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Luxoft Issues 2007 IT PredictionsBy David Sims TMCnet Contributing Editor To be fair, they're not the only ones noticing that there are increasing advantages to Russian outsourcing. Last year industry observer Stan Gibson quoted CSC Program Manager Alan Guthrie, in Taastrup, Denmark, on some of the cultural differences favoring Russia as an outsourcing destination: "Russian and European cultures are different," he said. "The Russian team will work longer hours without complaining. There is a shorter workday in Denmark. The Russian style is closer to the U.S. style. They want to overachieve. Nothing's guaranteed. They want to debate. They want to understand why. They might be more compatible with an American client." And as Gibson notes, when storage products vendor Isilon set out to establish an offshore captive operation they looked at Russia, Ukraine and India before deciding that working with Mirantis, a Russian service provider, was the best approach. But on to the forecast: Outsourcing Gets More Agile. In 2006 there was increasing interest in employing the Agile development methodology in outsourced environments. This will continue to grow and expand in popularity in 2007. With the right people, project management and metrics in place this highly collaborative approach -- traditionally thought to be only for in-house teams -- will continue to speed client solutions to market. Hybrid Models Become the Norm. No one approach, in-house, on-site, ODCs or captive models, will rule the day in 2007. Each company will access its available global resource and skill pool and choose a variety of outsourcing and in-house combinations to reach its desired business and technical goals. Outsourcing -- whatever model or mix is ultimately chosen -- will become as commonplace as Six Sigma. Retention Eases Tensions. Clients want well trained, stable and vested vendor teams working on their engagements. In 2007 they will increasingly demand that vendors meet -- or preferably exceed -- the average industry retention rates of 85 to 88 percent as a requirement of winning and doing business. The Security Bar Is Raised. In 2007, all forms of security will make it on to the shortlist for any successful outsourcing engagement, system, physical, staff and disaster recovery. These elements must be locked down and fully integrated before true security can be achieved and clients will increasingly demand excellence on this front. Near Shoring Comes Closer. No matter where a company is headquartered or has operations, it will increasingly look to near shore development solutions to round out its outsourcing portfolio. In 2007 there will be increasing demand for outsourcing resources in Europe, Eastern Europe and Canada but this phenomenon will be seen with resources around the globe. Player Consolidation Continues. With the need for outsourcing providers to ensure scalability of services and support for clients, consolidation among smaller service providers with similar strengths and expertise will continue in 2007. Forrester Research (News - Alert), in its latest report has said that global outsourcing industry could face sweeping consolidation in the next two years, mainly driven by low-cost global competition and broken business models. Outsourcing companies will make expansion plans to compete with global leaders, to acquire vertical domain expertise as well as the access to the global resource pool. Consolidation growth will be most visible in the upcoming outsourcing markets like China and Russia with possible buyouts across the regions. Financial Industry Increasingly Banks on Outsourcing. In 2006 financial and banking companies came on more strongly as a consumer of IT outsourcing. In 2007, this trend will continue with areas like CRM in demand. Top of mind success factors for the vertical will increasingly be security, risk and financial market diversification, disaster recovery planning and engagement staffing standards. We’ll also see more real time areas like on-floor trading technology get in the outsourcing mix. Luxoft, founded in 2000, is a software developer and IT services exporter with operations in the US, Canada, UK, Ukraine and Russia. David Sims is contributing editor for TMCnet. For more articles please visit David Sims’ columnist page. What’s the number one VoIP  conference in terms of attendance? What’s the leading VoIP expo for exhibitors in terms of lead generation? And which VoIP industry event will feature special attractions for service providers, resellers, and the enterprise and SMB market, as well as an overview on the future of IP Telephony? Answer: INTERNET TELEPHONY Conference & EXPO EAST, January 23–26, 2007. See you in sunny Ft. Lauderdale! |