SAP Solutions in Central and Eastern Europe Pick Up Steam

At the end of November 2011, SAP AG, a leader in business management solutions, software, and services, announced a significant NearShore expansion. The company plans to fundamentally boost its Romanian operation (with an organic growth up to 400 consultants by 2014) and improve its consultancy services to customers across Europe, the Middle East and Africa (EMEA).

Director of the SAP NearShore Center Romania, Gheorghe Olteanu, reasoned such heavy investment plans by the “scalability, good universities and language advantages” of the CEE region. “Moreover, Romania is the third largest country in Europe and part of the European Union. Of course, the lower level of salaries in Romania compared to the Western market that we are serving is also advantageous for us. The salary a consultant starts on is at least twice the average salary in Romania,” added Gheorghe Olteanu.

The SAP NearShore Center is planned as a comprehensive facility with highly professional SAP consultants and developers on board capable of performing most complex engineering activities. The center primarily targets support of customers in Western Europe and better project delivery in such countries as Austria, Belgium, Germany, Luxembourg, the Netherlands, and Switzerland. SAP solutions in Eastern Europe enjoy a high reputation worldwide due to immanent high quality implementation and high standards of delivery.

Source: Business Review

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The OI’s Founder Comments on Outsourcing Transformations

Today, outsourcing is a widely used practice for organizations striving to improve their productivity and reduce costs. Having left doubts “if we should do it at all?” in the past, now they have to choose from a wide range of outsourcing destinations that exist and keep appearing on the global market to understand where their outsourcing best match is located.

Frank Casale, CEO and chairman of the Outsourcing Institute, gave an interview where he commented on how outsourcing has changed since its early days, and the factors that should be considered when outsourcing offshore.

In the early 90s most of the outsourcing was big deals with big companies that were in big trouble. And it was mostly U.S. Nowadays there are tons of outsourcing being done in the mid market and smaller firms.

Moreover, as Mr. Casale notes, there is a certain shift to back end of the transaction and even post contract signing. “Managers are realizing that the work begins after the contract is signed and it’s really all about governance and relationship management”, he says.

When companies have already decided to outsource, they have another challenge to face - where to outsource and whether to go offshore or not? Here are some tips suggested by the OI’s chairman.

- Bring in an advisor or just be very active within whatever networks you participate; another option is to do some research. “This will give you a sense of where you can find high value, high cost savings, and low risk options,” Mr Casale says.

- When choosing an offshore destination it’s necessary to determine the factors that are crucial for you and then to weight those factors: time zones, cultural compatibility, language, cost. You no longer have to go necessarily to India - there are alternatives like Eastern Europe or Latin America. Not only do you have cost savings there, but its closer proximity, less of a time zone issue, and a place more people are attracted to going every couple of months on a site visit.

- Don’t “put your eggs all in one basket. Most organizations are doing some things in India, some things in South America, and some things onshore”. If something goes wrong with one of your providers, then you have some other to rely on.


Source: blog.devongroup.com

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Eastern Europe: The next silicon valley?

One key to driving healthier economies in the countries of Eastern Europe, particularly in the former Soviet republics, could be significant investments in Web 2.0 development. Could Eastern Europe foster its own Silicon Valley?

The Soviet Union had its own technology capital once, though you might be surprised to learn it wasn't located in the Russian Federation.

"Belarus was regarded as the 'Silicon Valley' of the former Soviet Union, manufacturing over 50 percent of the computers and components in the former USSR." said Sergei A. Rachkov, deputy permanent representative, Permanent Mission of the Republic of Belarus. "The country is able to provide expert services in application development and testing. Belarus’ software and IT services sector is one of the most successful and fastest growing industries in the country." Rachkov spoke on Wednesday before an audience at an UN conference in New York entitled, "The UN Meets Web 2.0 and ICT Entrepreneurs."

Although India's success story garners a lot of attention, countries in Eastern Europe are also turning to IT as a way to upgrade their economies. During the UN's Web 2.0 conference, representatives of Hungary, Belarus, and Croatia talked up government and private sector initiatives that have helped to lure the likes of Microsoft, IBM, Cisco and SAP to either outsource services from or set up shop on Eastern European turf.

Meanwhile, Rachkov said that, back in 2005, Belarus set up a High Technologies Park. Since then, about 40 domestic and foreign companies -- including software developers and exporters -- have become residents of the Park, Rachkov said.

Rachkov cited Belarus companies IBA Group and EPAM Systems as two of "the largest and most established European IT outsourcing providers based east of Germany." These and other companies in Belarus "have world-class project management infrastructure [and] certification, and [they] successfully serve world-renowned clients, including IBM, Colgate-Palmolive, Samsung, Siemens, Alcatel, British Telecom, Ford-Union, and Microsoft," according to the Belarusian official.

Source: BetaNews

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The 2008 Global Outsourcing 100 announces winners: the Russians excelled!

The International Association of Outsourcing Professionals (IAOP) has finally announced the long-awaited Top 100 world outsourcing service providers. Four critical characteristics are taken into account by an independent jury: size and growth, customer references, organizational competencies, and management capabilities. It’s good news to know that six Russian companies have been included in the rating in comparison with only four in the previous year: Auriga, DataArt, EPAM Systems, IBA, Luxoft, and Mera.

The results of the rating speak for themselves: the most rapidly growing segment of IT services in Russia is IT outsourcing. As Maxim Troitsky, director of special solution and service sales department at ISG, says “…those engaged in retail sales, finance sector arrangement, and several state enterprises and institutions, are currently especially interested in strategic outsourcing cooperation”. Though, India is still occupying leading positions in outsourcing, Russia and CEE countries seem to be close at its heels. “The given sector [IT outsourcing] is becoming more and more attractive from year to year, as many recent obstacles have been eliminated’, says Troitsky.

However some experts claim that the attraction of Russian and Eastern European countries as outsourcing destinations is the result of constant price rises and overheated labour market in India. “The Eastern European IT outsourcing is becoming more popular… due to India image downward”, as Anatoly Gaverdovsky, senior vice president of EPAM Systems, says. But however that may be, specialists point to the interest of global players in the Russian outsourcing market as one of last year’s key tendencies.

Source: CNews

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Hungary on the Offshore IT Services World Map: EPAM’s presence

Russia isn't the only game in Eastern Europe, though. Countries such as Poland, Romania, Bulgaria, Czech Republic and Hungary are all growing technology hubs. Like Russia, they are reaping the benefits of one of the few positive legacies from the Soviet era - a well-established education system.

EPAM Systems, for example, is a leading provider of outsourcing services in software development, technology reengineering and application testing. Belarus, Russia, Ukraine, and Hungary locate EPAM’s large-scale software development centers, while the USA and UK house the company’s client support and delivery units. EPAM’s Hungarian customer base includes London Stock Exchange and British Telecom (BT).

It helped BT Group, one of the largest telecom providers in Europe, for example, develop a massive customer portal. BT Global Services, a subsidiary of BT Group, is a service provider helping organizations master the complexity of business communication. The company has coverage in more than 200 countries across five continents, 20,000 skilled professionals and one of Europe's most extensive IP-enabled networks. Its old online B2B system was inhibiting growth.

"It was too tightly coupled with the backend systems," says Andy Pennington, senior product manager within the Virtual Business Center (VBC) BT Global Services. "Changes were complex owing to over-engineering and we were relying on a hybrid set of technologies."

EPAM helped BT Global Services deploy VBC using BEA WebLogic Portal 8.1. It is an online B2B resource area used by more than 1,500 multi-site corporate customers. It enables real-time Web-based access to a suite of service management and collaborative applications. It supports the company's virtual IP VPN network solution. Customers can raise and review orders, as well as access interactive tickets and service requests. They can also manage their inventory and configuration changes.

To accomplish this EPAM opened the BEA WebLogic NearSourcing Center (WNC), headquartered in Budapest. It comprises more than 700 experienced BEA WebLogic and AquaLogic engineers.

"We estimate that using the WebLogic NearSourcing Center was a quarter of the cost due to the expertise and efficiency of the team as well as the relative price advantage of near-shore resource," said Pennington.

EPAM CEO Arkadiy Dobkin lists similar advantages in Hungary to those mentioned earlier about Russia. Mark Minevich, an analyst at consulting firm Going Global Ventures, takes that a stage further. He ranked Hungary fifth as an ITO outsourcing destination behind India, China, Costa Rica and Czech Republic.

Source: Tech-2008

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