webinar - global it shifts to spain

Spain, Your Destination for IT Sourcing

Global IT Shifts to Spain


• Founded in 2008 by the AEC (the Spanish association of consulting firms)

• AEC members represent over 80% of the total ITC turnover.

• Employ over 60% of the professionals in the sector.

• The organisation is backed by the Spanish government

• Value Shore aims to promote and simplify sourcing to Spain.

• We ensure companies have the information to shortlist prospective partners

– organising and funding site visits

– access to lawyers and contract specialists

– advising on the potential tax breaks

– independent quality control

Spain, Your Destination for IT SourcingSource: Vanson Bourne, OmniBoss Report February 2010

Spain, Your Destination for IT SourcingSpain, Your Destination for IT Sourcing

Euan Davis Principle AnalystForrester Research


Talking points

• Recessionary pressure continues to dominate IT spending

• New ways of contracting emerge linked to sourcing maturity

• Firms seek common service essentials from globally configured sourcing deals

• Offshoring no longer just equals “India” but many European minds fixate on the Indian pure-plays

• Clients seek to reduce risk and investigate near-shore options closer to home


Agenda

• Why executives need global delivery strategies

• Firms move nearshore to solve offshore issues

• Spain emerges as a credible offshore destination


Watch for a surge in leveraging global service delivery

Desire to increase applications and infrastructure outsourcing

Europeans vote with their wallets


Understanding Global Delivery

• Integrating rich domain expertise, broad technical skills, and project management discipline across a network of low-cost locations through consistent and robust processes, tools, and infrastructure to maximize the timely delivery of superior IT and BPO solutions

Spain, Your Destination for IT SourcingAugust 2009 “How Europeans Tune Global IT Service Delivery Models”

Service scope sticks on application work


Agenda





The changing offshore location dynamics

• Many countries are jumping on the offshore bandwagon as an economic development strategy

• But just because the Economics Minister says it’s an offshore location does not make it so

• Country assessments focus on government stability and infrastructure quality

• But not important issues like cultural affinity for offshore work and the scale and health of indigenous vendors


Security

Time zonedifferences

External risks

Countryinfrastructure

Managementchallenges

• Lack of governance• Lack of management• Weak IT processes/outsourcing process

maturity (requirements gathering, change management, specification writing, testing/QA, SLAs, documentation)

• Internal customers unprepared for the rigidity of the outsourcing relationship

• Improper project selection• Unrealistic expectations• No recognition that vendors lack business

knowledge

External risks compound internal risks

Cultural and languagedifferences

Distance tovendor

Vendor stability

Governance

External risks

Aggressive blends exacerbate internal risks

Source: Forrester Research


European firms seek nearshore skills

• Some countries are more mature than others– Mature nearshore delivery hubs in Eastern Europe – Russia rich in software development expertise– Spanish industry expertise

• Many European service providers focused on Poland– Pure plays have gone further East

• What counts in deciding a nearshore location– Country stability; infrastructure quality, cultural

affinity and the quality of local labour count• What about Spain?


Agenda





Skills, scale and location underpin Spain’s appeal

• Large skilled IT labour pool– Check out the ratios

• Industrialized software factories– Check out how the rates compare

• Domain expertise– Check out the large firms punching above their weight

• Potential to scale with Latin America– Spain/Latin American delivery model offering skilled

pool


IT salaries feed lower rates


Graduates feed a large local IT labour Pool


Which firms should consider a move to Spain

• Spain as an alternative to India– Make an inventory of current applications– Document current best practices– Pilot applications with the right critical mass– Invest in the business analyst function

• Spain as a source of complementary skills– Specific functional process expertise – Investigate the industry and IT service capabilities– How can the model scale through Latin America

Spain, Your Destination for IT SourcingFebruary 2009 “Complementing India With Nearshore Strategies: Spotlight On Spain”

Spain as an alternative to India? Decision steps


Spain as a source of complementary skills?

• Do your internal preparation• Make sure you have a

transformation roadmap—how you will move

• Make sure you have sufficient sourcing deal governance

• Operational control of the nearshore service delivery model


Focus on the site visit and locality for success

• Site visits are an essential part of the sourcing process– Meet them on Spanish soil

• Leverage the regional autonomy – Offers negotiation levers on business tax rates– Drive discounts on a deal with location rebates

• Seek out local support organizations – For advice and back up– Value shore team; Invest in Spain


If you remember nothing else

Spain offers a credible nearshore destination3

European firms need nearshore options2

Global delivery is used in most large outsourcing deals1


Check out the Valueshore Bulletin:

• Quarterly bulletin targeted at IT and sourcing decision makers

• Includes• Executive Q&A• Regular features• Contract news• Spanish IT news


Euan Davis

[email protected]

Complementing India With Nearshore Strategies: Spotlight On Spain: http://www.forrester.com/Research/Document/0,7211,46904,00.html

Thank you

mailto:[email protected]

http://www.forrester.com/Research/Document/0,7211,46904,00.html


Final Questions, Comments, Discussion?

webinar - global it shifts to spain

Business

global service delivery8

sourcing maturityfirms

timely delivery of superior

offshore issuesspain

spanish government value

common service essentials

credible offshore destination7

shore options closer