changing number of permanent or temporary employees.
Integration with social networks may also be of interest. Our expertise on how to use the information that people make available on a variety of networks for targeted advertising may be useful everywhere, including the tourist sector.
The British technology magazine Computer Weekly recently published analysis by Professor Ilan Oshri of Loughborough university on how the European nearshoring market is adjusting to a more mature environment. In particular how different markets are aiming to distinguish themselves from the pack.
I wrote about this research from Loughborough university last month, but the constant push to regionalisation rather than globalisation – as I mentioned in my last blog – made me find this research again. In the context of the political activity in Europe and the USA, this is worth visiting again as it is taking on increased importance.
Anyone who has attended a nearshoring or outsourcing conference in Europe knows how the various regions promote themselves. PowerPoint slides are loaded full of statistics demonstrating government support, a steady flow of graduates, great local companies, and a low cost of doing business. In most cases though, the consistently positive messages from one presentation could be used by another country without anyone noticing that the message had changed – because the message in each pitch is largely the same.
Professor Oshri suggests that we should take it as read on the basic measure. Most European countries have good airports and a supply of graduates, so anyone considering nearshoring will be looking at other factors – the companies and trade bodies in those regions should appeal to these factors:
– Higher Value; what higher value can working in your region offer? What sets your companies or country apart? Are there particular industries you excel in or skills that are hard to find?
– Ability to partner; suppliers today need to move on from the traditional client-supplier relationship and become a part of the value chain. They need to be true partners, not just hired help.
– Innovation; many companies today are looking to their suppliers for advice on innovation. Innovating throughout the supply chain is becoming much more common – are you able to innovate for your clients?
In short, Professor Oshri is suggesting that when companies look to nearshoring regions they are looking for much more than just a low cost place to do business. If you are still marketing your region as low cost with a great airport then you might be losing business just because you are not looking ahead to the type of relationship companies really want.
In an environment where managers are thinking in detail about how to ensure processes are closer to home, this is more important than ever.
Try thinking of how your location is different. What differentiates you from the others? Focus on this, even if it is a niche difference. It will make all the difference in a nearshoring market that is growing fast as companies focus more on developing regional partners rather than long distance offshoring.
by IBA Group for IBA Group
Posted on January 16, 2017
There was an interesting analysis of the trend towards regionalisation published in business magazine Forbes just before the recent holiday season. It explored how the Brexit vote in the UK and the election of Donald Trump as the US president might change business behaviour.
Politics went through something of a shock in 2016 and 2017 may hold further surprises in Europe with elections in the Netherlands, France, Norway, the Czech Republic, and Germany all coming soon…
But what does Forbes mean about a change in business attitudes and how does it affect those in the IT business?
The answer lies in the growing nationalism seen in the USA and many European countries. There is a growing desire to show that jobs are being created and managed close to home, or at least closer to home than before.
In European technology circles this is likely to manifest itself with less trust in technology suppliers from Asia – particularly China and India. Many of these companies are highly professional leaders in their industry, but as consumers start becoming more wary of strategies such as outsourcing and offshoring, it is likely that managers buying IT services will look closer to home. As Forbes suggests, the trend will be towards European regionalisation, not globalisation.
It is unlikely that markets such as the UK or Germany will create enough new technology professionals to ensure all work can be performed locally – and the cost would be prohibitive for most organisations anyway – but these consumer attitudes will favour technology companies in Eastern Europe.
The Central and Eastern Europe (CEE) region has long marketed itself as a European alternative to China and India. Allowing European companies to work with partners that are close enough for a day trip to be possible. Now they will have an additional advantage, the growing political and social unrest about long distance offshoring.
It’s good news for European technology companies as Europe remains close – organisations in Europe buy 69% of their goods from other European companies. The USA may be a more complex scenario as President-elect Trump has already talked about scaling back drastically on the H1B visa that most foreign IT professionals use when working in the US.
Whatever happens with the politicians, the direction of travel is clearly towards nearshoring as a preferable solution. The era of the world being completely flat appears to be over. Welcome to an era of regionalisation.
by IBA Group for IBA Group
Posted on December 19, 2016
The Big Data market has transformed how most IT services are bought and sold. Often the customer is a business leader, rather than the CIO, and services are already available, rather than needing to be designed from the ground up.
IT leaders often look at other companies to see what they are doing, it’s usually known as best practice, but what if the entire market is in a state of flux? Some IT companies are now delivering radically different solutions to others. Innovations like the app store concept and cloud based solutions are changing the way that IT services are delivered globally, so how can changes in the Big Data market change how the entire IT industry behaves?
Techrepublic magazine recently outlined some important changes in how IT leaders think about their marketplace. Think of these 5 different changes as examples of what is changing and how it can influence the behaviour of IT leaders:
1. Off the shelf analytic solutions like Watson from IBM have been customised to be used across many different industry verticals. It’s the same system, but modified for different environments and it can therefore offer immediate results. Everyone is looking for a rapid return on investment today.
2. Commodity hardware offers a great platform for storage if you are going to keep your data and analytics system internal, rather than in the cloud.
3. More companies are relying on their suppliers for expertise and innovation today. These are true partnerships now, not just outsourcing arrangements where the cheapest supplier gets the project.
4. Analytics reporting systems like SAS are still important because they have been tested and developed over so many years, but also because the users are really familiar with the way these systems work. Familiarity is important.
5. Real time processing systems are changing the way that physical infrastructure is designed and deployed. Look at SAP HANA for an example of how systems using memory in new ways are now feeding back into the design of the physical servers and databases.
What do you think about the lessons from Big Data? Have you seen other ways in which IT is more generally changing because of the way that Big Data is influencing IT strategy? Please leave a comment here.
by IBA Group for IBA Group
Posted on December 12, 2016
Is there a new world of nearshoring emerging in Europe? A recent feature by Ilan Oshri of Loughborough University in Computer Weekly has suggested that the market is changing fast, in particular as a reaction to every country sounding the same when making their sales pitch.
We have all been to those conferences where one country representative is talking about the advantages of their region over others, but when several regions do the same type of talk they do all sound the same. We have great people, we have universities, we have great companies. The same check-box of advantages is always ticked for every presentation about outsourcing to a particular region – so what is changing?
First, there is a big wave of repatriation taking place. Projects that were outsourced to far off locations are coming much closer to home so nearshoring is becoming a much more important strategy for European companies.
Second, a wider array of services can be delivered by suppliers today and this is especially true when the supplier is relatively close to the customer, so the range of services offered through nearshoring deals is becoming more diverse.
Third, companies are increasing their expectation on suppliers. A supplier is no longer just the lowest cost way to get a job done. Many suppliers are the expert in their field and are delivering a service that the client simply could not perform internally anyway. The clients are now expecting suppliers to offer ideas and new innovations. Nobody is talking about innovation as a nice to have function these days, it is becoming an expectation of nearshoring that the supplier can come up with ideas on how to do business better.
Professor Oshri raises some very interesting points in his article. He believes that nearshoring locations still attempting to compete on labour price are thinking with a very short term view of the world. The ability to offer expertise and advice to clients will become the single biggest advantage and this may also require clusters of expertise to develop. He cites some examples of regions where competing firms are operating in the same physical location, so even if it does not sound logical, it does mean that for each specialist activity there are areas where clients can go and confidently find the expertise they need.
I believe that we are seeing a new type of nearshoring emerging and all three of the points raised by the professor are playing out across Europe today. The final point is the most important though. Clients used to be so powerful that they could pick and choose and drop suppliers at will. Now the suppliers have some very detailed knowledge that the clients cannot manage without. Real partnerships are developing and that will lead to genuine innovation.
What do you think about the ongoing development of nearshoring in Europe? Please leave a comment here.
by IBA Group for IBA Group
Posted on November 30, 2016
On November 27, the organizers of the 13th sport competition among IT companies IT Spartakiada 2016 announced the results of this year’s tournament. IBA Group won the second place, following their successful performance in 2015.
Sixteen teams participated in the competition this year. For the first time in its history, IT Spartakiada was held in two stages, with the tournament starting in spring and finishing in autumn. In its spring stage, the participants competed in laser tag, swimming, poker, and indoor football. In autumn, the teams clashed in karting, kicker, bowling, table tennis, volleyball, and basketball.
IBA won the tournaments in kicker and bowling and occupied the second place in laser tag, poker, and swimming. The karting, table tennis, and indoor football teams finished fourth, while the basketball team ended the competition at the fifth place. This allowed IBA to finish at the second place in the overall standings.
Winners of IT Spartakiada are determined by the minimal sum of points scored by teams in their top seven sports. EPAM was the winner of this year’s competition, while ISsoft won the bronze.
Congratulations to our colleagues! We are proud of their success and wish them many more great achievements in the future.
by IBA Group for IBA Group
Posted on November 15, 2016
I have read several studies recently that explore the strengthening connection between how companies use technology and how satisfied their customers are. Traditionally the CIO in a large organisation might be focused on processes, supply chain technology or managing systems used by employees – this is changing fast because of three important trends:
1. Consumer tech; look at the mobile system consumers are used to using today. They can compare prices, talk to friends globally, check customer reviews, and do all this while in your store or on your website. It’s not possible to charge more than the competition today because customers will see it immediately.
2. Tech platforms; the major systems applied inside companies used to be custom-built. Armies of analysts would design the workflow and another army of developers would build the system. Now it’s far more common to buy a system that can be deployed in the cloud and paid for only when it is used. This means that business divisions inside companies are buying major IT systems and deploying them possibly without even involving the CIO or IT team.
3. Blending customer responsibilities; all those clearly defined departments like sales, marketing, customer service, advertising, or PR, forget it. They need to start working together because customers have redefined how they interact with organisations and the companies need to reform and catch up – customer service IS now marketing.
There is a connection here. As the various research studies suggest, companies need to review how they are using technology, and in particular how this improves their connection to customers. Whether you are involved in IT department tasks or CIO-level decisions, or you are part of the business function within an organisation, there is a revolution taking place in the way that customers interact with your business and it is being driven by the technology being used both inside your company and by the customers.
by IBA Group for IBA Group
Posted on November 8, 2016
Global freelancing platforms, like UpWork and JobRack, are becoming an increasingly important source of IT talent. These sites have been really popular with freelancers in many countries in Asia for some years now. It’s become quite normal to hire a contractor in India or Bangladesh to perform defined jobs, such as setting up a WordPress server, but JobRack has recently noticed something interesting about the people on their site.
Many of the new experts arriving on the site are from Eastern Europe. This is demonstrating that there is not only a large amount of technical expertise in Eastern Europe, but also that these people are available for short contracts.
On the surface this may not seem important at all – you can find IT expertise all over the world – however I think that we are observing some big changes in the way that IT services are deployed and managed and this growth in the availability of expertise in Eastern Europe is just one indication of that change. Summarised, I think there are three big changes taking place:
1. Big IT Brands Focused on Customisation and Configuration; rather than trying to deliver enormous bespoke software systems, the larger IT players are becoming experts at bolting together various Big Data or CRM platforms to create entire systems for customers based on existing systems or toolkits.
2. App platform is global; software companies releasing apps can go global instantly. There is no real focus on where a product was developed as the app store is global and customers rarely ask where a product was developed.
3. Global talent pool; as the JobRack numbers suggest, it is becoming easier to recruit globally for short or long-term projects and areas that are full of technical expertise, such as Eastern Europe, are included in this.
The JobRack data indicating a growth in Eastern Europe technology expertise is interesting, but is just one component of a wider picture in how technology services are being delivered today. It’s clear that Eastern Europe is becoming more highly regarded as a leading area for IT development projects – large and ongoing or small and temporary.
by IBA Group for IBA Group
Posted on November 1, 2016
One of the manufacturing myths common in the UK is that nobody builds anything any longer – it’s popular to suggest that the UK used to manufacture products such as cars, but today that business has all vanished. However the numbers make the situation look rather different. Last year around 1.6m cars were manufactured in the UK, which was the highest figure for a decade.
But 2016 brought the Brexit vote and some potential changes to the auto manufacturing industry in the UK. The recruitment company DHR has suggested that auto manufacturers are shifting high-end work such as research and development over to Eastern Europe. Their data is supported by the news that companies such as Jaguar, Audi, and Renault have all recently invested in Eastern European expansion plans.
However, I believe there is more at play here than just the Brexit vote changing how cars are designed and manufactured. What we think of today as a car is changing faster than ever and the research function is about more than developing the next generation of sound system. The entire auto industry is being redefined around technology and the car makers that get this right will win a substantial market share.
There are three areas where I think technological research is redefining the entire auto industry and this summarises why the locations where the R&D take place will be at the heart of planning the future of this industry.
1. Electric vehicles; Tesla has shown that electric vehicles can be popular, but the price is still out of reach for regular consumers. As the regular brands invest more in R&D and battery design we will see an enormous change in this market.
2. Internet of things; cars just becoming a part of your home network will be normal. This will allow cars to self-diagnose problems and talk to the manufacturer without the owner being involved in addition to synchronising to your home – perhaps something as simple as playing the last song you had on in the house when you start the vehicle.
3. Self driving cars; we have seen that it is mainly tech companies that seem to be progressing in this space, but if the mainstream auto brands want to define the future then they need to also be investing in this space.
All this shows that the future of the car industry looks more like the technology industry with integration into networks, the Internet of Things, new battery technologies, and the ability to function without human interaction. There will be a strong crossover between the IT business and the auto business in the near future and it looks like a lot of this work will be taking place in Eastern Europe.