How Is Nearshoring Changing?

IBA Group
Mark Hillary

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.

Building The Next Generation of IT In Eastern Europe

IBA Group
Mark Hillary

ZDNet published a recent focus on Eastern European technology outsourcing because the recently published AT Kearney 2016 Global Services Location Index suggests that 5 of the top 20 countries of the world for IT services are now inside Eastern Europe.

The top three countries globally are India, China, and Malaysia, but Eastern European countries doing well in the report include Poland, Bulgaria, Romania, Russia, and Latvia. Prague also stands out as one of the cities in Eastern Europe singled out for praise.

There are a couple of very interesting features in this report. First is that the countries and cities mentioned are clearly competing on what they can offer to clients. The focus is on cost-effectiveness and proximity to customers, so these regions are far more worried about how they can add value than offer a low price service.

Second is the awareness from many of these regions that nearshoring may not be enough to sustain a long-term IT industry. There is a clear focus in countries such as Poland, Romania, and Bulgaria that they need to build a complete start-up infrastructure if they are to create long-term success.

This approach acknowledges that new IT companies need to be nurtured and many delivery mechanisms today – such as the app store – bypass the traditional way that IT companies have operated. IT companies can often become product companies rather than just offering a pure IT service.

It’s exciting to see the European technology marketplace maturing and to see that Eastern Europe is doing so well even when compared to global competition.

IAOP Recognizes IBA Group for Delivery Excellence

IBA Group
Irina Kiptikova

The International Association of Outsourcing Professionals launched a series of blogs devoted to The Global Outsourcing 100® list that recognizes the world’s best outsourcing service providers and advisors. The blog articles are focused on the four judging categories of The Global Outsourcing 100 and on what it takes for companies not only to make the list, but to achieve distinguishing ‘stars’.

“Hip hip hooray…it’s not the New Year but it sure does feel like it around here with the buzz and excitement of IAOP’s 10th edition of The Global Outsourcing 100®!” – This is how IAOP opens its first series of blogs on The Global Outsourcing 100.

Each organization completed a rigorous, opt-in application to compete for inclusion in The Global Outsourcing 100. The achievements were assessed based on the following four distinct areas: Delivery; Programs for Innovation; Corporate Social Responsibility (CSR); and Size & Growth. Those companies that have distinguished themselves receive half or full stars in one or more specific judging category.

IBA Group has been enrolled in the rating, which is actually organized as a contest since 2006. The list has been evolving and the rules have been changing, but IBA and other outsourcing providers keep applying to be among the best 100. It is not only a good chance to receive exposure. It is also an opportunity to see how the company is doing against others and to set targets for improvement.

The first blog article by IAOP is devoted to the Delivery Excellence judging category. The category includes company recognitions, customer references, company certifications, and the number of Certified Outsourcing Professionals on staff.

Delivery Excellence is a strong area for IBA Group. This year, the company received the score 7.25 for delivery excellence of the highest 8 points. It is a distinguishing accomplishment, given that the average score of the participating companies in this category was 5.86. IAOP awarded IBA Group a half star for Delivery Excellence.

Prosperous Future of Cloud Computing

Zhanna Huziuk
IBA Group

One of the latest trends in the IT industry, cloud computing is rapidly growing and has good prospects for the future. It represents a new kind of service that provides on-demand scalability, cost reduction, and a possibility to utilize IT resources efficiently.

Although cloud computing is currently on the outset, it has already proven to be a revolutionary turn in the IT industry. Moreover, cloud computing represents not only fundamental changes in IT, but also change in the business environment in general. The main underlying reason for business change is a wide range of benefits cloud provides for all types of enterprises, including SME and large-scale organization in terms of lower IT spending and wider business opportunities. All this makes cloud computing a game changer in the industry.

The European Commission may serve as an indicator of the pace of cloud adoption. It has already developed the EU Cloud Strategy to unleash the potential of cloud computing in Europe. The European Commission believes that cloud computing can increase productivity and create new businesses, services, and jobs.

What makes cloud computing so promising? It enables companies to reap a lot of benefits from highly valuable IT assets, including infrastructure resources, middleware, software, and computing resources without actually buying these assets but consuming them as a service.

For example, if a customer deploys software in a traditional way, it buys a license to acquire the software. With Software as a Service, customers do not need to own the license. They just pay a subscription fee instead. In other words, cloud computing is characterized by lower cost of entry and quicker ROI. As a result, organizations reduce IT-related costs and make IT assets more predictable.

Analytical agencies are thoroughly investigating the trend of cloud computing and related issues. IDC summarized that 81% of enterprises reported lower IT costs with cost reduction from 10 to 20% and 12% enterprises reported savings of 30% or more.

The significant savings encourage businesses to think about migration to a cloud service model. Traditional IT is not able to provide such cost savings due to higher entry costs and subsequent high expenditures on support, management, and maintenance activities. The scale of cost reduction in percentage experienced by businesses that adopted a cloud model is presented in the figure below.

Cloud cost reduction

To be a strong player in the market of cloud services, IBA Group is working to deepen its knowledge, master new skills, and gain wider experience.

IBA Group specialists are skilled in virtualization products and technologies, including IT infrastructure server virtualization platform (installation, configuration, management) of VMWare vSphere, systems of Windows Server HyperV and System Center, VMware EXS/EXSi, and KVM hypervisors. In addition, IBA experts are certified in ITIL v3 framework, which is applicable to cloud services.
IBA Group developed a proprietary solution called IBA Cloud Solution. IBA Cloud Solution provides a reliable network, computing, and disk architecture with backup and related software. IBA Cloud Solution offers migration from a current physical infrastructure to a virtual one in an easy step-by-step way. The solution is based on a reliable IBM Cloud&Smarter Infrastructure and uses outstandingly reliable IBM BladeCenter hardware. Virtualization is based on the leading virtualization platform VMWare vSphere.

Selecting the Right Business Analytics Partner

IBA Group
Mark Hillary

IDC is one of the leading global industry analysts, so it’s always interesting to see their own guidance on choosing a supplier. Their recent report ‘IDC MarketScape Excerpt: Worldwide Business Analytics Consulting and Systems Integration Services 2014 Vendor Assessment’ focused exclusively on the questions you need to ask when searching for a Business Analytics partner.

1. Pay attention to domain knowledge. Over the years, some service providers have built deep industry expertise across certain business needs.

2. Create a culture of analytics. It is not enough for you to have access to the right data, you need to create the processes that can make use of this data across your entire organization.

3. Don’t neglect the basics. Companies often find they have data issues once the migration has commenced, which will then delay the entire migration project. Stop and avoid all these roadblocks by taking the data cleansing stage seriously so the migration can run smoothly.

4. Align the strength of your supplier with project success. If you find a good match then ensure that your partner gets stronger as the project succeeds.

Of course, point 5 from IDC was to utilize their own research when selecting a supplier. Most of these points are what any manager with a good experience of outsourcing would be planning anyway, but it cannot be stressed enough that good planning for the migration and creating a culture of data analytics are essential for success.

Reshoring

IBA Group
Mark Hillary

The calls for companies to explore reshoring keep getting louder, led largely by a new sense of nationalism in Europe that was on show during the recent European elections. Many voters are rejecting internationalism in favour of wanting to see more business done close to home.
There has also been a change in the cost of doing business in Europe. In fact, the FT reports that the UK is now the cheapest manufacturing location in all of Western Europe.

But in all the reports about reshoring becoming something of a trend, the focus is always on manufacturing, not the IT or IT service market. Intellectual services appear to be purchased from the best possible location and the talk of reshoring this year has not changed this.
The way IT services are purchased is certainly changing. The concept of an app store being taken from the consumer market and applied to enterprise systems is becoming a reality and cloud-based computing power on demand is becoming normal.

These differences in the way that IT projects are planned and delivered will ensure that customers continue buying from the best global location for their own needs. With most technology projects today the emphasis is on the required skills – if you can’t find them nearby then it’s only natural to look overseas and hi-tech services operate on a global platform.

So it is true that Panasonic is thinking about moving manufacturing back to Japan, and Otis moved their elevator production from Mexico back to the USA, but in IT development it looks like the future will remain global – bits and bytes can be delivered online unlike cars, DVD players, or elevators.

Mobile Applications As You Do Not Know Them

Vitězslav Košina
IBA Group

Mobile devices, mobile technology and mobile applications are widely different. Every now and then, we see Android smartphones of various designs and sizes that are extensively used mainly for communication, entertainment, and sharing in social networks. In business, we come across legendary iPhones and iPads with advanced applications often tailored to the needs of a particular company. Windows Phones are gradually creating their segment in the mobile market. The spectrum of mobile platforms is even wider and a variety of using mobile devices is broad as well.

Entertainment and business are only two out of many aspects of mobility. Mobile devices are also of considerable practical importance. They are able to meet specific user requirements at the right time and place. Thus, mobile applications become the right hand in finance (smart banking) and insurance.
Think, for instance, of the mobile application Pojišťovna for an insurance company. It is a case of value added insurance services, a new channel to customers, an interactive communication tool, and a useful helper in crisis situations such as traffic accidents. The hybrid extension of the Pojišťovna application allows for the search of contracted services. The developers applied an innovative approach focusing on user-friendliness while minimizing the need of additional adjustments and costs associated with future updates. This part of the application for a Czech insurance company is developed by the IBA CZ team.

Usable application may be of help to everyone
Application Pojišťovna (Insurance Company) is available not only for the clients of Česká Pojišťovna. Anyone interested in practical assistance in crisis situations is able to download it. The number of downloads is the best evidence that it makes good sense to have the application and that it brings real benefits to its users. Currently, more than a hundred thousand users run the application on their mobile phones. And the download continues, as well as the app’s gradual improvement and its enhancement with new features.

Certainly, the application is available for download from the App Store and Google Play. It is possible to get the app for Android, iOS, and Windows.

Relevant help, no need to click to another application
Mobile application Pojišťovna provides much more than just a quick and easy access to information about products and services of Česká pojišťovna. As a bonus for current and future clients, the application offers assistance when in a car accident, when looking for contractual services or places of interest (including contacts and opening hours). Technical solution involves a combination of generally known mobile applications and a website built on the Liferay technology. The result is a hybrid application that is used as an easy-to-manage web application. The user does not need to visit the website because all the functions are controlled directly from the mobile application.

To view a website through the mobile application, the so-called Webview components are used. All standard operating systems are nowadays equipped with them. The benefit of this solution for the application owner is a significant reduction of time-to-market when deploying new or editing existing content in the mobile application and thus potential cost savings. In fact, the deployment is not subject to a regular release cycle of mobile applications (up to several days for iOS), yet it is subject to a regular web publication activity. In extreme cases, it can take a couple of minutes. At the same time, the website owner doesn’t have to maintain and publish several versions of the app (iOS, Android, Windows Mobile) when making changes in the content.

This technological approach may not be suitable for all mobile scenarios. However, for a selected set of scenarios it can significantly save costs and time of publishing new content in mobile applications.

Mobile web: advantages in many situations
Depending on the position context, a mobile application can provide relevant information associated with the situation. In case of Pojišťovna, it will specify the closest branch offices or available points of service. In case of the Bene+ loyalty program, it is the list of current rewards and discounts offered by GE Money Bank to its loyal customers.

Bene+ is a GE credit card loyalty program and is another example of using mobile web to increase customer comfort. In addition to general information about the loyalty program, the participants of Bene+ immediately get the list of places where their discounts and bonuses can be used and see their locations on the active Google maps.

Unlike the Pojišťovna application, Bene+ is not a genuine mobile application, it is a full responsive website. It is available for mobiles and desktops, although technically it is a different solution. The thing they have in common is that both the part of mentioned Pojišťovna application and Bene+ website are created by the IBA CZ development team and are built on Liferay technologies.

See also earlier publications on mobile technologies:
Development and testing of mobile sites and applications
Mobile applications: HTML 5 versus native solution

Offshore Outsourcing is About Finding the Best Talent

IBA Group
Mark Kobayashi-Hillary

Offshore outsourcing (often called offshoring) often gets a bad press. Many people assume that offshoring must be all about finding the lowest cost service and therefore the world is engaged in an endless race to the bottom, searching for lower and lower costs.

It’s not like that at all. An interesting article in the business magazine Forbes challenges the conventional wisdom on outsourcing. For instance, even though the US and Europe account for about half the economic activity of the entire world, only about 10% of the global population lives in these two regions.

This means that there are an enormous number of highly skilled people outside the wealthiest nations on earth. Working with this talent is essential because of the difficulties involved in finding these people locally.

And many companies are more globally oriented today. If you wanted a new logo designed in the past then it would be done by a local designer, now it’s done anywhere in the world based on finding a designer you like. Any intellectual task can now be performed anywhere in the world so the issue today for companies of all sizes is that if you are not working globally then how are you finding enough skilled resource to keep you ahead of the game?

And finding the right talent to support your team back in headquarters is only half the story. If you want to expand to new markets, what could be better than working with a team of people in those new markets to give you a footprint and a first step into the new region?

Offshoring has often been misrepresented, but it is now an essential part of corporate strategy that aims at making the skills of the entire world available to clients, wherever they are located.

New Technologies Coming in 2014

IBA Group
Mark Kobayashi-Hillary

Welcome to 2014 from IBA. This is going to be an exciting year! Not only is the European economic recovery really starting to pick up – with the UK probably leading the way – there are new technologies that are coming onto the outsourcing scene and becoming really important.

An article in CIO magazine highlights the top 10 outsourcing trends to watch out for this year.

IT outsourcing experts say: “this could be the year customers — and a few robots — take greater control of the IT outsourcing space”.

Our favourites from the CIO list are:

Hybrid offshoring; offshoring will continue to be an important trend, but many companies will explore how they can do it partly themselves and partly with a supplier – in a more blended way than before.

The cloud being grounded; the cloud is here to stay, that cannot be denied, but many companies have jumped into cloud-based services without realising that they often need a complete culture change, not just a technology change. It’s likely that some companies will step back and plan better for the cloud this year.

Lower cost consulting; we all know that most consulting is overpriced and many companies that deliver services can provide great advice as well as delivery – this is going to become a more popular consulting solution this year.

Of course CIO mentions several more trends, but what do you think will be the big outsourcing stories of 2014? Leave a comment here or tweet us on @ibagroup.

Eastern Europe is becoming a tech hub

IBA Group
Mark Kobayashi-Hillary

Several business magazines and journals have been focused on growth in Central and Eastern Europe over the past few months. The main angle of the observations is that the CEE region has moved far beyond the traditional role as a lower cost alternative to undertaking technology work in Western Europe and is now fostering a hub of talent that should be sought after by the world.

There are now a number of successful startup companies from the region that are dominating their own niche. Ustream from Hungary is a great example. People all over the world are using the Ustream app to live stream events direct from their phone to the Internet without ever questioning where the app came from.

And even in the more traditional IT service sector, the talent available is some of the best in the world. The CEE region regularly ranks at the top of the world for educational achievements in maths, science, and technology. In the 2013 Google Code Jam competition, 16 or the 24 finalists were from Eastern Europe.

The IT service sector is already strong and mature and the startup sector is growing. All the major European accelerators are now regularly visiting the CEE region and looking for companies to invest in. This growth in the innovative startup sector will only make the wider IT community stronger as the CEE region becomes a place that people want to include on their CV. Have you explored some of the opportunities available from companies working in the CEE region yet?

What Are the Secrets to IT Outsourcing Success?

IBA Group
Mark Kobayashi-Hillary

A recent article in the TechTarget publication, Microscope, explores the secrets to creating a successful IT outsourcing relationship. Many managers have experience of outsourcing these days – it’s no longer the secret it once was, but are the secrets to success still the same as they used to be?

The Microscope feature focuses on these three attributes as the most important:
– Partnership; work towards a partnership as two companies working together, not behaving like a powerful client paying a service provider.
– Flexibility; reach an agreement and write your SLA, but don’t reach for the contract every time something unusual happens – be flexible enough to help each other.
– Ability to change; your business will change over time, so work towards a long relationship that might be very different to where you started.

These are three great pointers, like maxims for getting outsourcing right. The industry has moved on a long way from the old days of screwing down suppliers to very tough conditions and not allowing them to make a profit, but there is a key point not mentioned in the feature.

Location of supplier remains important. There are some great IT suppliers all over the world, but if you need to work closely with your supplier and you want the ability to meet with them regularly then it would be best to not have that part of the team a 12-hour flight away.

If you are trying to create a genuine sense of partnership, rather than just a client/supplier relationship then nearshoring still works far better than remote offshoring. People are people and people want to see the people they are doing business with – in person.

IBA Group Holds an Event in London to Celebrate the 20th Birthday

IBA Group
Mark Kobayashi-Hillary

Last week, IBA celebrated their twentieth birthday with a fantastic event in London. I was invited to host a part of the evening where some great insights into outsourcing in the years ahead were shared by a range of experts.

The venue for the event was the Wellington Arch. An incredible building in central London that I have travelled past for years and never knew that the public could go inside. From outside it looks just like an enormous statue, but there is a hidden door leading to a network of rooms.

Sergei Levteev, the IBA Group chairman introduced the evening by talking about the foundation of the company twenty years ago. Martyn Hart, the chairman of the National Outsourcing Association (NOA) then talked about the NOA twenty years ago, when outsourcing was a new word – most companies were still talking about Facilities Management.

Then there was the competition between expert commentators. Each expert was asked to deliver a five-minute talk on how they see outsourcing changing over the next twenty years. The audience had voting cards and could choose their favourite, so the audience was listening intently and ready to choose their winner.

You can click on YouTube here to see the four talks for yourself.

The four speakers competing in the event were:

  • Martyn Hart, Chairman of the National Outsourcing Association
  • John Garratt, Editor of IT Europa
  • Derek Parlour, Head of Commercial at National Rail Enquiries
  • Colin Beveridge, industry analyst at Better Practice.

And who won? The audience on the evening chose Derek. His friendly and casual start to the talk led to some great insights into the way suppliers and clients will need to interact in future and the audience warmed to his theme.

If you watch the videos then why not let us know on Twitter which presentation you enjoyed the most?

 

Developing your mobile strategy

IBA Group
Mark Kobayashi-Hillary

Developing a mobile strategy can be a complex time for any company. The last thing you want to worry about is issues such as operating system or technology platform, which is where the expertise of a company like IBA can help, but there are some important decisions to make before you even think of building a mobile tool.

The initial strategic decision you need to think about is whether to build a mobile-friendly website or to create an App. There are advantages and disadvantages to each solution and the correct path will depend on the type of service you plan to offer, but to summarise these are the questions you should be thinking about:

• How immediate do you want the tool? Do you think people are prepared to install an app or would they prefer to just find it online on a website without needing to set anything up on their phone?

• Do you need compatibility across all devices? If you build an app it will only work for a single operating system (Android, Windows, Apple IOS) so you need to build several versions to reach all phone users, but a well-designed website can work on any device.

• How often will it need to be upgraded? If you plan on frequent upgrades then it could be problematic to design as an app as you are asking the user to frequently upgrade their phone applications. With a website it would be automatic.

• What is your budget? It’s a lot cheaper to build and maintain a mobile website than a suite of mobile apps for various operating systems.

But apps have their place. When you need the specific power available on a particular type of device then only an app can tap into that system. If you are building a tool that will be used often then an app can be a better interface – think of how you access Facebook on your own phone. And apps can be designed to also work offline – something not at all possible for a website.

This is the first step on a mobile strategy. There are various technological questions to resolve before working on a solution, but if you have not considered how your service will be used then the technology itself cannot be planned or designed.

CEE Getting More Attractive Than India and China

IBA Group
Mark Kobayashi-Hillary

This blog has often explored the relative advantages of working with IT companies in the CEE region. The Central and Eastern European Outsourcing Association summarises the benefits of the region as:

• Considerable budget savings;
• Ability to focus on core competencies;
• Extensive experience of an outsourcing subcontractor;
• Speed increase in projects tasks solutions;
• Reduced capital investments;
• Full-time access both to IT innovations and high-qualified IT experts;
• Internal processes optimization;
• Improved manageability.

That’s a long list of benefits. But what are the downsides of outsourcing today? There are far fewer downsides that there used to be. It’s true that handing tasks to a partner means you need to monitoring them outside your organisation and agreeing on specific measurable targets, but all managers today are used to working with some form of Key Performance Indicators – even for internal measures of success.

Since 2003 the Eastern European IT market has become one of the most promising markets in IT outsourcing, demonstrating dozens of positive examples of companies the decided it would be better to stay in Europe rather than far across the world to India or China.

According to the Tholons report “2012 Top 100 Outsourcing Destinations“, Eastern (and Central) European countries are now around a quarter of the entire list of most attractive places to work with.

China and India are now facing sharp increases in costs just as Europe is remaining a lower place to do business. The future looks bright for those who consider Europe – and the CEE in particular – as a great place to undertake their IT business.

How is outsourcing changing the IT market today?

IBA Group
Mark Kobayashi-Hillary

Outsourcing is changing fast. Cloud computing, the consumerisation of IT, and trends such as BYOD have all changed the way the CIO plans for IT needs and engages with IT partners.

Outsourcing used to be about literally dealing with ‘my mess for less’. A company with an internal business or IT process would hire an expert service provider who just performed the same function – hopefully making it better or cheaper over time.

Now that IT has become so integral to the function of modern companies, the IT suppliers have become trusted delivery partners. The client company simply cannot deliver without the expertise of their IT partner.

But IT can be procured in many ways today. The iPhone has taught consumers that apps can be installed when needed and deleted when they are not. Services like Gmail have taught consumers that very important systems can be web-based – there is no need for expensive locally installed software.

All these lessons are flowing back into the enterprise and changing how companies want to procure technology. But with the supplier community so well entrenched, how is this going to change the outsourcing market?

This Computer Weekly feature explores some of the questions, but one thing is clear, expert suppliers of solutions are still needed. As these changes flow from the consumer market to the enterprise it is likely that companies will need partners to be closer and more reactive than ever – this looks good for suppliers based in Eastern Europe rather than far from their clients.

Eastern Europe to Dominate the IT Outsourcing Market

IBA Group
Mark Kobayashi-Hillary

A recent article in the IT Outsourcing News explores the various reasons it can be worth exploring the Eastern European IT market. Of course, all the usual benefits are listed:

• Considerable budget savings;
• Ability to focus on core competencies;
• Extensive experience of an outsourcing subcontractor;
• Speed increase in projects tasks solutions;

And many more, but I don’t want to just list the general benefits of outsourcing here. What was more interesting in the article was the reference to the analyst and research firm Tholons Company report ‘2012 Top 100 Outsourcing Destinations.’

Eastern European countries (the CEE region) have covered around a quarter of the list of the most attractive countries for Business Process Outsourcing (BPO) destinations from all over the world.

Considering the relatively small size of the CEE region compared to the rest of the world, to see a quarter of the best global BPO destinations in the CEE region does indicate that the region has some special advantages. The Tholons view of the major reasons for this CEE dominance is:

• Relatively low costs since a number of countries are not EU members; the manpower and well-established infrastructure allow customers to reduce their budget without losing service quality.

• Proximity to their permanent clients from Western Europe due to convenient geographical location, visa-free or simplified conditions (depending on a specific country) for EU citizens.

• Convenience in communications and control – almost all CEE representatives are located in the same or very similar time zone with no communicational barrier as English has remained to be an international language in CEE for quite a long period of time.

• Similar set of rules in business making process: ISO standards are adopted as state acts in the majority of CEE countries and are obligatory for some industries.

• A very high educational background as normal.

So don’t just take our word for it that you should be exploring this region. When analysts produce lists of the best places to do BPO and over a quarter of the locations are in CEE it should make the world take notice.

We are about to enter a new era of mainframes?

IBA Group

Mark Kobayashi-Hillary

Ask a computer science student in the US or Western Europe what technologies they are studying, and what they want to work with in future, and it is almost one hundred per cent certain they won’t say mainframes.

The mainframe computer – bedrock of the computing industry – has been apparently in decline since the IBM PC invaded desks with DOS, and subsequently Windows, from Microsoft. Yet, though consumers don’t use mainframes and students have no interest in them, it does not mean their use has ceased entirely.

Mainly large organisations with complex legacy systems, such as retail banking or life insurance, have extensive mainframe estates. And even where the hardware itself has remained unchanged for many years, the software continues to require updates due to product changes, new regulations, and changes in the law.

So if nobody is studying how to maintain these systems, or the programming languages used to modify them, then how can those important industries still rely on the mainframe?

There are several strong pockets of mainframe resource located around the world. Eastern Europe, and particularly the former Soviet bloc, has a deep pool of expertise in both the ongoing maintenance of these systems – and developing new software for them.

This is a classic example of how outsourcing to an offshore service provider can be about more than just the cost of service. If your legacy systems are running in COBOL on an IBM mainframe, yet the people cannot be found locally to modify the code, then outsourcing is the natural solution. Forget cost; go offshore for access to the skills you need just to keep your business running.

Mainframes are not going to die just yet. Many large organisations have systems that cannot be wound-up quickly, and as applications move further into the cloud, perhaps we are about to enter a new era of mainframes?

South Africa to rival Eastern Europe in outsourcing?

IBA Group

Mark Kobayashi-Hillary

I was down in Cape Town, South Africa, last week. This is a market that was very strong about five years ago – they really were the place that everyone was exploring for European call centres, but then for some reason they went off the radar.

That was partly through a combination of the government reviewing how much money they spend on promoting the region, and a dearth of really good local players that could promote their offering without government money. But regardless of what happened then, it seems they are back with a bang.

South Africa is positioning itself, once again, as a key player in the BPO market with a focus on customer service, but this time exploring new areas that are different to more traditional outsourcing – social media support and agents that are working entirely off-script, with autonomy to just do what is needed to keep the customer happy.

You might ask what this has to do with Central and Eastern Europe, the general focus of this blog?

The key target for the South Africans is directly to their north, Europe. They are on the same time zone as continental Europe, and have a strong cultural and business affinity with several western European countries. They also use English as standard for education, so kids grow up using English, but other European languages are not hard to find.

So if they re-emerge from the shadows and start winning a number of BPO and IT deals that support business processes in Western Europe, it will remind many that they are still around. Some big names, such as Amazon, have shifted German and British customer support down to South Africa only recently when this might have been expected to stay in the CEE region.

It looks like the football world cup in 2010 has woken the business community to the opportunities in South Africa and the CEE customer service players are going to have to fight a little bit harder to compete.

British people voted for a new government. More outsourcing is on the horizon.

IBA Group

Mark Kobayashi-Hillary

Last month the British people voted for a new government. It was not a straightforward operation because no single party achieved a majority vote. The ruling Labour party were eventually ousted and a coalition of the Conservative and Liberal Democrats took over, with the Conservative leader David Cameron becoming the new Prime Minister.

But what does any of this have to do with the IT services industry in Europe? Well, the previous British government spent a lot of money to save the banking industry and stimulate the economic recovery after the crash that began in 2007 with the US credit-crunch and then swept the world.

In fact, the British government is running a deficit this year of about £180bn. That’s an enormous amount of money to find and so the new government is reducing spending in all departments. As soon as they took office there was an announcement of an immediate £6bn saving. Just this week, further initiatives were cancelled, saving another £2bn, but these are only small amounts compared to the total deficit.

Without a doubt, there will be a shift to more outsourcing and shared services to encourage further efficiency and savings. There are many experienced suppliers with a long history of supplying services to the government, but this is a new era. There is a hunger for innovation and new types of service and charging.

You need a near-death experience if you are going to change the way a large organisation operates and the British government has suffered something very close to that. They are exploring new ideas with new partners and more outsourcing is on the horizon.

Suppliers in Eastern Europe are well positioned to offer greater efficiency, but importantly to be able to offer a service located within the European Union. It’s possible for non-europeans to win business from the government in the UK, but in the present age of austerity, Europeans have a huge advantage.