IT Sourcing Europe reveals some of the findings of the Dutch IT Outsourcing survey 2011.

IT Sourcing Europe, a UK-based nearshore IT outsourcing (ITO) research and advisory company, has recently completed its Dutch ITO survey, conducted in the frames of the All-European ITO research 2011. The survey was conducted online in February 2011 and taken by the 469 Dutch companies of different sizes and industry sectors. Forty-five percent of the survey participants admitted outsourcing their software development (SD) and/or some element(s) of the IT function nearshore, offshore or within the Netherlands, while fifty-five percent developed their software / IT solutions within own house.

The major trends benchmarked in the course of the survey demonstrate that in 2011 the Dutch ITO landscape looks healthier and more mature compared to the 2010 indications.

Overall, more Dutch companies began to adopt the outsourced software development at the end of 2010 and beginning of 2011, according to the research. Currently, non-outsourcing companies outnumber those that outsource their SD/IT by only 3.6%, while in 2010 non-outsourcers outnumbered outsourcers by 26.8%.

Regarding the value of the outsourced projects, the following trends are observed in 2011 compared to 2010: the number of the €0-49K projects increased by almost 10%, the number of the €50-199K projects dropped by 4%, the number of the €200-499K projects dropped by 2% and the number of the €500+K projects dropped by 5%. The finding proves 2011 to be the year of smaller ITO contracts. It is partly explained by the increased demand for / more active use of the Cloudsourcing solutions by the Dutch ITO buyers – up 18.3% from 2010.
While in 2010 the vast majority of the outsourcing companies partnered with their service providers via the traditional Offshore/Nearshore Development Centers (O/NDC) or fixed price projects, in 2011 there are more Dutch companies that tend to run own dedicated / virtual teams located remotely to complete the projects (up 34% from 2010). This trend can be linked to another trend observed: in 2011 more Dutch companies from innovative lucrative niches such as mobile computing, casual games development, social media, 3D animation and augmented reality begin to adopt the outsourced application development (up 32% from 2010). Since most of these companies are innovative startups and/or venture capital funded companies, they strive to have as much managerial control of their projects as possible and predictable ITO agendas, which are hard to achieve when using DDC or Build-Operate-Transfer (BOT) models.
Overall, in 2010 the vast majority of the Dutch ITO buyers were somewhat satisfied with their ITO partners and service providers, while in 2011 the majority of outsourcers are very satisfied with their partners – up 20.4% from last year. On the other hand, the percentage of ITO buyers who are very dissatisfied with their ITO providers increased by 5.1% in 2011, compared to 2010.

Source:http://www.openpr.com/news/166000/New-Research-Reveals-the-2011-Trends-in-the-Dutch-IT-Outsourcing.html

Ask CIOs what their biggest professional frustration is and the answer might surprise you, says former CIO Mark Hall. It’s not rogue systems, shrinking budgets or network outages, says the now CEO of xPeerient, provider of an online community for CIOs. “The repeated issue every year-what keeps CIOs up at night-is the sales and marketing practices of technology vendors. It’s a cat and mouse game. It’s not efficient for buyers; it’s not efficient for sellers. The whole relationship is problematic.”

Hall recounts the story of the pharmaceutical company CIO-a marquee customer of a major software and services vendor. The CIO was holding two days of strategy meetings attended by the vendor’s very famous president. On day two, the CIO’s administrative assistant messages him that someone from the vendor company is on the phone and transfers the call to the CIO’s cell. “Hello, sir. I’m so-and-so in corporate sales,” says the voice on the line. “And I’d like to find out if you have any software needs.” The cold caller was employed by the very IT vendor whose president was sitting across the table from the CIO. “That’s the kind of disjointed approach to relationships that vendors have,” says Hall. “You’d think the vendor would have a better CRM system than that, but the right hand doesn’t know what the left hand is doing. That kind of bungling happens every day.”

Hall says he wants to level the playing field between IT buyers and sellers and xPeerient has introduced a platform for CIOs to anonymously initiate the buying process with vendors. But his own sales pitch aside, Hall says somethings got to give-particularly in outsourcing, a relationship business where starting off on the right foot is critical. “The core problem is how buyers and sellers are introduced,” Halls says. “It’s fraught with friction.”

CIO.com talked to Hall about how much money technology vendors waste on lead generation, the trickiest techniques IT leaders have developed for evading dogged salespeople, and how to fix the broken tech services marketplace.

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CIO.com: IT spending around the globe continues to grow. IT organizations spent more than $3 trillion in 2010, more than $800 million of that on outsourcing. But you say vendor sales tactics are stuck in the dark ages.

Mark Hall, CEO of xPeerient: The core problem is the way buyers and sellers are introduced. It’s inefficient. It’s built around the language of war, with sales teams talking about campaigns and ground fire. There’s friction and distrust. IT vendors spend $25 billion a year doing lead generation for internal sales, according to IDC.

Source:http://www.computerworld.com/s/article/9214101/Outsourcing_Why_CIOs_Hate_How_You_Sell_IT_Services

International energy firm E.ON has stated that IT outsourcing is playing a crucial role in its new efficiency programme.

According to the company, it has made savings in excess of €1.1 billion (£940,000) in the past year by moving many of its IT functions to two outsourcers as part of its Perform To Win programme.

Shared services have helped keep maintenance costs lower, while effective standardisation and streamlining have also played a part, E.ON notes.

The company has invested £890 million in a private cloud computing deal, citing the importance of “consistent, innovative and agile IT services” to an effective organisation.

E.ON will continue to operate an in-house IT strategy, applications, security and power station control systems.

Figures released recently by Tata Consultancy Services indicate that the beginning of the new financial year on April 6th will see more companies able to budget for IT outsourcing in order to improve their efficiency in the long run.

Source:http://www.ihotdesk.com/article/800453985/EON-invests-heavily-in-IT-outsourcing

Demand for IT outsourcing will rise in the upcoming new financial year, it has been claimed.

According to Tata Consultancy Services (TCS), demand across verticals will be “robust” from April 6th, with companies splashing out more on discretionary spending due to higher budgets.

Chief executive N Chandrasekaran told IT Web that financial services, retail, manufacturing, banking and technology companies will present particular opportunities for outsourcing firms hoping to secure new clients.

“Demand is quite robust. What I see on the ground is the spend increasing and 2011-2012 will be a better year for the industry, better for growth,” he noted.

Mr Chandrasekaran added that demand for IT outsourcing will also rise in North America and continental Europe.

In related news, TUI Travel recently committed to a six-year outsourcing deal that focuses on IT Infrastructure Library (ITIL) systems and cloud-based asset management, on top of round-the-clock technical support for users.

Breaking news from ihotdesk, the home of IT outsourcing in London

Source:http://www.ihotdesk.com/article/800451307/IT-outsourcing-demand-to-rise-in-2011-12

E.ON, which is in the midst of a major efficiency programme, has said IT outsourcing is playing a major part in the changes.

The electricity and gas utility said today that it had achieved over €1.1 billion cost savings (£940,000) during the last year, as it moved a number of IT functions from being run in-house to two outsourcers – a transition that affected around 1,400 jobs.

The savings were achieved under its Perform To Win programme, which includes extending shared services and effecting standardisation, streamlining processes, and improving procurement, sales and marketing.

E.ON connecting HP outsourcing deal for £892m E.ON plugs into multibillion pound outsourcing deals with HP and T-Systems
The news comes as the company announced its annual net income tumbled 30 percent to €5.9 billion. E.ON is now targeting €1.5 billion total savings by the end of next year, and a further €600 million by the end of 2013 – taking the total to €2.1 billion (£1.8 billion).

Under the plan, HP runs E.ON’s data centres and PCs – in an £890 million deal that will include the provision of ‘private cloud’ computing. HP already supplies hardware, support services and managed print services.

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The utility’s IT networks are run by T-Systems, which has a deal worth up to £860 million dependent on its eventual duration. Both the HP and T-Systems deals will are expected to run for an initial term of at least five years.

At the time of signing the deals, E.ON said it needed “consistent, innovative and agile IT services”.

As part of the outsourcing deals, around 1,100 E.ON staff are moving to HP and approximately 300 to T-Systems. The 2,700 remaining in E.ON’s IT department will continue to decide IT strategy, and run applications, security and the main power station control systems.

While E.ON’s overall workforce size remained at around 85,000 employees, UK staffing levels declined eight percent to 14,830 staff, a reduction the energy firm said was “mainly attributable” to IT changes, efficiency measures in retail operations and the divestment of its energy services business.

Source:http://www.computerworlduk.com/news/outsourcing/3264290/eon-powers-up-it-outsourcing-to-aid-18bn-cost-cutting/