Russia to Enter Informational Society

At one of the latest State Council sessions Russian President Dmitry Medvedev said that in 2007 Russia was among global top three custom software development locations (after India and China) in terms of deals value. He also noted that the infrastructural progress observed now paves the way for a transition to informational society.

In his turn Minister of Communications Igor Shchegolev suggested introducing tax concessions for local providers of software development services. He emphasized that some measures had already been taken but appeared to be not as effective as desired. According to Mr.Shchegolev, tax remissions will help lots of companies, especially small firms, make a step to the forefront and find their place at the market. He also added that at present national ICT industry still depends on foreign suppliers.

Moreover, Russian President suggested discharging those officials who are computer illiterate, launching internet educational centers, compensating students’ internet expenses, and introducing electronic copies of school record books and registers.

Source: CitCity

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Eastern Europe Came to Stay

In 2007, Europe saw a considerable increase in their outsourcing activities. Of about $12 billion in mega deals awarded globally in 2007, over two third (68 percent) were closed in Europe. The demand for offshoring among Western European countries rose by 50 percent from 2004 to 2006, with Eastern Europe being a favorite destination. McKinsey estimates that offshoring operations in Eastern Europe could triple, to more than 130,000 jobs, from 2005 to the end of 2008. Dell, IBM and Morgan Stanley in recent times have outsourced their operations to Eastern Europe. At present, Eastern Europe’s outsourcing business is approximately $2 billion, which is still not a big fraction of about $386 billion global market. However, according to Gartner Dataquest, the growth in Eastern Europe would exceed growth in the rest of the market over the next four years; the outsourcing business is expected to expand by nearly 30 percent in Eastern Europe by 2010, as compared to 25 percent for the global market. Eastern Europe’s software industry grew by 12.53 percent in 2006, and is expected to grow at a Compounded Annual Growth Rate (CAGR) of 10.87 percent until 2008.

Many CEE countries have already come up as compelling alternatives to traditionally established destinations for offshore software outsourcing. Poland, Hungary, and the Czech Republic have shown bright prospects in the IT outsourcing market segment, newer destinations in CEE, including Romania and Bulgaria, are upcoming too.

It is forecast that 2008 will be the biggest year for the expansion of IT-service delivery and outsourcing capabilities beyond India. This has already helped to open new markets in regions like CEE, which can offer long-term benefits to its clients. According to A.T. Kearney’s Global Services Location Index study, CEE countries continue to be popular among European companies that are seeking alternative locations for their IT and business-process outsourcing services. And it’s no wonder as this region offers an educated, multilingual labor force, talented professionals who are trained in key technologies, reliable IT infrastructure, moderate to low cost of labor and access to the greater EU. Its secondary educational system and technology-oriented higher education has made it a strong contender for software development, R&D and engineering services.

Source: Global Services magazine

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Security Essential in IT Outsourcing

Many companies ignore the security problems associated with IT outsourcing until it is too late, it has been claimed.

According to the Information Security Forum (ISF), IT outsourcing and offshoring are attractive because of their potential to cut costs and increase speed to market.

Simone Seth, author of a new report published by the group, said the long term success of the outsourcing project can be damaged by a lack of security expertise or poorly identified information risk.

"Failure to involve information risk managers at the start of a project and through its lifecycle increases the enterprise's exposure to risk," she continued, adding that this could constitute data theft, information leakage or disputes that may arise from questions of ownership of intellectual property.

Earlier this week, the Irish Sunday Business Post reported comments made by the PFH Technology Group, which claimed businesses of all sizes are now choosing to outsource their IT operations and requiring different approaches from their service providers.

Source:ihotdesk

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EPAM Chairman and CEO Arkadiy Dobkin named Ernst & Young Entrepreneur Of The Year® 2008 award winner in New Jersey

Arkadiy Dobkin, EPAM Founder, Chairman and CEO, was named winner of the Entrepreneur Of The Year®2008 award in New Jersey, Information Technology Consulting category, organized by Ernst & Young, a global leader in assurance, tax, transaction and advisory services.

According to Ernst & Young, the awards are given to entrepreneurs who demonstrate extraordinary success in the areas of innovation, financial performance and personal commitment to their businesses and communities. The awards nominees were evaluated by independent regional panels of judges who assessed contenders for each designated category by the following criteria: vision, leadership, achievement, and social responsibility reflected in the revenue growth, innovation, risk-taking, and personal commitment to the business and the community.

"Ernst & Young is pleased to honor outstanding business leaders such as Arkadiy Dobkin," said Keith Brownlie, Ernst & Young Entrepreneur Of The Year Program Director for New Jersey. "Winners of the Entrepreneur of The Year award build leading businesses and contribute a great deal to the communities around them. Their success helps our area grow stronger."

"I would like to thank EPAM co-founders, veterans, and all employees for their hard work and commitment to our common goal. This success can be attributed literally to everybody in the company, in North America and Europe, and I am happy and proud to be a part of this innovative and dedicated team," noted Arkadiy Dobkin, EPAM Chairman and CEO.

As a New Jersey award winner, Arkadiy Dobkin is now eligible for consideration for the Ernst & Young Entrepreneur of The Year 2008 national program. Award winners in several national categories, as well as the overall national Ernst & Young Entrepreneur Of The Year award winner, will be announced at the annual awards gala in Palm Springs, California on November 15, 2008. The awards are the culminating event of the Ernst & Young Strategic Growth Forum, the nation’s most prestigious gathering of high-growth, market-leading companies.

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SOA: Promising and Long Lasting Trend?

As Gartner notes, approximately half of all 2007 major projects in the world were made on SOA. According to analysts, 60% of organizations will adopt the approach, and by 2010 it will be used in 80% of new systems. IDC forecasts that corresponding software expenses will constitute 11 billion dollars.

Whereas 2007 was the year of pilot projects giving an opportunity to customers to test SOA efficiency when developing and using business applications, the year of 2008 will witness double increase in SOA-related expenditures and further development of the most successful projects as customers are willing to implement the technology into business processes.

Experts at SAP believe that SOA is a perfect option for companies that previously had to choose between standard ERP solutions and pricey custom ones. Still with all its advantages (flexibility in changing business processes, service security and reliability, cuts in operational IT costs) SOA is not a panacea for all technology integration problems a company may face.

Expert forecasts concerning SOA advancement in Russia are pretty optimistic. Up to 70% of projects will use SOA in 2008 and at least one of the reasons for this is that all the current middleware platforms some way or another already use SOA at present. Various verticals demand SOA implementation however only a few, Finance and Telecom, have mature enough IT processes and sufficient budgets to start off with SOA.

Forrester analysts expect leading software providers will spend the next couple of years on developing more dynamic applications with better support of cross-functional business processes. Although the demand for SOA is growing, they will have to find new ways to promote their business applications. Hopefully SOA will be a more promising and long lasting trend than all the previous technological tendencies as the focal point of SOA is business but not technologies.

Source: Cnews (in Russian)

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When Business Meets IT: Software Development Summit 2008

In the outsourcing industry, where trust, reliability and credibility are a passport to success, establishing personal contacts during face-to-face meetings of customers and providers are essential. Quite a number of industry events which bring all its representatives together are held regularly all around the globe to facilitate discussions burning issues, experience sharing, and establishing new business relations.

The eighth annual Software Development Summit took place in St. Petersburg, Russia earlier this month. The focal point of the Summit was all the segments of software development industry combining export, internal market, licensed products, and IT outsourcing. Belarus, Russia, Germany, Italy, the USA, Finland, Ukraine, and many other countries delegated their representatives to the event. They all had a wonderful opportunity to present new projects done both for foreign and domestic companies, to discuss world business development tendencies. The problem of work force and its training was also given careful consideration to as qualification of company’s staff is one of the prerequisites for customer base expansion, reputation build-up, and market share enhancement in today’s highly competitive environment.

Among those who took the floor there was Peter Schumacher, the founder and president of Value Leadership Group who described the New Competitive Paradigm in the European IT services. One of the 4 strategic options for Russian offshore IT services firms presented by the speaker was developing alliance with India, which at the first glance seems quite an unusual scenario. Although there may be a couple of techniques Eastern Europe’s and Russia’s ITO providers could learn from them trying to combine their skills with India’s scope and scale.

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Want to Stay in the Game - Be Progressive!

A clear correlation between IT organizations that deliver IT services at a more strategic level to the business, and how businesses perceive their IT organizations was revealed in the research conducted by a UK based industry analyst Freeform Dynamics.

It says: “There is indeed such a thing as the ‘progressive’ IT organization”. For such organizations it is important to be delivering services to the business at a strategic level meaning taking into consideration what can be kept in-house and needs to be sourced; learning from the experiences of more progressive IT organizations; adopting new working practices and of course, being more than just a cost centre!

Moreover, the research provides a number of steps IT organizations can take to deliver a significantly higher level of service to the business:

- The IT organisation needs to get the basics right
- Create a common language between business and IT
- Establish a peer relationship between business and IT
- Work towards co-ordinated goals and objectives
- Manage IT as a business-driven portfolio
- Foster relationships with key IT suppliers.

The conclusion drawn by the research is “the more progressive IT organizations will be better placed to manage the ongoing integration process that will be required, and deliver appropriate services to the business as a result”.

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