New Approach To Outsourcing May Define Future For Many Companies

IBA Group
Mark Hillary

Outsourcing has never been a business strategy with much prestige. Often seen as a way of handing over business problems to a partner or slashing costs, it is a strategy that has always had an image problem.

In recent years this has improved. As many processes have become far too complex for companies to manage in house there has been a rebalancing and outsourcing is more often seen as necessary – it’s just one business calling in the experts in the same way that you would call in an electrician to rewire your entire house rather than attempting it alone.

But the role of the service provider is changing and although it might sound a bit like the tail wagging the dog, there is a likelihood that the only way many companies will change quickly enough to survive in the present environment will be if they can trust and work with their suppliers in a new way.

In a recent blog Phil Fersht of HfS Research published some research from his company that outlines how suppliers and clients see their roles in the future. Barely half of all clients are looking to their suppliers for any value in their relationship beyond the business support that is contracted.

But this is highly likely to be a mistake. Outsourcing to expert suppliers and only ever using them for the business processes you have contracted means that you miss out on their vision of how your industry is changing. Look at how fast fintech is changing financial services. If an app is released offering a financial service more easily and at a lower price then that can fundamentally change how the industry operates.

Doing business today is not just about doing what you did yesterday a little cheaper or faster. It is easier than ever for competition to be created and new companies often just tear up the rule book and deliver services in an entirely new way. The big difference is that new companies are usually designed around the needs of the customer from day one. They are able to offer better services at a lower price – this is going to affect many industries and yet a new approach to outsourcing could help mitigate the risk of it happening to your business.

As the HfS research suggests, there is a role for outsourcing to support and enable disruptive business models. Incumbent companies have the advantage of brand recognition and many years of working with customers. New disruptive players can change the market, but if the incumbent innovates first then they have distinct advantages in being able to offer better services with a large existing customer base.

But it needs a new approach to outsourcing. Suppliers need to be considered genuine business partners and trusted to have vision and ideas – the ability to combine innovation with technical expertise. If suppliers are only ever treated as a cost centre then this approach will be lost and many large companies will find that the app-based startups eat their lunch.

How Will Brexit Affect The UK and CEE Nearshoring Relationship?

IBA Group
Mark Hillary

Europe is in a state of flux at present. British people recently decided that they should leave the European Union – now known as Brexit – and the latest book from Nobel prize-winning economist Joseph Stiglitz suggests that the Euro currency will tear the rest of the union apart.

In this uncertain environment, does the old idea of European nearshoring still work? There are many countries within the EU block and part of Western Europe that now have very high unemployment and low labour costs – look at Greece, Portugal, and Spain for examples. Is it still valid to think of Eastern Europe as a supplier of technology skills to the rest of Europe?

I was thinking about some of these uncertainties when I read an article on the GSA Sourcing Focus site. The article explores some of the issues around Brexit and how it might affect outsourcing relationships.

The three main issues mentioned by Sourcing Focus are:

1.    The cheap pound; it’s no longer so cheap to buy services from outside the UK so with the economic advantage eroded will more UK companies buy services locally or look beyond Europe for better value?
2.    Legal situation – data transfers; The UK enjoys the protection of the entire EU regarding company law and international agreements protecting issues such as data privacy across borders. How will this change if the country has to legislate for every possible situation individually?
3.    GDP collapse; if the UK becomes a much smaller economy as many economists suggest then how will this affect the relationship between UK companies and suppliers across Europe? It doesn’t look good.

The fears raised by Sourcing Focus are valid. It’s clear that the UK market in international services could change dramatically in the next few years, but I think that it is premature to start defining issues just yet. The UK government has not even triggered Article 50 of the Lisbon Treaty yet. This would indicate the formal request to leave the EU and begins a two-year process of negotiating how to leave.

At present the situation is that the UK population voted to leave the EU and the government has said that they will follow the wish of the people, however they are now engaged in a process of negotiation before any formal negotiation begins. Nobody really knows what will happen to the UK at present.

The issue for UK companies at present is this uncertainty. Any UK company bidding for business internationally cannot predict what kind of tariffs or taxes might be applied to their services in a few years and therefore they are at a disadvantage. This could lead to a reduction in international services being delivered from the UK and therefore it could be advantageous for Eastern Europe, but if UK customers suffer in this environment and they are already working with suppliers in the CEE region then this would not be such a great situation.

The real problem now is the uncertainty. The UK government should take action as quickly as possible so that however this story plays out, at least there is more certainty about how the UK will interact with the rest of Europe in future.

IBA Group’s CSR Project Offers Opportunities to Disabled People

IBA Group
Irina Kiptikova

On October 6, the Global Sourcing Association (GSA), formerly known as the European Outsourcing Association (EOA), held the Global Sourcing Leadership Summit and announced the winners of the 2016 EOA Awards. IBA Group was selected the winner in the category Award for Corporate Social Responsibility (CSR). The news is really exciting. The project that earned the award is really special.

IBA Institute, a member of IBA Group, trained 120 disabled people in system administration. Entitled Promotion of IT in Belarus among People with Disabilities, the award-winning project was the first IT education project for disabled people in Belarus.

As many people with disabilities were unable to attend in-class trainings, IBA Group conducted distance training. The students could see the teacher’s desktop, ask questions, make presentations, and prepare lab works on network behavior in Cisco Packet Tracer.

Following the training, IBA Group organized a contest among the graduates of the course to attract employers’ attention to the newly educated system administrators. The idea was to show that people with disabilities deserve praise and well-paid jobs.

The contestants were to troubleshoot network connection problems and to get access to web resources within two hours. The winner solved the task in one hour. Alexander Makarchuk, a completely paralyzed resident of Borisov, left behind the runner-up by 40 minutes. From an outsider’s viewpoint, it looked like he was singing canticles: e-e-e and the curser jumps up, a-a-a and it moves to the right…Technically speaking, Alexander manages the cursor using the software Vocal Joystick that ‘memorizes’ the entered words.

It was the first project in Belarus to socialize people with disabilities through IT education. As a result of the project, a community of learners with an immersive environment was created. Six project graduates, including the contest winner were offered IT jobs!

students

In addition to CSR, IBA Group submitted Belarus in the category Outsourcing Destination of the Year. Although Egypt was selected the winner, it is a big boost for Belarus to be shortlisted in this important competition.

As for the Global Sourcing Leadership Summit, it was held in Sophia, Bulgaria. Rosen Plevneliev, President of Bulgaria, opened the summit. After Bulgaria was selected the Outsourcing Destination of the Year in 2015, a letter of the Bulgarian President came to Kerry Hallard, NOA and EOA CEO. He invited the association to organize the 2016 summit and awards in Sofia. It goes without saying the invitation was accepted.

Bulgaria boasts the same competitive advantages as Belarus or Czech Republic. President Plevneliev mentioned qualified resources and political stability, calling Bulgaria “an island of stability” in Europe. People of different religions and politics co-exist in the country.

Kerry, now the CEO of GSA, announced that after 29 years the NOA brand stopped its existence and the NOA was transformed to the Global Sourcing Association (GSA). The new association signed cooperation agreements with Russian and Chinese outsourcing associations and adopted its Global Sourcing Standard.

The most popular discussion topics at the summit were gender equality, robotic process automation (RPA), digital technologies, and the meaning of Brexit for the European sourcing market.

See the full list of 2016 GSA European Award Winners

GSA Shortlists Belarus For Best Outsourcing Location Award

IBA Group
Mark Hillary

I blogged several encouraging reports from my visit to Belarus a couple of months ago including an interview with Valery Tsepkalo from the Minsk Hi-Tech Park (HTP) and Sergei Levteev, the IBA Group Chairman, however there is now some exciting news that verifies what these experts have been saying for years – Belarus has been noticed and recognised by the Global Sourcing Association (GSA), previously known as the European Outsourcing Association (EOA).

GSA Awards

Specifically, Belarus has been shortlisted as one of the best outsourcing destinations in Europe and IBA Group is shortlisted for the best European Corporate Social Responsibility programme.

The final decision will be announced at the awards ceremony in Bulgaria tonight. Whatever happens at the awards ceremony it’s a big boost for Belarus to be noticed in two important awards categories in this way. The best location and the company that is most responsible – all important, but given the information supplied by Valery and Sergei in those earlier interviews I’m sure that Belarus has a serious chance of winning the best location in Europe category.

Belarus has big local companies offering complete end-to-end solutions and expertise in systems integration, but the local startup scene is also extremely strong too. Companies like Viber and Wargaming are innovative and are defining the markets where they operate. Many services are now distributed via the app store for Apple and Android users and therefore the country of origin is noticed less than before – local players can quickly become global in this environment.

Government tax breaks and services such as the HTP are showing that even smaller nations can make a big impact in the global technology marketplace. Shortlisting Belarus as the best place in Europe for IT outsourcing is just one more step towards a more general recognition that this is a great place for running technology projects – good luck to everyone in the Global Leagership Summit & Awards tonight!

New Reality: Technology Trends for Belarus to Apply

IBA Group
Daria Kovalevskaya

On September 30 and October 1, the IPM Business School organized a technology conference in Minsk, Belarus. The conference titled A New Reality: Challenges for Belarus explored the modern trends in technology and how they are applied in the world and, particularly, in Belarus.

The first part of the conference was dedicated to crowdfunding. Speakers highlighted the advantages of crowd economy not only for small businesses and startups but for bigger companies and enterprises as well.

Crowdfunding allows for shaping the entire industries according to what consumers want to see and buy. If they want to read a book by a particular author, see a play with a particular cast of actors, or even buy a chewable ice maker, it’s up to them now to finance it. At the same time, campaign creators are able to validate their ideas (to see if the world is actually interested in what they have to offer) and create relationship with potential clients.

Indiegogo Co-Founder Slava Rubin Talks About Crowdfunding

At the second part of the conference, speakers presented the Internet of Things, drones, and chat bots. The most exciting part was the presentation of Smart Cities, a project by Philips, which uses recent advances in communication and data analysis to make big cities more livable and sustainable. Small sensors and devices work together to collect information that can be used later to save energy and help citizens feel safer.

Advantages of drones and chat bots were also mentioned. The potential of drones cannot be underestimated, as the drone market has recently hit $127 billion. While mostly used in the entertainment area (photography and video shooting), drones operate in construction, agriculture, transport, and security. They can cover areas that are either unreachable or unsafe for humans and substantially reduce the human factor risks. The only stepping stumbling block for drones is the government and rigid drone registration policies.

Chat bots are presented as alternatives to mobile apps. Similar to AI assistants like Siri or Allo, bots provide instant information. The main advantages of bots are multiplatform usage (opposed to mobile apps, bots don’t require different coding for each operating system) and low prices for their development.

The last trend discussed at the conference was Blockchain, a technology that allows for making and verifying transactions instantaneously without a central authority. A great example of Mycella, a company created by singer Imogene Heap, shows benefits of using the blockchain technology. Artists could release their music themselves, gaining control over their earnings and additional information about their songs.

Countries like Belarus may easily adapt to these technologies if they accept them and introduce changes to their institutes.  Crowdfunding is already a triumph here, with the biggest Belarusian platform, Ulej, funding over 40% of successful campaigns since its launch in 2015.

New reality has already made its way into the modern life. Customers, creators, and mechanisms of interaction between them are changing, and those who will be the first to embrace these changes will gain the biggest benefit.

IBA Invites Children to City of Professions

On September 25, IBA organized an interactive family festival entitled City of Professions for its employees and their children to celebrate the beginning of the new school year. The festival was held at the Dream Land amusement park in Minsk.

Young visitors had a chance to learn about different professions. At the entrance to the festival, a special Job Center offered children various career opportunities.

The city comprised 15 educational stations where each child could try out a profession of his or her choice. Future workers received their employment record books, a bag of delicious treats, and ibucks – a special currency created for the participants of the festival. Children could exchange their ibucks for hot chocolate and rides.

Everything was ‘real’ in the City of Professions. To start working, youngsters had to wear special uniform and listen to safety instructions. Future firefighters trained in fire extinguishing using hoses, doctors learned to perform closed-chest massage and artificial respiration, pastry chefs baked muffins and cooked pancakes, artists painted their masterpieces, and detectives had to solve crimes. For their work children received ibucks.

Alongside with employees and their kids, IBA Group also invited children from the Social Pedagogical Center of Minsk’s Soviet District, the 410th daycare center, the 2nd gymnasium of Novopolotsk, and home for senior and disabled people of Logoisk.

Last year, IBA held another festival to celebrate Knowledge Day – Eco City.

To see pictures from City of Professions 2016, visit our Facebook page.

city of professions 2016

Why Using Cell Phones at Work Can Be a Good Thing

The recent Innovation issue of PULSE Magazine, a bi-monthly e-zine created by and for IAOP’s members, published an article by Sergei Zhmako, IBA USA General Manager. The publication titled Why Using Cell Phones at Work Can Be a Good Thing focuses on social and mobile tools and their place in the corporate strategy of an enterprise.

According to the article, mobile and social technologies, being a strong trend in the consumer market, have become a top priority for most enterprises. With two billion people across the globe using social media and half of the web traffic coming from mobile devices, organizations actively employ these technologies in their work environment.

Mobile and social technologies enable easier communication and collaboration between employees and provide an instant access to business information and learning materials.

Despite bringing exciting opportunities, social and mobile technologies may also bring a number of challenges, as transition to them requires additional skills and effort.  The article gives ten recommendations to consider in a mobile or social engagement. Here are top three of them:

1. Engage Users Early – companies must strive to engage users at the early stages of the project lifestyle, including prototyping and receiving quick feedback from focus groups.

2. Consider Added Features – new features, such as a GPS location sensor, camera, or mike, could be added to solution if such need arises.

3. Change Your Culture and Make It Fun with Games – gamification can contribute to easier transition to enterprise mobility.

You can read the full article here.

CEE Trends For An Emerging Europe

IBA Group
Mark Hillary

An interesting video series on the website of Emerging Europe magazine recently explored some of the new trends and opportunities for IT and outsourcing in the Central and Eastern Europe (CEE) region.

The 8-part video series looks at various aspects of outsourcing in Eastern Europe, but I found it particularly interesting to see that there was a strong focus on emerging locations and current Business Process Outsourcing (BPO) trends in the CEE region.

Many new locations are developing as the larger CEE cities find that their BPO industry matures. With strong competition between service providers it makes sense to explore smaller cities, especially those where universities provide a strong flow of talented people ready to work in the BPO industry.

BPO itself is also undergoing a change of attitude. Previously BPO was associated only with contact centres and many graduates are no longer interested in those jobs, however the more complex BPO being undertaken in CEE today comprises a wide range of business services – this is much more attractive than contact centres alone.

Complex industries, like financial services, being supported by suppliers in the CEE region are finding that they are developing new solutions and systems rather than taking existing processes from another region and copying them offshore. This is because many entire industries are changing fast and sourcing services from the CEE region helps them to perform in a more agile and competitive way.

This also creates a learning culture in the CEE companies where people are not just expected to copy processes from western Europe and the client companies. They are expected to anticipate how industries are shifting and to then meet the new needs of their clients – a much bigger and more exciting challenge.

The huge mega-deal of the past is less common today thanks to smaller teams of best-of-breed suppliers that can work together on deals.

The entire CEE area and the type of services being provided is dramatically evolving. I recommended watching the entire video series from Emerging Europe to get some great advice on what’s really happening.

IBA Group Employees Successfully Run Minsk Half Marathon

On September 4, IBA Group participated in Minsk Half Marathon 2016, an event dedicated to the Minsk City Day. Over 20 thousand people, both professional and amateur runners, took part in the marathon.

This year, the marathon gathered participants from 42 countries, including Russia, Ukraine, Costa Rica, Kenya, and Japan.

IBA Group didn’t remain indifferent to the event and joined Minsk Half Marathon. Fifteen employees of the company participated in the marathon, choosing one of three available distances (5.5km, 10.55km, and 21,097km) and successfully completing them. Congratulations to our colleagues on their achievements!

Healthy lifestyle is encouraged at IBA Group. The purpose-built fitness center offers classes in aerobics, pilates, and yoga. Employees can visit a gym, play mini-football, basketball, volleyball, and tennis.  Rooms for billiards and table tennis are also available in the fitness center.

IBA Group frequently participates in various sport events, including IT Spartakiada, IT Karting, and other championships. The company organizes Tourist Rally, an annual two-day camping trip for employees, which includes sport activities and teambuilding.

In 2015, IBA Group took the first place at the 12th IT Spartakiada sport competition, winning gold medals in karting and bowling, as well as bronze medals in kicker and volleyball. The table tennis and basketball teams finished fourth and fifth respectively.

IBA Group Employees Successfully Run Minsk Half Marathon

Click here to see more photos from Minsk Half Marathon.

The Changing Nature of Global Outsourcing

IBA Group
Mark Hillary

The traditional drivers or outsourcing are factors such as availability of talent, flexibility of a supplier to provide expertise, and a reduced operating cost, but a recent feature in CIO magazine showed that the situation around the world is changing. Many regions are seeing unusual changes that are sometimes beneficial and sometimes problematic.

IBA is focused on the Central and Eastern Europe region (CEE) and there are changes taking place in many of these countries that are not usually picked up by commentators who merely talk about rates being lower than western Europe. The conflict in Ukraine is a good example.

All organisations want to operate in a stable political environment. Armed conflict is not going to help any business function smoothly and it is interesting to observe how the CEE neighbours of Ukraine have all benefited from the conflict. Many IT and BPO companies with operations in Ukraine have shifted their teams west into neighbouring countries and many individuals with skills have just moved, seeking work nearby. In some cases (like Lithuania) the local government has made it easier for foreigners with IT skills to come and find a job.

These unusual changes in outsourcing attractiveness are repeated in several other places around the world. Brazil and Colombia have both seen currency depreciation over the past year that makes their services at least 20% cheaper than a year before – for companies using US dollars.

Even inside the US there are changes that are not reported so often. The government offers many incentives for companies that hire military veterans and as the USA winds down various overseas operations there are many veterans starting service companies and using their veteran status to win contracts with companies that want to hire locally, but also see that they get tax benefits in doing so.

What’s interesting about all these cases is that they show how complex the outsourcing decision process is becoming. This is no longer about selecting a nation or individual company, many other factors are in play and can affect how a corporate relationship works.

Interview: Valery Tsepkalo, Director of Hi-Tech Park in Minsk

Mark Hillary

I recently visited Minsk in Belarus as a guest of IBA Group. They were opening a major new facility in the city to expand their capacity and to boost their cloud capabilities globally. The new IBA Group facility is located inside the Belarus Hi-Tech Park (HTP), a venture partially funded by both the public and private sector to help boost the wider IT industry in Belarus.

I met up with the HTP director Valery Tsepkalo to ask him about the technology industry in Belarus and how the park fits into the wider development of an industry that is rapidly changing and expanding. Initially I asked about the park itself and what can be found at the HTP in Minsk. He explained: “We have been operating for a decade now, but it’s not just IT park facilities, it is also a wider concept of the companies and the park – like a representation of the entire IT industry. It’s like a club. Belarus is quite a small country and Minsk has most of the national IT industry so this park pulls everyone together and offers some physical infrastructure. We have the administration of the park here and our offices, but also a business incubator, education centre, and the individual company offices.”

After we talked, Valery gave me a tour of the incubator. It was an impressive area where the HTP offers office infrastructure to startups at a very low rate to help get them started and potentially become full-price HTP customers.

“We have 153 companies in the HTP with 24,000 software engineers. All of the companies are independent and all are privately owned, the government has no stake in them. We [the HTP] are an agency of the government and have an agreement with the member companies so they can take advantage of a special tax regime. We do demand an annual audit and an update on the companies every three months so our members are very open with their information. It’s important for potential clients to see this level of transparency in the IT industry. Big companies like Epam or IBA have their own international reputation, but being here helps the smaller member companies to build trust,” Valery explained.

So the HTP offers physical infrastructure, but also offers a chance for many people in the same industry to work in close proximity, creating opportunities for networking and sharing information on business trends. I asked Valery if the HTP is involved in the global promotion of the technology industry. He said: “Yes, but we don’t usually promote the HTP alone, we create delegations with our companies so other business owners can see the companies that are using the HTP. Often we work with chambers of commerce or our embassies internationally to create events that promote cooperation. When you are one part of the wider industry it gives everyone more clout than just promoting the HTP alone.”

This is an interesting point because many IT associations find it hard to get companies to cooperate when promoting their national industry overseas. Naturally every individual company is pitching for business, so the harmony they need to promote a region together can be hard to find.

Valery explained that when they talk to overseas customers there is a requirement to sell both the capabilities of the IT companies and Belarus itself: “We need to sell both the country and company. When we had quite strained relations with the US and Europe we asked clients to come and visit. Even if their view is not favourable based on the media then they quickly found that the reality is very different. It’s a normal country with no real difference to Greece or Slovakia. Clients that come here see a normal European country with hard working people. The best marketing is just to do a good job for your customers.”

The political image problem is something that cannot be ignored in Belarus. The nation has famously been called “the last dictatorship in Europe” by many commentators in the European and American media, so how can the companies in Belarus deal with such a negative media portrayal? I asked Valery if the general problem of how Belarus is perceived has been reduced now there are several important companies from Belarus working internationally. He said: “It’s one reason yes, but politically most western countries realise that this political situation is better than our neighbours, like Ukraine. At the end of the day whatever you like or dislike about the way that countries are run, at least if you have people there that you can negotiate with and you know that there will be good outcomes then it is better [for everyone]. In our part of the world the legal system is not quite like it is in the UK; it was basically just criminal law after the Soviet Union ended, but we are well on the way to improving this.”

It’s true that the IT market in Belarus is growing fast. Valery described some of the latest statistics from the HTP: “[In recent years] we were growing 30-40% a year, but it’s a bit less at present with about 20% growth in revenue. The latest figure was about $800m (USD) which is 46 times the entire IT industry here in 2005. So after just nine years of activity we have made an enormous difference – we plan to pass the $1bn figure this year.” He added: “The park is growing at about 3,000 new people each year and this has been a consistent level of growth for about the past five years. It’s a really good growth rate because [the industry analyst] Gartner suggests that most IT markets are growing 3,4, or 5% and in the last year the global IT industry actually declined by about 1.5%, yet here we are still growing at over 20%.”

Traditionally the IT outsourcing market in Central and Eastern Europe was all about serving companies in Western Europe, such as the UK and Germany, and being able to offer lower prices, but with a highly-skilled workforce. However the entire IT and IT services market is changing at present. I asked Valery what changes he is seeing from Belarus: “The service companies are moving to offer sophisticated complete business solutions. One of our companies is building the front office for eCommerce companies because many traditional retailers need to fight experts like Amazon – if you can’t match this kind of online service then you are lost.” He added: “The startup culture is an interesting trend too, like Viber [phone app similar to Whatsapp] for example or World of Tanks [battle game produced by Wargaming], one of the most popular games in the world right now. These companies start up and build a product rather than working for clients. Many companies like IBA Group have created start-up garages so their own employees can test out new ideas too. I remember when some of these products launched and they were very local, but many of these products have gone completely global.”

I asked if the app store business model had changed how IT companies in Belarus are delivering their services. Naturally the Apple and Android app stores have created an opportunity for IT companies to develop services anywhere and immediately have a global distribution platform available.

Valery said: “The app store model has definitely changed the market and allowed some of these companies to go global quickly. Even ten years ago I couldn’t expect results like this. When Wargaming entered the HTP they had about 30 developers and now they have over 2000. But now they are not just located here, they have teams all over the world.”

The HTP in Minsk, Belarus is a mix of trade association with physical infrastructure and some government support, but it is clearly supporting a young, vibrant, and fast growing industry in Belarus. What is really interesting though is that companies you might just think of as ‘European’, like Wargaming or Viber, have their origins in Belarus. It’s certainly a market that’s still growing because there is a local culture that is supportive of seeing every ship rise on the same tide.

Big Data Is Becoming Big Marketing

IBA Group
Mark Hillary

It’s fascinating to see how quickly different technologies can move from the world of the technology expert to the mainstream. Think back ten years and it was quite rare to be using the mobile Internet. Some people were struggling along with a very slow connection and an old Nokia handset, but it really wasn’t until the iPhone came out in 2007 that it started becoming easy to use the Internet when on the move.

More recently look at how everyone suddenly understands Augmented Reality (AR) because of the Pokémon Go game. AR has been around for years as a way of overlaying information onto live images, but it has never caught on in a mainstream way until now.

I think we are about to see a similar shift in the way that Big Data is accepted in the enterprise environment too, because it is moving on from just being important to the technologists.

Companies are finding that their customer journey is changing dramatically. This is the route that customers use to find out about products and then buy them. Instead of seeing adverts or marketing materials and then making a purchase, there is a much more complex two-way information flow that can be spread across many channels.

Many organisations are finding that they need to blend all their customer-facing activities together so they can be coordinated. This means that the Public Relations, Advertising, Marketing, Sales, and Customer Service teams all need to be working together because all of them are involved in the customer journey to some degree.

Making sense of all this change requires data and analysis. Smart companies are finding that they can develop better strategies by analysing patterns of customer behaviour, but this requires the analysis of very large data sets. Suddenly Big Data is moving into the world of the marketing team and becoming a valuable tool.

So for any company to succeed in this more complex customer environment, more knowledge about customers is essential and I believe that strong data analysis skills will be needed more than ever. Watch out for this as Big Data skills are going to become a mainstream part of organisational strategy in the very near future.

Enterprise IT Is Changing Fast

IBA Group
Mark Hillary

I saw an interesting Tech Target blog on the storage requirements associated with Big Data projects recently. It’s interesting to see just how many technology concepts are now either blurring together or becoming interdependent.

Consider this as an example. A shipping company installs tracking devices on every vehicle and container they use – it might be tens of thousands of individual items that can now be tracked and monitored and more effectively moved into position. Clearly that increased efficiency is great for the company, but what does it mean in terms of additional IT infrastructure?

First there is a need for an IoT strategy – the Internet of Things – where all these individual items can be tagged and monitored in some way. Either they can independently broadcast their location or they can be monitored using devices that pass in close proximity to them.

So the sheer amount of information that is being captured requires a Big Data strategy because instead of just having an inventory of items, now you need to model the items and their location in real-time. Your database has to become a reflection of the business.

Then a data analysis strategy is required because you need to build models that can maximise the efficiency of the data model and improve on what humans can do manually. As the machines learn the optimum processes, much of the system will be able to run automatically.

But underpinning all of this will be a storage strategy because the amount of data that is created, stored, and manipulated will be huge compared to earlier inventory-based systems. In some cases the data capture will appear to be extraneous – capturing the movement around a port of a single container might not by itself add a lot of value to your business, but when aggregated with the location and movement of every container and analysed, efficiencies can be created.

And this leads back to the use of a cloud strategy to ensure that all these systems always have the storage and computing power available whenever needed.

It’s becoming hard to consider any of these strategies as distinct from each other because the way that IT projects work today has moved far from the world of PC-based applications. Enterprise systems are getting bigger and better, but they need more consideration and strategic planning to succeed.

IBA Gomel Celebrates 15 Years

IBA Group
Irina Kiptikova

On July 27, IBA Gomel, the second largest software development center of IBA Group celebrated its 15th anniversary.

The entire team and numerous guests gathered at the Locomotive Stadium in Gomel, the second biggest city of Belarus.

Igor Khobnya, IBA Gomel Director; Valentin Kazan, member of the IBA Group Board; Valery Tsepkalo, Director of Belarus’ High-Tech Park, Matthias Karius, Supplier Relationship Manager at IBM, and representatives of the Gomel city administration, universities, customers, and partners appeared before the audience.

They recalled the days when they began working with IBA Gomel, linking the company’s history with the history of the global IT industry, and thanked the company for excellent work.

The party was really cool! We all had fun greeting those who were honored for hard and brilliant work, listening to the hearty welcomes from partners and guests, watching the magic show, dancing, and simply enjoying the atmosphere.

Congratulations to IBA Gomel and its director Igor Khobnya! The company is truly happy to have Igor as an unchallenged leader and the IBA Gomel team as one of the best centers of excellence.

About IBA Gomel

IBA Gomel was registered as a legal entity on July 26, 2001, while the official opening was held on December 17, 2001. The founders were members of IBA Group, namely IBA Minsk, IBA IT GmbH, and IBA Intelligent Systems. The goal was to take advantage of highly-qualified human resources of Gomel Region with its long IT traditions and universities providing education in IT specialties. The first IBA Gomel’s project dealt with SAP development for IBM. Implemented in cooperation with IBA Minsk, the project involved ten programmers. Today, the team amounts to 350 IT specialists who work on different projects for local and international companies.

IMG_2161

Click here to see more photos from the party.

CEE Looks Strong For IT Outsourcing But The Market Is Changing

IBA Group
Mark Hillary

Earlier this year the management consulting firm AT Kearney released their latest IT Global Services Location Index. This research shows where they believe are the best locations for IT outsourcing globally.

The first thing that is interesting about the report is that a quarter of the top 20 countries are all located in Central or Eastern Europe (CEE). It’s clear that locations such as India or China will offer lower cost IT services, but based on a wider variety of factors the CEE region performs extremely well.

The CEE countries featured in the AT Kearney top 20 are Poland, Bulgaria, Romania, Latvia, and Russia. All these countries, except Latvia, improved their position in the top 20 year on year so there is not just a large proportion of CEE countries in the top 20, there is a trend towards this region becoming more attractive too.

But there is also a big shift taking place in IT outsourcing. The AT Kearney research also describes how Business Processing As A Service (BPaaS) is poised to reshape how outsourcing works. Outsourcing is not just about a client commissioning IT work from a supplier in another country – the entire process of buying IT systems is changing.

This is an important point and echoes what we have seen in the consumer market. Think about how you use software on your own computer or phone. Either there is an easy to install app available from the app store or you can use a service within a browser. There is no installation or configuration required to use your own personal technology systems and enterprises are mirroring this behaviour.

The cloud was originally popular with companies that wanted flexible access to computing power or storage, but it has matured into a strategy that allows systems to be centrally installed and configured and accessed remotely. The client can then only pay for the time they are using the system, blending IT systems with BPaaS.

The real winners in IT outsourcing in future will not necessarily be the companies in the lowest cost location or with the most technically gifted employees, it will be the companies that can plan for cloud-based services with pricing plans that make sense for companies that do not want to pay up front for technology services.

In Conversation With Sergei Levteev, IBA Group Chairman

IBA Group
Mark Hillary

During my recent visit to Minsk to see the launch of the new IBA Group campus I managed to find some time in the diary of Sergei Levteev, the IBA Group Chairman. We sat and talked about some of the issues facing technology companies and in particular how strategies such as nearshoring are changing.

I first asked Sergei about the way that IBA, and similar companies, present themselves to their prospective clients. Do they need to focus on the qualities of the company itself or sell the location where they are based?

He said: “There is a combination because if we are selling IBA then we also need to sell development expertise in Belarus, but we invite people to come and see what we do in Belarus and we are happy to introduce them to reference clients.”

He added that reputation and longevity is also important: “A key point is stability. We have been delivering from here for over 20 years. People are worried about various situations, such as politics, but it has been very stable here. Customers think about cost and quality, but they also want stability.”

The reality is that both the location of a technology supplier and the experience of the company are both equally important, as Sergei summarises: “Companies have to be located somewhere so we always invite clients to come and see where and how we work. It’s important to talk about both – give references for the company and show that the country is stable too.”

I was interested in any recent changes to the nearshoring market and as IBA has a particular expertise customising tools such as SAP, I asked how this market has changed. Sergei explained: “Customers always wanted to change products and this needed a lot of programming and changes. Now they often realise that they are buying a good product used by hundreds of thousands of customers so they change their business processes to fit the software. In this case we work more on a consulting basis, to help tune processes to the software product, rather than reprogramming it.”

This is an interesting observation because the customers have led it. As tools like SAP have improved, most customers no longer ask for development work to change the system, they ask companies like IBA to help them change their processes to fit the software system.

Sergei added: “If you compare the situation today to 5 to 7 years ago then it’s true, the customer would say that we know best and you should just do what we ask – the customer is always right. Today there is less programming and more of a focus on the vertical expertise, such as banking or retail.”

But in addition to this change in the nearshoring marketplace there is also the move towards business solutions being delivered via the cloud, rather than customers paying for entire bespoke solutions to be built. How has this trend affected IBA? Sergei said: “The customer no longer wants to pay for the future. They will not pay for infrastructure years in advance. They want to check if you can deliver a business solution and then agree on a monthly payment. They are not asking for a completely new system to be designed and built, they want to subscribe to an existing business service.”

He added: “This is one of the reasons why we invested in our new data centre. It’s not that we just want to have a data centre, it’s because we want to offer services to customers and for them to feel confident that they can pay for a service just like they pay for electricity now. IBM was talking about Software as a Service (SaaS) more than 10 years ago, but it was mostly theory then – now it’s a reality.”

So there are various trends reshaping the nearshoring market, such as the cloud, pay as you go business solutions, and a move to consulting rather than just software development, but has the nearshoring and offshoring debated changed completely?

Not so much. Sergei explained: “Software development is still a focus area for IBA Group. As for sourcing, the customer is always looking for the right mix of on-site, nearshore and offshore IT. We are working on a project in Lithuania and that’s really nearshore because people can come and go easily, but nearshore is more expensive than a completely offshore project. In the past few years we have seen many companies exploring in-sourcing, where they create new internal technology teams, but this is rarely economical and I think that it is a temporary idea.”

He summarised the big change ahead for the rest of 2016: “The cloud is still quite new, but it will be the future. The mentality of the customer has to change to use more cloud-based services. In Western Europe the cloud is mature, but here in Minsk there are many managers who would like to keep the technology in their office. However, I believe it will be the main form of IT service delivery in the next 2-3 years.”

The nearshoring market used to be focused on lower cost software development, but this is changing in several ways. Customers are looking for solutions they can rent more than building their own systems and when they do decide to buy a software solution, they are using IT companies for business process alignment, rather than making changes to the software.

All these changes suggest that cloud-based services really are the future for IT service providers, but not all of them will be able to build off-the-shelf solutions they can rent. Those who cannot win this new type of business will face ever-decreasing rates, as the customers look more to service quality without a big financial risk, rather than slashing the cost of developing new systems.

Click here to see images and videos from my visit to IBA Group in Minsk this month…

Launching The New IBA Group Campus in Minsk

IBA Group
Mark Hillary

I flew to Belarus recently to be at the launch event of the new IBA Group campus on June 8th. The new campus includes a large new office building housing over 900 team members, a data center, a fitness center, parking, and accommodation.

Of course, travelling from Brazil to Belarus is a long way to go just for a party, but there were some special guests at this event including Sergei Levteev, IBA Group Chairman, Sergei Nalivaiko, Minister of Taxes and Duties for the Republic of Belarus, Cesare Baroni, Vice President for Transformation and Operations, Systems & Supply Chain at IBM, and Valery Tsepkalo, Hi-Tech Park Director.

The IBA Group leaders and VIP guests all participated in a ribbon-cutting ceremony at the entrance of the new campus, which was also captured by a drone buzzing over the head of the crowd. When Sergei Levteev lifted up a symbolic key to the building over 300 balloons soared into the sky.

The new campus comprises these different areas:

1.    A 6-storey building with around 900 workplaces equipped with the latest engineering and telecommunication infrastructure
2.    A fitness center with a gym, a large game room, fitness rooms, and a table tennis room
3.    A data center built in accordance with modern international standards of reliability and performance and using modern energy-saving technologies of operating energy-intensive equipment. The heat generated by computer technologies of the data center is recovered and used to heat the fitness center
4.    Three-level parking lot for 400 cars.

The fitness center was impressive, with several basketball courts and facilities for 5-a-side football as well as other games such as pool and table tennis. All modern offices are now finding it essential to offer these spaces where tired techies can escape from their code for a while.

The office was modern and featured elegant transparent elevators that allow passengers to watch the horizon as they ascend to the top floor. It’s also possible to access the roof, where artificial grass creates another area for relaxation.

What I found most impressive on the tour of the new facilities though was the data center. I haven’t been to a data center for some time because most companies I know now outsource this requirement. However this is exactly what IBA Group is offering to their clients, a secure data center facility.

The data center had two completely separate power supplies from different substations on the power grid and they charged up two separate battery units. This allows the mains power to be used even if one section of the city grid fails and if there is a complete failure of the grid then the significant battery power storage allows the entire campus to keep on running for many hours – so the servers can be shut down in a controlled way if there is no chance of the mains power returning.

In most older data centers I have visited, the entire room is cooled, but in the IBA Group’s new data center every rack has fridge-style cooling in addition to the room being cooled. This kept the room impressively cool, even with a large party of guests opening and closing doors. Huge pipes pumped coolant around the facility with the excess heat being transferred to the fitness center.

A character from the future called “I” came and joined the launch event, bringing a celebration cake and a string quartet entertained the guests as they painted their own vision for the campus.

The launch event was both entertaining and informative. I have worked with IBA Group for several years now, but I was impressed to see that their abilities and scale keep on improving. This campus has only just opened and they already have another that will accommodate another 1,000 people being planned and ready to be launched as quickly as that one can be constructed.

I’m grateful that IBA Group allowed me to attend their launch event. It gave an incredible insight into the ambition of this company. Congratulations for this new campus launch and I wish them all the best for the new launch – when the campus that is still being planned is ready to launch then I’d love to return to see how much further the company has travelled.

Click here to see images and videos from my visit to IBA Group in Minsk this month…

SSON Celebrates Ten Years of Focusing On Eastern Europe

IBA Group
Mark Hillary

It’s great to see that the Shared Services and Outsourcing Network (SSON) is now celebrating ten years of activity in Eastern Europe. SSON has long been a source of useful research and information on outsourcing and over the past decade their research has formed a useful body of knowledge on nearshoring in Europe.

To celebrate the tenth year of activity there will be a conference in Hungary in October featuring over 65 speakers all focused on the opportunities available within the European nearshoring environment.

Typically with these regional-focused conferences there is a competitive element to the talks, where one region will compete with another to describe how they have more graduates each year, or more skilled IT personnel. This approach is rather tired and ignores the wider benefits of working across many European countries as a whole so it’s great to see that the SSON conference is looking at the big picture for nearshoring in Europe and how it affects different industries, such as finance and HR.

I was particularly interested to see that there is also a focus on how the millennial demographic is changing business in Europe today. This is something I have often spoken about in recent years. The millennials (those born from 1980-2000) have a very different attitude to work and technology because most of them grew up in a post-Internet era – they have only ever known a connected society so they are different as both employees and customers.

Many of the people in this age group are now in managerial positions and are determining where their company should invest. It is therefore extremely important for companies aiming to work with other companies B2B to understand this changing dynamic.

It’s great to see that the SSON understands this change in the outsourcing client and supplier relationship and in particular how this can affect European nearshoring. I look forward to hearing more from the event in October.

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.

How Could Big Data Let Us Down?

IBA Group
Mark Hillary

I have often written here about the potential for Big Data to fundamentally change the way that many companies do business. It cuts across industries and is not just a single strategy, it can change the way that existing companies perform and create opportunities for new market entrants.

This cross-industry application of Big Data is where I think there is the most potential for it to become a game-changer. IT experts rarely got to delve so deep into their industry of choice in the past; they focused on the technology and systems that assisted a company.

Now, with Big Data analysis helping doctors to diagnose patients and helping bankers to fight fraud there is a much greater connection between the industrial application of technology and the technology itself. The technology teams need to really understand the business they are working in.

But this is where the peril also can be found. As companies depend more and more on huge data resources and the ability to intelligently analyse this data we are entering a world where data has an enormous value.

Just look at the Panama Papers data leak. A huge amount of secret customer data from the law firm Mossack Fonseca was leaked by a secret source to journalists and it appears to show many wealthy and powerful people using companies in Panama to hide their wealth – and therefore avoid taxes.

Of course, it could be argued that it’s a good thing that this data was leaked. All those powerful people should pay their tax correctly rather than hiding their money, but imagine Facebook was hacked and every online conversation was leaked, or Google and every private gmail message were posted online? Imagine if another law firm were hacked and details of every divorce settlement they have handled were posted openly online?

It’s almost impossible for most customers to now avoid giving out their personal information when dealing with companies and the data is being collected into enormous databases profiling purchases, preferences, and behaviour. Companies in all industries are now wedded to the possibilities presented by the use of this data, but so few are acknowledging that if they ever lost control of the data it could be an existential threat for their business.

Big Data certainly has benefits, but it’s time for companies to acknowledge that with these big data sets come big responsibilities. The companies that fail to protect their customers will not survive.

Are The Robots Taking Over?

IBA Group
Mark Hillary

Science fiction authors have long predicted a world in which intelligent robots take over the world. Classic authors such as Isaac Asimov even created ways in which humans should interact with robots, predicting that there will eventually be a problem defining the difference between a human and robot. After all, if a robot can learn, is self-aware, and grows in intelligence and human empathy as it ages then how can you define it as “not alive”?

This has created our fear of robots. They are fine if they are just performing repetitive tasks on a car assembly line, but if they can learn and improve then one day they might be better than humans.

But we are not close to that time yet. Anyone who has used the Apple Siri device knows that it can be extremely useful if you ask a question like: “where is the nearest Italian restaurant?” but ask it to define the meaning of life and it will be lost.

However, Robotic Process Automation (RPA) is becoming a real thing in the Business Process Outsourcing area of services. RPA allows the concept of robots to be applied to services – so it may often just be a piece of software rather than a physical robot, but if it performs a specific service then it gets the robot name.

A good example in contact centres. A vast number of calls to contact centres are repetitive and don’t require a human. For example if you are calling your bank to change address or you just need a balance on your account or you are asking your telephone company to recharge your account with some extra data. Basic interactions like these can be diverted to software systems that understand the voice of the customer and react as a normal agent would, except it’s the robot system performing actions, not a real live agent.

What is interesting though is that some companies with a large volume of interactions – like telcos – are finding that they can allow the system to learn. The robot can be given basic instructions, but can learn from every customer interaction, so the robot learns how to fix problems it was not originally programmed to fix and it can identify trends and patterns in the customer enquiries.

The fear for many humans working in areas such as contact centres is that these robots will entirely replace them, but as this Chicago Inno article shows, the robots are actually supporting the human jobs. Humans are performing more valued-added tasks that require insight and an ability to analyse the data being created. The robots can remove much of the repetitive work and can do it faster.

RPA is going to be the next step for Big Data. How can companies learn from all the information they have and then create processes that can intelligently interact with their customers?

It’s still at the early stages. Some companies are using RPA to improve their customer experience, but the likelihood of RPA learning how to run the company and replacing the humans is remote at present.

However, they are getting better. Just imagine where we might be in a decade from now? Eventually we might need to start reading Asimov once again so we can figure out how to integrate the robots into society!

Big Data and the IoT Are Worth Billions to the UK Economy

IBA Group
Mark Hillary

The Centre for Economics and Business Research (CEBR) recently published new research exploring the size of the Internet of Things (IoT) and Big Data markets in the UK economy with predictions running from 2015 to 2020. These two technologies are expected to add £322 billion to the British economy during this period and although the research is focused only on the UK it can be safely assumed that the effect will be similar in other developed European markets making the effect of these two technologies enormous.

In the UK, the scale of this effect is worth 2.7% of the national GDP and is therefore not just of interest to technology firms, and companies that require technology solutions, these technologies are literally going to change the economy in regions where they are deployed. The opportunities are increasing on a daily basis.

The research indicates that telecoms firms are already strongly adopting both Big Data and IoT solutions, but other industries are catching up and expressing a strong interest in how these technologies can help. Retail banking is expected to overtake telecoms soon for Big Data analytics and it’s no surprise because this is an industry that is being shaken to the core.

The big advantage of improving the use of data analytics is that companies can get to know their customer behaviour better. This means they can adjust their offer to the customer and personalise the service received, all leading to improved revenue and happier customers.

In a business like banking, new start-ups are finding that they can pick a small part of the business, like remittances or lending, and focus on that one service. If they can launch an app offering the service and it is cheaper and better than a traditional bank then they can start growing their market share.

The banks cannot stop this happening, but they can start adjusting their own customer experience so that their existing customers do not desert them for rivals. To make this happen needs information about customer behaviour and that’s where Big Data fits into the story. Knowing your customer needs better insights and technology tools like Big Data analytics and the IoT are what will help you to design how your business is going to work after 2020.

Gartner Highlights Advantages of IT in Belarus in New Report

IBA Group
Mark Hillary

The analyst firm Gartner recently published their latest evaluation on offshore outsourcing for the EMEA region in 2016. The report paints a positive picture of nearshoring within Europe with labour rates substantially lower than most western European countries.

Gartner found that the Eastern European countries can also compete on their geographic and time zone proximity to other nations within Europe, and on the availability of language skills beyond just English. Countries such as Poland, Czech Republic, Hungary, Romania, and Bulgaria also offer political and economic stability through EU membership and close cultural affinity with Western Europe and the U.S.

What is interesting for companies such as IBA Group is that Gartner did explore the options further east. When commenting on countries such as Russia, Belarus, and Egypt the report says: “[these countries] offer lower labour rates, but entail higher risks concerning legal maturity, intellectual property protection, security and ease of doing business.”

Belarus scores well on several measures that Gartner mention in their analysis, particularly the high level of government support for business and the low local labour cost. The Belarus government has invested in education to create a workforce skilled in IT – it has been growing at 35% per year since 2006. Some of the government incentives include a 0% corporate tax rate and a flat 9% income tax rate – for companies using the Hi-Tech Park Initiatives.

Gartner cites the Payscale index and suggests that a software developer in Belarus earned $14,000 to $16,000 per year based on data from last year. The labour inflation in Belarus is 5% per year and employee attrition/turnover rates are also around 5% per year – both figures are relatively low compared to other European countries.

Most IT activity in Belarus is focused on Minsk, but other locations are rapidly growing and also featuring technology parks, such as in Gomel, Grodno, Brest, Vitebsk, and Mogilev.

The Eastern European nearshoring is well known already, but it’s exciting to see that companies such as Gartner are now seriously covering locations such as Belarus.

How Robots Will Change the Way We Work

IBA Group
Darya Kavaleuskaya

The writing is on the wall: robots are coming. The latest report issued by the U.S. Council of Economic Advisers shows that if you earn between 20$ and 40$ an hour, there is a 31% chance you will be replaced by a robot in the near future. If you earn less than 20$ an hour, the probability is as high as 83%.

Robotic Process Automation (RPA) is unstoppable. But is it time to start packing and looking for a new job? The abovementioned report states that throughout the years in the past, many workers had been replaced by technological innovations, but this had led them to find jobs with higher salaries, consume more, create a number of new workplaces. This pattern might be applicable to the situation in the future.

Automation is not a completely new trend. The first robots made their way to the United States in 1961, and since then they have been increasing productivity and making people’s work easier. Right now, a lot of IT processes are performed by algorithms.

Robots can be both complements and substitutes, and cooperation between robots and humans allows for discoveries that neither can achieve on their own. RPA in biology and medicine is believed to have tremendous potential. RPA in IT provides an opportunity to pass all routine work to robots and let humans do the work that requires creativity and imagination. Thus, the situation is not as black-and-white as it may seem.

Those employees who find themselves in the ‘risk group’ require additional training to be able to quickly and smoothly move to new jobs. New generations of workers are already aware of the importance of RPA and other emerging technologies, and they are more likely to be adapted for the upcoming tech revolution.

It is still unclear whether the pace at which the innovation happens will leave a lot of people unemployed in the next year or two, or it will happen gradually to give people time to regroup and retrain. But being aware of the trend might be the best solution at the moment.

How Robots Will Change the Way We Work

Companies Are Using Big Data Without Realising It

IBA Group
Mark Hillary

Big Data is one of those buzzwords everyone is talking about, but as I have been saying for some time now, most companies are performing some kind of data analysis on their customers or suppliers and have been doing so for years without ever calling it Big Data.

There does come a time when the data being analysed is so huge and fast changing that specific Big Data tools are required, but the reality is that many organisations are already performing some kind of data analysis that could be termed Big Data – without them even realising it.

A new study from Dresdner Advisory Services backs up my observations. When asked specifically if they use Big Data, just 17% of companies responded yes on this survey. 47% said that it might be used in future. However, 59% of the respondents also claimed that Big Data is “critically important” to their business. Something is wrong?

The survey shows that the definition of Big Data is perhaps one of the problems here. Most companies don’t have petabytes of data to analyse and they therefore are performing data analysis, but not thinking of it as Big Data analysis. If the manager doesn’t think of the problem as big enough then they don’t use the term Big Data.

However there are many areas of industry where this is about to change, largely driven by technologies such as mobile and the Internet of Things. Think of an example such as a retailer needing to create the same customer experience for an in-store customer, as that same customer would receive online.

These problems require data. They also need it to be analysed fast. While a customer is in-store and tracked using their mobile device, decisions can be taken about whether to give the customer a discount code based on their profile. During payment, recommendations for other products can be made based on sales history.

All these processes are easy to imagine, some retailers are getting this sophisticated now, but to make it happen it needs the IT system to be joined-up with data that can be analysed in real-time – allowing the system to take decisions itself.

Another easy to imagine examine is with automobiles. Cars are increasingly connected to the Internet via smart phones and wi-fi. They will increasingly diagnose problems and communicate with the manufacturer without the driver being aware that the car is fixing itself. The amount of data captured and exchanged for this to work is enormous, yet in most cases the customer is entirely unaware of the processes taking place.

So how big is big might still be a question for many, but I think that we are on the cusp of an explosion in data use – analysing this much information will certainly be a part of the bigger picture for Big Data.

Nearshoring Back On The European Outsourcing Agenda

IBA Group
Mark Hillary

The debate over nearshoring and more remote offshore outsourcing has rumbled on for years in Europe. The debate over voice contact centres was fairly conclusively resolved a while back, with it becoming clear that most clients prefer their contact centre to be closer to home, but the broader IT and IT services market has still embraced all kinds of outsourced model.

However in all the outsourcing predictions for 2016 I have seen the resurgence of the European offshoring model several times. For example, a recent report by the analyst Global Remote Services says:

“Nearshoring will continue to gain momentum in Eastern Europe – nearshoring is fast becoming an option which is seen as being more skill specific for businesses with a mixture of complex, high-end projects as they realise the value in keeping outsourced work close to where the business generally is. Nearshoring in Eastern Europe will continue to grow as it becomes attractive and competitive to the UK market, and also much ‘nearer-to-final-customer’ and ‘easier-to-manage’ versus far-shoring.”

We all know the typical arguments when comparing Eastern Europe to a more remote location, such as India, but I think it’s important than advisors are now focusing heavily on skills availability.

Outsourcing has long been considered a “lift and drop” business strategy, which is how it got the reputation for being all about saving cash. Let’s take a process, lift it out of the business and drop it completely into a supplier and get the same work done for less. That’s the old approach, but times have changed.

The boundary of organisations has become more blurred, particularly when expert skills are needed. Organisations are hired to provide those skills, but they work in the office of the client, with the client team. The client and supplier merge together to create a solution today, rather than the client firing an entire department and dropping those processes offshore.

Outsourcing has become a more mature business strategy and with a greater value placed today on skills and partnership, it’s no surprise that nearshoring is returning to the boardroom agenda.