Softage Inc - Outsourcing Press Releases

"There is Russian spirit here, it smells like Russia," – today this phrase can be heard not only in Russian fairytales but also in a tangled multi-level structures of the modern Internet. From the time the Internet came to Russia, one of the leading world powers has staked a claim to its segment of the Internet which does not only impress by its scale but also makes you think about the special, new beginning of Internet. And speaking about the development of the global network today, we cannot fail to note that a part of the Russian spirit has contributed to a great number of Internet projects and the Internet itself. However, that contribution has created not only the positive images of Russians in the Internet but negative stereotypes as well, which were very quickly transferred from real life to the virtual one. So, what is it, that thin line of Russian soul of modern Internet?

"Vodka, frost, bears, matreshkas, hats with ear-flaps” all that was there before. "Carders, phishers, hackers, cheap scripts, shady schemes, exchangers, WebMoney," that is what is here now. Such evolution of the Russian stereotypes has taken place within 20 years in the eyes of any resident of the globe who lives to the west from Poland. It is not a secret for anyone that the Russians came to Internet for a good long while and have secured a number of business niches for themselves. They have created and filled a public opinion about the Russian IT-specialists with a unique romanticism and quite different and sometimes silly stereotypes.

Are there IP addresses of some exotic tropic countries in the logs – the Russians have visited this place.

The site works on the automated scripts and brings more profit than an oil derrick in Texas? – Surely Russians.

If you have been provided an ICQ number and especially if it consists of 5 or 6 digits you shouldn’t expect to find there anybody but the Russian. Perhaps, this is the romanticism of Russian IT-specialist. Any foreigner has already been accustomed that Russian IT-specialist is a professional, who can barely be 16 years old, but has under his subordination not less than Sergey Brin does, who, by the way, had created Google, also has Russian roots, and speaks Russian not so bad. But how should you run a business with Russian online? How can you understand their unique point of view and still have an above zero account? Let’s try to answer these questions.

First of all, one should understand the written truth, that lays as the foundation of Russian mentality.

So, first of all, you must understand that for the majority of Russian people the business is called business only when it bring the rate of return above 50% and sometimes even 100%. Discussing with the Russians interesting, but boring projects that will provide no more than 20% of the profits, be prepared that you will simply be denied. Why? Because the Russian do not like to wait, they prefer to work by large, even with investments, but with a large and quick returns.

Working with a Russian partner, remember that the representatives of that great Eastern European nations do not like the documentation, formalities and can simply not understand some of your suggestions on documentation of the partnership. They should not be blamed, as to convince of the majority of IT-Specialists from Russia, the paper only holds back the creative process and makes friendly relations of partners somewhat cold.

Doing business with the Russians on the Internet, remember that they love and appreciate beauty in all. So if we trace the movement of the entire cohort design thoughts of designers from Russia and the CIS, it can be noticed that the virtual creators tend to produce very beautiful sites. If you are a designer, do not attempt to propose to your Slavic partner something reminiscent of Craigslist, even if that costs millions.

In communicating with business partners from Russia, one should firmly remember the rule - never insist on a telephone conversation. Of course your partner will know English, and quite well, although with an accent, they will still be ready to discuss a lot of matters with you, but if you are doing business online, communication according to the view of most Russian IT-professionals should also be built on the basis of network protocols. Russian value time much to spend it on such formalities.

Building up a conversation, try to exclude courtesy as much as possible, and if you think that the standard and usual «Hey, how is it going?» will positively affect the other person, be aware that any Russian feels truly perplexed when he is asked this question. He does not only feel unpleasant from you being interested in his affairs, but most importantly, the purpose of such an issue is not clear to him, because the answer is usually always the same.

If you chose Internet as a platform for communication, remember that almost everyone in Russia uses ICQ. Offer on communicating through MSN, Yahoo, QQ, Skype and other messengers will cause your partner negative emotions associated with the anticipation of the time lost to install the messenger.

Working with the Russians, you should bear in mind another important point which needs to be amended seriously – these are holidays. Holidays in Russia are more than a few days off. Perhaps the most protracted of all the public holidays are New Year. Objective answer to the question why they are continuing from 31 December to 10 January does not exist, take it simply as a part of mentality of the mysterious Russian soul. In the period after the new year any activity fades, traffic reduces, demand for all types of goods and services online drops, it is almost impossible to find someone at that time. Feast of Russia is reflected in the world, and the scale of this is so great that in the days from 31 December to 10 January, even the owners of credit cards around the world celebrate the reduction of crime and incidents of missing funds from the accounts. So, if you plan to start the business year from early January, please record the first two weeks of January to the costs. In addition, there is also a festival in Russia that paralyzes the minds of the whole world - Old New Year, celebrated on 14 January and stretches holidays in January to almost three weeks. So, when you are desperate of waiting when the ICQ flower of your partner turns green, at this point, he will surely appear showing his happy status and being interested in how partners spent the New Year party, sometimes forgetting that his western counterparts give priority to Catholic Christmas.

However, experienced business people on the network can tell you with confidence that working with the Russians will become a pleasure if you simply know all the rules listed above and build relationships in a respectful manner. As representatives of the great ancient nations, the Russian, often require you to respect and appreciate their work. But this is when we are talking about top-level professionals. If we take the working crew, of course, be aware that the Russian segment of the Internet is a perfect place to find cheap staff.

In conclusion I would like to advice, do not try to remake the Russians, it is better to try to understand their subtle Russian soul. And if you do this, if you can at least somewhat understand this noble, but a unique kind of people, you are provided with success in business and warm friendship with the Russians.

International IT market is resisting the downturn

Turnover in information technology in Western Europe to increase by 2 percent in 2009
Strongest growth in demand is for software and IT services
IT systems helping businesses to manage the crisis
Source: http://www.eito.com

Despite the weakness in the international economy, demand for information technology (IT) will continue to increase in the coming year. According to the new forecast of the international market research institute EITO, turnover of computers, software and IT services in Western Europe will increase by 2 percent in 2009, to a round 315 billion Euro. "IT expenditure of businesses will continue to grow even in an economic recession", said EITO chairman Bruno Lamborghini.

"Information technology is of strategic importance for companies in a crisis situation because it makes operations more efficient and more economic." Increasing demand for IT was also to be expected from contractors working in the public sector, where investment has limited dependence on economic fluctuations. According to the latest forecast, providers of software and IT services in Western Europe will achieve a substantial increase in turnover of 3.2 percent in the coming year, to 228 billion. In comparison, manufacturers of IT hardware are facing a loss of 1.3 percent, to 87 billion Euro.

The EITO market researchers are expecting development of the IT market in Western Europe, which includes the 15 core countries of the EU with the addition of Switzerland and Norway, to be more robust than in the USA. IT turnover in the United States is forecast to grow by 0.8 percent to 347 billion Euro. Before the global financial crisis became more acute, EITO was assuming growth of the IT market at a level of 4.4 percent in the USA.

The global IT market for the year 2009 will grow, according to the EITO forecast, by 2.7 percent to 983 billion Euro. As in Europe, suppliers of software and IT services around the world are growing particularly strongly. Their turnover world-wide is forecast to grow by 3.4 percent to 677 billion Euro in the coming year. The hardware market is increasing by 1.3 percent to 305 billion Euro. The driving forces are emerging markets like Russia, China and India, which still have some ground to make up in developing their IT infrastructure. "So far, the IT industry has navigated the economic storms with relative stability", said Lamborghini. This showed the increasing importance of information technology for business. "Modern IT systems", said Lamborghini, "lead to lower costs, promote innovations in products and processes, and are therefore an important instrument in managing the crisis."

Contact:Maurice Shahd, Press Spokesman, m.shahd@bitkom.org
Dr. Axel Pols, Chairman EITO Task Force, a.pols@bitkom.org

How to mitigate the security risks of outsourcing

Outsourcing any part of your business is a risky step, as it means handing over control to another company. The outsourcing supplier may do a better job of the outsourced process than you could, and for a lower cost, but there is also a chance it will get things wrong. And if something goes wrong, it is your company's name that will feature in the headlines.

So, anyone looking at outsourcing needs to think carefully. It is essential to understand the risks, and to take all reasonable steps to keep them to a minimum.

It is also worth keeping the risks in perspective. Since the days of the computer bureaux in the 1970s, companies have given payroll processing to outside suppliers to handle, and for the most part those specialist companies carried out their task without a problem.

But IT is now much more than payroll and accounts. It is intrinsic to the running of the business. Everyone has a screen on their desk, and IT supports virtually all business activities and provides vital links to customers and suppliers. Handing all that over to an outsourcing supplier needs careful thought and planning.

The attraction of outsourcing, whether locally or overseas, is that it can help cut costs and make them easier to manage and predict. In some cases, outsourcing may also be seen as a last resort to solve an intractable problem - in other words, leaving someone else to sort out the mess.

Outsourcing can be effective, but the people who do it successfully all agree that thorough preparation is essential. Rushing into an outsourcing deal to solve a problem is likely to lead to more trouble.

Paul Simmonds, global information security director at chemical supplier ICI, says outsourcing should not be an excuse to walk away from a task. "The biggest mistake people make is not managing the outsourcing supplier properly," he says.

When Simmonds joined ICI, it had outsourced most of its IT to a range of suppliers around the world, with the majority going to IBM Global Services and Atos Origin.

Simmonds has continued the trend by outsourcing the majority of ICI's security processes. For example, he uses IT security supplier Qualys to check that ICI's desktop systems are being properly patched, thereby getting one outsourcing supplier to monitor what another is doing.

He also outsources e-mail management to MessageLabs, and is on the verge of going to another supplier for web filtering.

Outsourcing security might seem a bridge too far, but he says the move raised no eyebrows among senior management. "The corporate culture is to outsource key non-essential services. It is all a question of assessing the risk, and asking if an outsider can do it better than we can," he says.

He says outsourcing works best when you can ring-fence the task and have a clear interface with the outsourcing supplier.

"You have to know the boundaries. It fails if the company does not define its interface. If they do not understand the problem, then they will not be able to manage the process. If you have an understanding of the problem and plan the outsourcing properly, then your chances of success are greatly increased," says Simmonds.

The planning process should involve spending time to get to know the outsourcing supplier and making sure you are compatible, says Donal Casey, a principal consultant with IT consultancy the Morse Group.

"It is almost like a marriage," he says , adding that it is essential to get an understanding of how the supplier works, rather than accepting its marketing messages at face value.

Recognised working standards, such as ISO 27001 for information security, are a good indicator that the outsourcing supplier takes security seriously, but they are not a guarantee.

Marcus Alldrick, a principal advisor with consultancy KPMG, says some certifications are less reliable than others. "There are some fast-track certifications, so it is worth checking who did the accreditation," he says.

It is also crucial to check what part of the business the certification covers. If it covers HR and you are looking to outsource firewall monitoring, it is not much use, he says.

So begin with a risk assessment, look at the potential business impact if the process in question goes wrong, and assess whether outsourcing would make you more vulnerable.

The higher the risk, the more checking you will need to do with the prospective supplier. In all circumstances you need to get to know them and how they work.

It is essential to carry out due diligence on site, says Alldrick. Work with the outsourcing supplier's people to gain an understanding of their processes, and check the company's controls are embedded in its processes, whether procedural or technical.

For example, check to see if staff try to bypass controls, such as by sharing passwords. Also, check how the company manages starters and leavers, and how quickly the process happens.

"When someone leaves, is their user ID reallocated, and what controls lie behind it? Can you gain accountability for any user ID for any given time, because that is what it is there for," says Alldrick.

Depending on the level of risk, this process of getting to know the supplier may take weeks or months. "You are relying on the outsourcing provider to manage aspects of risk on your behalf. You need to recognise that, and so does the outsourcing supplier. You need to engage with them and take time to perform due diligence.

"You need to make sure they practise what they preach. Just because you outsource, it does not mean the problem has gone away. So you must build a proper relationship," he says.

Alldrick suggests assigning people in your company to work with their counterparts in the outsourcing supplier, so that a proper relationship can be built and maintained over time.

"Relationships are important, because if and when things go wrong, you need to work together. A close working relationship is essential when it comes to incident management," says Alldrick.

The dangers of poorly managed risk are particularly evident in the energy industry. Ian Campbell, chief information officer for British Energy and chairman of the Corporate IT Forum, lives with the risks all the time, and so any outsourcing has to be done with caution.

"We have to go through all the checks. We vet the outsiders in the same way as we vet ourselves, and that includes penetration testing," he says.

As with many industries, most of these measures are prescribed by industry regulators, which will view the outsourcing supplier as part of the wider virtual organisation and subject to the same standards.

"We ask suppliers to sign up to certain standards, levels of vetting for staff, guarantees about how they run their operations, and whether they have the right physical security, even down to password protection.

"If I get it wrong I go to jail, so it is a strong incentive to make sure I know for sure, rather than just assuming they have it right," Campbell says.

However, the need for a strong working relationship may close off one popular route for those looking to cut their costs to the bone - offshoring.

Moving to a low-wage economy such as India may make financial sense, but companies need to factor in the different working culture, and also realize other new risks.

"If you move to another country because costs are lower there, the value of your information will be lower because people earn less," says Bill Rann, global head of BT's governance practice.

In other words, it will cost less to bribe staff at an Indian call centre or business process outsourcing operation than it would in more prosperous countries.

"You open up a new set of opportunities for the criminal fraternity. You have devalued the information in the context of the local economic situation. A few hundred dollars will buy a lot of information in India, while it would cost more in the UK or US," says Rann.

Some companies try to mitigate the risk - and comply with the Data Protection Act - by adopting a thin-client approach, keeping files stored back in Europe. But as Alldrick says, if the terminals in India are connected to a local printer, there is still potential for data loss.

Although customer details being stolen from an Indian call centre may grab the headlines, there is another more basic risk inherent in outsourcing, and that is the loss of competitive edge.

Rann cites the example of investment broker Charles Schwab, which started out offering cheap services to traditional brokers, and eventually entered their market as a direct competitor. Many outsourcing suppliers, especially those in emerging economies, have ambitions to move up the value chain as they learn more about how developed companies operate.

For organizations that outsource parts of their business, there is a risk of losing their core skills as they become more reliant on the outsourcing supplier.

Rann says it can easily happen. "Companies need to know where their sources of competitive advantage lie, and should deepen their skills in those areas. Third-parties can then build up their own core competencies. If you get it wrong, then you can be caught by surprise by someone who builds a good relationship with your customers, delivers strong value, and moves into your space from a different direction," he says.

Campbell says, "It is worth bearing in mind that many companies use outsourcing as a way of learning in order to compete at a later stage. You could be arming another company or country to compete with you."

His advice is to identify and retain your own special core skills and keep control of technical roadmaps and design. In that way, you can keep control and retain influence over what you want to achieve.

Russian IT Market to Grow, Officials Say.

Russia's IT market is projected to triple to $39bn by 2010.

Russia's IT market is projected to triple to $39bn by 2010, Deputy IT and Communications Minister Dmitry Milovantsev told the first Russian forum for innovators, noting that the country's IT market presently amounted to $13.3bn. Milovantsev also pointed out recent successful IPOs by Russian IT companies. Advanced technology companies have become the key drivers of the development of the Russian market, the official said.

Meanwhile, investment in the country's information and communication technology (ICT) is estimated at $250m in 2007.

Know who you are dealing with when outsourcing

What makes some outsourcing arrangements successful, while others fail at the first hurdle? To identify the reasons behind outsourcing success and, conversely, failure, sourcing consultancy Quantum Plus and law firm Bird & Bird surveyed people involved in managing outsourcing relationships.

The research highlighted the importance of knowing who you will be working with throughout the course of an outsourcing arrangement.

During the sales process that leads to an outsourcing relationship, there is a display ritual between buyer and seller. This involves smart people on the supplier side painting a bright picture of what the future will be like once the contract is in place and they take on responsibility for delivering the services.

This selling ritual is led by someone who was specifically selected for the task on the basis of his or her ability to form relationships, to empathize and to enthuse the customer about the prospect of working with their company, as well as their technical, operational and commercial know-how.

A savvy IT director will not rely on their relationship with this person they will insist on meeting the team that will take ultimate responsibility for managing the operation so that they can assess real ability, experience and cultural fit.

Because the supplier is looking to impress, it will field the best team it can to win the business. However, once the contract is in the bag there is a risk that this "A-team" will be replaced over time by "B-team" players and, as a result, the service will never achieve the results that were promised in the contract negotiations.

This scenario will be instantly recognizable to many who have dealt with an outsourcing relationship from contract signature to implementation.

Firms surveyed by Quantum Plus and Bird & Bird said that along with the risk of the quality of the delivery team deteriorating during the implementation period, there is another risk associated with changes in personnel during the life-cycle of the outsourcing arrangement.

A stable set of people managing the arrangement on both sides is a key element to success. Building common understanding and personal connections is crucial to founding a relationship capable of surviving the problems that will arise during an outsourcing contract.

Churn in the people will run the risk of weakening the relationship to the point where day-to-day stresses become too difficult to deal with.

This is particularly true where the changes are at a senior level on the customer side. Survey respondents cited examples of new management who did not understand the original rationale behind the outsourcing arrangement, and who sought to introduce changes that destroyed value instead of adding it.

Whereas a change of contract manager will include a structured handover between the outgoing and the incoming personnel, as it encompasses the whole of their role, senior sponsors may not see so much need for this crucial handover process in what may be seen by them as a relatively insignificant element of their overall responsibility.

There is, however, one circumstance in which significant churn in personnel is desirable.

A number of participants in the survey commented that where there is a substantial transfer of staff from the customer to the service provider, under the Transfer of Undertakings (Protection of Employment) regulations, particular care needs to be taken to ensure that there is a sufficient infusion of "new blood" from the provider, to bring fresh ideas and approaches to the delivery of the outsourced service.

This need for innovation and a new approach must be balanced, however, with a need to maintain continuity in business and process knowledge, particularly through transition.

If staff transfer is badly handled, or if the customer does not insist on certain key individuals being maintained on the account, this knowledge is at risk of being lost through attrition or dispersal.

œ Eleanor Winn is an associate at Quantum Plus, and Roger Bickerstaff is joint head of Bird & Bird's IT sector group

CIOs Uncensored: Outsourcing's Pain Points

The very reasons that companies choose to outsource software development make it one of the most difficult things to outsource successfully.

Before I begin a discussion of the common challenges and pain points that IT leaders face when outsourcing a development project, I would like to posit that the deck is stacked against us from the outset. The reasons that we choose to outsource software development--it takes a lot of skilled resources, it's hard to manage, and therefore projects often run over budget and time allocations, and they often fail to meet quality and functional needs--make it one of the most difficult things to outsource successfully.

Assuming we can manage the budgets and schedules, the two most common complaints I've heard from companies that have chosen to outsource a development project are: I didn't get the functionality that I wanted; and I didn't get the quality that I needed. Consequently, these also are the top issues that business users have cited time and time again when evaluating development projects as unsatisfactory or failed.

It's extremely difficult to clarify, develop, and test requirements. It demands a great deal of communication, discipline, visibility, and control. Unfortunately, the risk for these issues increases significantly when a project is outsourced. The gaps between business stakeholders and developers grow larger, the orchestration involves more moving parts, and the need for structure is exacerbated.

In my 30 years as a CIO at four companies, and through my subsequent consulting experience, I've seen many outsourced application development projects underdeliver in terms of cost and schedule, as well as in terms of functionality and quality. In all of those cases, one or a combination of factors tipped the scales.

Outsourcing the development of a core business application can often lead to trouble. Luckily, as we've gained experience in the realm of outsourcing, this is a pitfall I see less frequently. Most companies understand the risks involved in outsourcing mission-critical projects, and today it's much more common for IT organizations to select lower-priority "grunt" projects for outsourcing.

That said, I've overseen large, highly strategic projects that involved outsourced teams contributing in various areas. For example, in one major project requiring a new integrated financial and HR/payroll system to support a $7 billion entity, the following key activities, in whole or in part, were outsourced to different vendors possessing the needed skill sets: requirements definition, code development/testing, technical architecture, infrastructure design, and implementation. We relied on our established application life-cycle management methodology and used our in-house project management personnel to oversee all the pieces. The result: successful project implementation. The reason: We insisted that we wouldn't abdicate our management responsibility.

Another common trouble spot can occur when a company adopts a "turnkey" outsourcing model. While most of the leading outsourcing vendors offer the ability to completely manage a development project, be wary of a wholesale approach. The idea of scoping a project, handing it off to a qualified vendor, and allowing the vendor to manage the process of delivering the application or service has great allure. But this is a recipe for disaster because you're putting your trust in the outsourcer to get it right. And you won't know if they did until the very end, when it will be too late to take corrective action. Remember the adage, "trust but verify." It's absolutely critical in development initiatives.

In every successful outsourcing engagement I've managed, I've assigned an in-house project leader--typically the best I've got--who's tasked with overseeing the outsourced project and team in an extremely hands-on fashion. It's your in-house person's charter to establish a methodology, be diligent about developing and enforcing communication and collaboration processes, serve as a liaison with the outsourcing company and project team, and enforce checks throughout the project. This isn't something you can trust to a consultant or assume is being carried out by the outsourcing vendor as part of the project.

Even with a dedicated in-house project lead, it's easy to succumb to the challenges of managing a distributed team if you haven't established a development process and supported it with the infrastructure and tools to automate and institutionalize it. Another company I worked for, which at the time was the largest food distributor to independent groceries, embarked on an outsourced development project to build a distributed inventory/purchasing system for several of its distribution centers without establishing any processes for management. When I arrived, the project already was $3 million over budget, with no end in sight. The project wound up costing the company more than twice the budgeted funds.

To keep control of your destiny, manage the outsourced project in the same manner as you do your in-house projects--but on steroids. The amount of structure and process definition you need to succeed may seem daunting. That said, establishing this control and visibility is something that will help you achieve more efficiency and predictability in all of your development projects.

Development methodologies can provide a road map for collaboration with and within the outsourced team. Document your processes, then support them with an infrastructure for communication and collaboration. Finally, establish methods for ensuring clarity around key development processes such as requirements management, scheduling, resource allocation, and testing.

And don't forget about integration. When you outsource, you must understand what types of methods and tools the outsourcer is using. Why? Because what it uses will have to be integrated into your environment. If its practices and tools are different from what you have, you can run into big trouble. Integration is important during the entire development process, for communications, end-user and in-house IT training, and project management/reporting. And, of course, it's absolutely critical when the project is complete and it's time to run it in your shop. This is definitely not the point at which you want to have technical compatibility and integration issues.

It's something I see again and again: IT managers underestimate the time and resources they'll need to dedicate to managing an outsourced project. If you don't have a process and management framework, costs can rapidly spiral, and in the end you'll be left wondering what happened to the savings. Further, even when a project is well-managed, the underestimation effect still comes into play. The distance and highly distributed nature of outsourced development projects inevitably lead to increased overhead in the form of meetings, extensive documentation, additional communication time, travel, and management layers. Be sure to factor these hidden costs into any decision you make to outsource a project.

Is outsourcing good? Is it bad? Obviously, the answer is yes. If you outsource for the right reasons and put in place an effective management process, your outsourcing efforts can be highly successful. But it's not an escape from responsibility--if you aren't disciplined about process and management, you can expect disappointment in the form of cost overruns, missed schedules, inadequate functionality, and poor quality.

Bob Doyle is an independent consultant and former partner at Tatum CIO Partners. He also served as CIO at Fleming, Alliant Foodservice (formerly Kraft Foodservice), and Community Mutual Insurance.

Russian Programmer Twice the Best Worldwide

The Moscow student Peter Mitirichev leaded the Algorithm Section at the world championship TopCoder-2007. He repeated his last year's success.

Another Russian student Nikolai Archak from New York won in the section Applied Software Development. The guys were awarded $25 thousand each. Having won Peter Mitrichev is now the first in the TopCoder world rating.

Peter Mitrichev, a student of the Faculty of Mechanics and Mathematics, Lomonosov Moscow State University, has won the Championship TopCoder Collegiate Challenge (TCCC) for the second time. This year the Championship was held in the US Orlando. 120 students out of 26 countries participated in TCCC-2007 Finals. The given championship is considered a highly prestigious individual competition of student programmers. Peter leads in the most popular section Algorithm. Such skills as solving complicated problems and writing a code resistant to cracking were estimated in the given section. The winner was awarded $25 thousand.

Last year Peter Mitrichev made a unique achievement having won not only TopCoder Collegiate Challenge, but TopCoder Open and Google Code Jam, thus he became the first participant, who managed to win the three largest world individual championships on spots programming at once. At TopCoder Open-2007 held in June Peter was not able to get into the semi-final, but he confirmed his skills at TopCoder Collegiate Challenge, as he was the only one of eight finalists, who solved all the proposed problems. He has been participating in programming competitions since the sixth form and has won the international programming competitions for pupils three times. Having entered Lomonosov Moscow State University Peter continued participating in competitions and became the world vice champion in programming twice (in 2003 and 2005) in championships for students being a member of two various MSU teams.

It should be noted, the Russian representatives have generally performed rather well at TCCC-2007: 2 of 6 semi-finalists, who entered the final, and 2 of 12 participants of the transitional competition represented Russia. Two participants from Russia and Poland, one from Holland, China, Romania and Japan participated in the final. Vitaly Valtman, a student of the Faculty of Mechanics and Mathematics at St. Petersburg State University, being the fourth (he was awarded $2500) has got into the final of the largest programming championship for the second time. Vitaly was also the fourth at TopCoder Open-2007 held in June, his results were the best among the Russian participants. While the second and third places in TCCC Algorithm section were taken by Dutch and Polish students, relatively.

Nikolay Archak has won the competition in Applied Software Development for the second time like Peter Mitrichev. He studies in New York University. The Chinese student won the section Software Component Development and was awarded $15 thousand. The students from Indonesia and US headed the other TopCoder 2007 sections - Studio Design è Marathon Match.

It should be noted the Russian students were also the best at the worldwide team championship on programming, held in Tokyo. The Russians won one gold, two silver and one bronze medals. When meeting with students the first VP Dmitry Medvedev and RF Minister of Communications Leonid Reiman promised to facilitate to organizing programming competitions in Russia.

Security zone: outsourcing improves security jobs

Companies of all sizes are outsourcing some part of their IT and concentrating on their core business activities and strategic IT plans. Even where IT operations are retained in-house, some activities will still be performed by external providers.

But while an IT outsourcing deal can put tremendous stress and time pressure on the IT and IT security team, it is also an opportunity to take stock of a business' security strategy, processes and posture.

Having a working framework is an essential requirement for an outsourcing relationship. What used to be internal and sometimes informal processes are now running through a commercial interface. As a result, processes become more controlled, roles and responsibilities better defined and new audit trails developed.

Retaining in-house a solid base of multiple skill sets that can manage the supplier, the business' interests, as well as legal and regulatory compliance, is good practice, and something many organizations are starting to adopt.

The newly defined teams on both sides of the fence will take some time to adapt to their new roles once details of the outsourcing contract have been agreed. Both retained and outsourced teams will have to put focus on developing and training their staff and managing their new responsibilities. This will include guiding them through the psychological change process and allowing them to become a member of the new organization.

The role of those being outsourced changes from an overhead; to providing value add to the core business of their new employer. Of course, they will still have to face the challenge of moving into a new HR management system that may be wholly incompatible with how their skills were managed previously.

In this instance, it is helpful if they have already acquired recognized standard qualifications, such as the IT Infrastructure Library, project management or security certifications, such as Certified Information Systems Security Professional (CISSP) or Systems Security Certified Practitioner (SSCP).

Recognized qualifications will help staff sharpen their profile and give them an opportunity to take aim at a more clearly defined career path. It can also provide an opportunity to add skills using the knowledge and training base that is more likely to exist within the service provider's organization. Responsible employers will include this type of development opportunity into their selection process, as it is a key requirement for staff retention.

It is also likely that there will be more stringent personal development for those IT staff with security skills, as well as the IT security architect or the security manager who is looking for a new career path.

This is great news for security best practice, since better trained and developed IT staff is one of the easiest ways to reduce security vulnerabilities. So, far from being a core objective of outsourcing, this can be an unexpected and potentially unexploited benefit.

The retained team will undergo a similar, although less visible change. They will have found a new home within their old enterprise, and being seen as visibly removed from IT operations may open up new perspectives in the area of service and risk management.

Outsourcing is sometimes seen as a threat by those affected, however, its positive potential for career development should be noted by staff, IT and HR managers alike. It is part of the overall trend towards more clearly defined roles, which in turn contributes to the momentum of growing the IT security and risk professions.

UK leads outsourcing IT trend

The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.

The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.Appetite for outsourcing shows no sign of abating just yet as the number of deals signed with companies providing such services in Europe, the Middle East and Africa EMEA demonstrated stellar growth at the beginning of this year, according to a new report from Forrester Research.The UK led the charge by closing more than a third 36 per cent of the 84 deals signed during the period of growth, with the total number of deals closed equating to more than 5.4 billion , a rise of 1 billion compared to the same period in 2006.

The UKs deal prosperity showed a seven per cent gain on the number of contracts it closed during the period studied by Forrester Q2 2007 and, although they also showed solid performance during the quarter, left German and Dutch outsourcing providers nestling in joint second place in the deals signed league.

In terms of deal specifics, Q2 2007 included 11 per cent more contracts including more than one service referred to as service bundles than a year previously.

Almost half 45 per cent of all deals included infrastructure services, with Forrester referencing IBM Global Services 371 million , 10 year renewal deal with insurance giant Royal and Sun Alliance.

Deals with helpdesk and support services and desktop services included also proved popular during the period with 44 per cent and 31 per cent of partnerships formed including such services.

With 84 deals closed and more than 5.8 billion spent, Q2 2007 blew away the results of Q2 2006, said the reports author Andrew Parker in an executive summary.

IBM Global Services showed the best performance in terms of number of deals and aggregate deal value, leaving its competition far behind. The runner up here was Capita, which closed one megadeal. Smaller deal sizes gained in popularity again this quarter, and buyers maintained their love of five year contracts.

Forresters study specifically focused on so called mega deals worth more than 10 million from a pool of 25 IT service providers active during the second quarter. As part of its research it interviewed key players including BT Global Services, Capgemini, EDS, Fujitsu Services, HP, IBM Global Services, Infosys, LogicaCMG and Unisys among others.

Navigating a Multigenerational IT Work Force

Managers must tackle the cultural divide between Boomers, Gen Xers and Generation Y workers or risk alienating all.

Source: Eweek
By Deborah Perelman
October 18, 2007

Managers must tackle the cultural divide between Boomers, Gen Xers and Generation Y workers or risk alienating all.

The generation gap has always made its presence felt at the office. The old guard inching toward retirement mixes with the "new kids" fresh out of college and several subsets in between, each walking in with their own sets of beliefs, priorities and approaches to work.

But a confluence of factors, most notably an aging work force and the arrival on the scene of Generation Y, have made that gap seem wider and deeper today than ever before and it is in the IT departments of the enterprise—which are left dealing with the user habits and adoption rates of the rest of the payroll—where the generation gap is often most pronounced.

"IT is an industry that has just reached a point where it is old enough to have intergenerational conflicts. The industry itself it just 40 years old," Phil Murphy, a Forrester principal analyst, told eWEEK.

Making the mix work means changing a workplace's culture: a prolonged process, but a necessary one. Shifts are needed in perceptions of both older and younger workers are perceived (such as that Baby Boomers don't want to learn new technologies) and it is essential to keep in mind that there is more to an IT population than those nearest to retirement and those newest to the organization, even if they are the most noticeable groups.

The gap is widening, with more workers stacked at both ends of the age spectrum. There are approximately 80 million Baby Boomers, those born roughly between the years of 1946 and 1964, and 70 million in Generation Y, born 1978 through the present, but only 60 million in the middle in Generation X, those born 1965 to 1977.

That creates a cultural divide, as workers of different ages will generally hold different views of technology use and adoption.

While Baby Boomers are known to have a preference for face-to-face communication, Generation X workers are more adept with Web- and e-mail-based communication, and Generation Y workers prefer the sharp, no-frills IM approach to communicating, barely using the phone or e-mail except when required.

The oldest generation also has a preference for on-site work while the middle generation values independence more, as well as work/life balance; the youngest group strongly values work/life balance, and often prefers to work remotely and on teams.

Baby Boomers are also best-known for staying with a single employer for a long period of time and working their way to the top, while those in Generation X are more willing to challenge authority and leave a job that does not satisfy them. Members of Generation Y have almost no expectation of having the same career for life, and are most likely to expect their employers to change to accommodate them and not vice versa.

"Younger people get frustrated by the way things are done, yet their managers are most often in that older category," said Lily Mok, research director in Gartner's Executive Programs research organization. "How you make your needs known and work with these more experienced employees is a big concern."

"Not all Baby Boomers are hardworking go-getters and not all the young folks are lazy or ambitious. I just don't buy it. I have seen multiple examples to the contrary," Murphy said. "But, like all stereotypes, there's a grain of truth as well. The folks that are Boomers now grew up before DVDs and MP3s and CDs. So despite that caveat, there are undeniable differences in their experiences with technology."

Managing the generation gap requires education and diversity programs to change workplace culture as we know it. It also takes a change in approach, Mok told eWEEK.

"Employers should change their mindset from expecting an employee to adjust to their workplace design, rather than adapting to their expectations," Mok said. "They should be considering how they can match each other's needs."

Employers look to employees for guidance, as much to keep older workers from retiring as to lure younger recruits, two groups that both desire greater autonomy than they have in the past.

How to ensure outsourcing success

What makes some outsourcing arrangements successful, while others fail at the first hurdle? In order to identify the reasons behind outsourcing success and, conversely, failure, sourcing consultancy Quantum Plus and law firm Bird & Bird surveyed people involved in managing outsourcing relationships.

It will be no surprise to anyone who has been involved in creating or managing an outsourcing relationship that the user and the service provider do not always have a shared understanding of what the contract promises in terms of costs, service quality, innovation or other benefits.

The outsourcing survey identifies that a mismatch in expectations between the user and the service provider is one of the most common causes of dissatisfaction in outsourcing relationships.

To a certain extent, it is inevitable that there will be a mismatch of expectations between outsourcing service providers and their users. Outsourcing users typically want to receive a service that is as responsive as the in-house alternative would be, but also want to reap the economic and service benefits of obtaining the services from an external provider.

The service provider, meanwhile, needs stability and certainty in order to be able to plan and manage effectively, and needs to make a profit.

The survey identified a number of users who felt that they had contracted for a high-quality, specialised service, but the service provider had offered a relatively standard offering.

This problem tends to be intensified when there is no accurate measurement of relevant service levels before outsourcing, making it difficult for the user to know what level of service to expect, and difficult for the service provider to know what is expected of them.

With longer-term arrangements, it is often difficult to predict at the time of the procurement what the user's long-term service requirements will be. Frequently, this means that only a sketchy understanding is included in the contract, which then causes frustrations downstream when the user's and supplier's expectations do not coincide.

Competitive procurement processes do not appear to be particularly effective at achieving a common level of understanding between the user and potential service providers. These processes can create additional problems by forcing service providers to oversell and underbid.

Some competitive processes seek to reduce proposals to a mandated common level so as to ease the selection of a provider, but this serves both to inhibit innovation by the providers and to deny the user visibility into what might be a more attractive proposal from a particular supplier.

The survey shows that outsourcing arrangements developed with divisional objectives in mind, or not covering all user locations, tend to experience additional pressures from corporate management, as corporate requirements are not aligned with the objectives of the local outsourcing arrangement. Internal expectations, therefore, also need to be managed, adding another layer of complexity to an already complex situation.

Outsourcing relationships that work well tend to have a small joint project team that works together to unite the inevitably diverse expectations of user and service provider.

These joint project teams bridge the tensions that occur between the service provider's and the user's organisations, often by working in relatively informal modes.

Relationships that cannot cope with mismatches of expectations tend to have low levels of formal and informal communication between the two organisations.

Although it is possible to create the mechanisms that enable mismatches of expectations between service provider and user to be avoided, much depends on the intrinsically unpredictable chemistry of the individuals involved.

If trust cannot be achieved at an individual level, then experience shows it will be difficult for the organisations involved in an outsourcing relationship to operate together at a business level.

Trust is usually only achieved if there is a good alignment between each organisation's perspective. If the pressures that face each organisation and the individuals working within them are understood, then mismatches of expectation can often be recognised and overcome.

Text Messaging Booms at U.S. Colleges

News Analysis: The rush to more efficiently send out emergency text messages to students at universities has been intensified by the Virginia Tech shootings.

Colleges and universities across the United States are moving quickly to adopt text messaging as their first line of emergency notification, experts said.

However, this incident is not the only recent incentive for schools to look for ways to reach their students in an emergency. Other reasons include weather emergencies, especially in the South where hurricane evacuations are almost an annual event.

And, of course, there's the fact that the U.S. Department of Education requires colleges and universities to have the means to reach their students in a timely manner in times of crisis. The question for university administrators has always been what is the best way to notify students, and in many cases, that boils down to e-mail, since virtually every student has a school e-mail account. The problem is, as Virginia Tech found to its sorrow, that e-mail is rarely an adequate solution.

"Mainly, what we think is that colleges should be using text messaging systems," said Katherine Andriole, program director for Security on Campus, a nonprofit organization that works with the Department of Justice to help fight crime on campus.

Andriole said that using SMS-based text messaging makes sense, if only because college students are almost never without their cell phones. The advantage, Andriole said, is that, "Messages go out simultaneously. What we saw at Virginia Tech is that the communications system was pretty inefficient. They relied on e-mail and word of mouth. A lot of students said they didn't check their e-mail."

Andriole said that it's not uncommon for e-mail alerts on college campuses to remain unread for hours or days, rendering even timely alerts useless. Fortunately, there are a number of companies that provide such alerting systems, some that are limited to SMS alerts, and some that handle a wide variety of messaging options.

RUSSOFT Announces Plans for Annual Software Outsourcing Forum, June 20-22, 2007. Russia's central software industry event for global IT professionals to take place in St. Petersburg.

The conference, formerly known as the Russian Software and Outsourcing Summit (ROSS), is the largest regional conference of its kind.

Given the explosive growth of the global IT outsourcing industry, RUSSOFT Forum 2007 aims to provide buyers of technology services from around the world with a better understanding of their sourcing options in Russia and Eastern Europe and ensure a higher return on their outsourcing investment through fostering lasting high value partnerships with leading service providers in that region. The event will also serve as a platform for Russian software service providers and ISVs to showcase their services, products and solutions to an audience of industry analysts, potential clients and investors.

"With the increasing attention turned to Russia, given the region's proven track record for high quality software outsourcing, RUSSOFT Forum 2007 is the must-attend event for buyers looking to meet all the leading industry players from the diverse and vibrant Russian vendor community in one place," said Valentin Makarov, President, RUSSOFT. "If you are already considering outsourcing to Russia, this forum is your unique opportunity to interview vendors, conduct site visits, learn first-hand about trends from industry thought leaders, and greatly advance your selection process."

According to Makarov, the Forum is explicitly set up to help companies that are driven to diversify their sourcing portfolios to spread risks and look beyond Bangalore for specific value offerings that their businesses need to stay competitive and succeed. "Everyone from corporate management and sourcing and purchasing executives to IT program managers and human resources professionals are encouraged to come to this event", said Makarov. "Besides, you will get a chance to enjoy St. Petersburg, one of the world's most beautiful cities, during the magnificent White Nights season."

"As this year’s platinum sponsor, we are committed to making the RUSSOFT Forum 2007 the most successful Russian outsourcing event in the Forum’s seven year history. We have focused our efforts on putting together a first-class event program that includes some of the most prominent figures from Russia’s outsourcing community. We are honored and excited to be involved so closely with RUSSOFT 2007," says Nick Puntikov, President Eastern Europe, Exigen Services.

The main RUSSOFT Forum program will feature presentations by prominent industry analysts and thought leaders who will discuss the Russian outsourcing industry's key value proposition and advantages by citing real-world case studies and experience reports from existing clients of leading Russian outsourcers. In addition to the main presentations and break-out sessions, buyers, suppliers, ISVs, and venture capitalists will have the opportunity to schedule private business-to-business meetings with potential partners during the event via a pre-qualified meeting program. A closing gala dinner will be held in a spectacular palace on the bank of the Neva River.

West prefers Russian programmers to Indian ones

The advantage of Russian outsourcing IT-companies for the West is not just the cheap software development but also the high-level specialists and the cultural affinity to the West which the Indian specialists lack. This is the conclusion IDC specialists came to in their research based on the opinion of foreign clients.

Analysts questioned top-managers of 20 large and medium US and West European corporations cooperating with Russian software developers. Among them there were 13 companies from the IT sector. Most of them used offshore development services, many of them are Russian developers’ long-term clients. The first reason to address offshore developers is the low price. However the companies realize the price can’t be the only criteria for cooperation and should be balanced with other factors as well. Thus, cooperation stability and low employee turnover is important.

“Western companies now see us in a better way and more and more often choose our specialists for difficult solutions. But the main factor for it is not just the reliance on the state support of the IT-sector on behalf of Russia, but the low employee turnover and cultural affinity”, said Svetlana Vronskaya, Reksoft Corporate Communications Head.

Foreign clients point out the high professional and education level of Russian companies’ personnel. They help implement complex projects which is a big advantage of the Russian IT-industry. Another advantage mentioned by the respondents is the close culture and work ethics (6 out of 20 companies mentioned it), clear understanding of business objectives. This distinguishes Russian companies from other offshore programming countries. The specialists’ English is improving although it is not as good as that of Indian specialists. However, they said the poor level of English is not as important as the cultural gap.

IDC analysts noted none of the respondents mentioned the infrastructure or intellectual property violation as the Russian companies’ weak point. “Two years ago analytics contained materials where it was written the country has a poor telecom-infrastructure and IP protection”, said Svetlana Vronskaya. Another advantage of Russia for foreign clients is the time difference between the countries. Most of them said however, the developers adjust their work schedule to the client. It is also important to mention the time difference is advantageous only for companies situated in the Western part of Russia.

IDC analysts say Russian companies are flexible on the market and dynamically deliver new products on the market, thus boosting the client’s income. Mikhail Zavileisky, Data Art Director General shares the opinion. “Our developers discuss the work with the client, offering new solutions and best ways to reach the objective”, he said. “This is in what way our companies differ from Indian teams who usually perform their work rather meagerly and algorithmically fearing of spoiling the relations with their clients and losing the contract. Our teams are more creative, and the results are better”. Besides, Mr. Zavileisky pointed out the ways for the Russian IT-industry to develop successfully. It is useless to compete in market volumes, since Russia is far behind India and China in population terms. So, the country should try to boost the income from clients, he believes.

This could be done by way of producing complex and expensive products. The revenues from these sales should be directed at training new specialists. “We shouldn’t follow our Indian colleagues’ experience were business participation in education facilities is sometimes absurd. Some higher education facilities teach students purely what would be required in their future job. On the one hand it is good. The specialists demonstrate good results at the beginning. On the other hand the growth potential is low”, said Mr. Zavileisky. He said 80% of Russian companies have fundamental knowledge of the subject and this helps them grow in different directions required on the Russian market.

Indian IT-industry has become the victim of its success, the research said. The fact that the country is considered to be a popular IT-solutions development center encouraged high labor cost and employee turnover. So, stable teams become the advantage of other countries participating in world outsourcing. As it has been mentioned above, foreign clients believe there is low employee turnover in Russia.

Experts say the situation will not last long. According to Gennady Smorodin, Scandinavian groups’ coordinator (non-formal union of IT-developers) employee turnover has started, which is caused by foreign companies opening their development centers in Russia. “Russian companies working on the domestic market are not competitive salary wise. Those who are able to compete with foreign companies have to increase salaries or come to terms with employee turnover”, said Mr. Smorodin.

IDC analysts believe Russia needs to develop own brand as an offshore programming country. The research says the lack of technical skills and knowledge might prevent from the implementation of a number of projects. That is why the Russian IT-industry should demonstrate it could offer knowledge which American and western Specialists lack. Russia cannot openly compete with India. This country can develop complex software and should promote itself by way of it. To create own brand we should demonstrate high education level”, said Gennady Smorodin.

Valentin Makarov Russof President said Russia is gaining the leading positions in software development on demand. Russian companies are successfully developing in the area of software product and technologies creation. Investment attractiveness is growing and we come to understand better the rules of the world market. State support is also growing. All this guarantees fast industry growth, he believes.

Should you outsource?

Recent trends in software development market show that it is no longer the most efficient way to work onshore.

Recent trends in software development market show that it is no longer the most efficient way to work onshore. Competition is too high and in some particular cases, US or European IT people even go farming rather than admit the situation and adapt themselves. This article is mainly for those who are going to stay straight in the industry whatever surprises it keeps bringing.

International division of labour has done its work. So nowadays, if you ask anybody about the regions he associates with IT-industry, you’ll get quite a short list: India, China, Russia, Eastern Europe. No wonder, historically these regions had the most efficient technically oriented education. In addition to lower cost of labour in the East, that is their main selling point, which determines their competitive strength.

As a logical sequence, almost each leading company engaged in IT sphere, whether publicly or secretly, outsources a part of its current work to third parties, often offshore. No wonder that Indian and other offshore software development companies prosper.

Although that sounds good and promises several times bigger profits, incautious outsourcing can be a trap for any company. Don’t forget that you entrust your reputation to a company that is thousands miles away. Hence, if you have made a decision to outsource a part or the whole project to some company, you should take into consideration five simple tips.

Make Proper Research
The simplest way to find offshore software development companies is to try search engine or relative online directories. However, there is no guarantee that under inspirational promises any website has, you won’t find cheaters. Spend several hours and try to find the most info about the companies you have selected. Search engines should be your best friend in these efforts.

Consult Alliances and Associations
Almost each country where IT industry is well developed has national alliances of software development companies. These pools of developers can become your first step in search for an outsourcing company.

Communicate Carefully
When you have decided to contact several, as you think, most reliable companies, you shouldn’t provide them with complete info regarding your project at once. Keep a little intrigue and give the info partially. That will make you aware about professionalism of companies’ project managers as well as about their communication policy. Communication is what you will appreciate during the whole project’s development. Therefore, it is better to find out whether they are communicative enough before you sign the contract.

Ask for References/Samples
Although offshore developers cannot disclosure their recent contracts, anyway, they have several clients that can provide you with references whether they are bad or good. If there are no references at all, ask for some software the company has developed. See and try each example of their work you can. That will make you aware about the quality of their services.

Phone or Visit Them
The best way to test the company, which you would like to outsource to, is contact them directly. Emails are good, but you can find out more info about the possible partners if you phone them. At least you will know about their command of English (don’t forget, you are going to outsource abroad) and their real interest. Additionally, you can make them relax a little, so they will be less defended against your research of true situation. If you visit them personally you’ll see exactly who and where will work for you. At least, if the company doesn’t mind you visit them, that can mean that they are open enough for collaboration and they have provided you with more or less true info.

If you can do at least three of these five steps, there will be little chances for you to be cheated by an unreliable company thousands miles away. You’ll be able to experience that kind of wise outsourcing that can give you required competitive ability. Each time you are going to give some project for offshore development, take into account that you should be an initiator and wise decisions maker. Research, consult, and communicate. That’s the motto of any company that is successful in outsourcing. It’s not too complicated, is it?

Private Equity Looks at Booming Russia IT Market

Russia's booming information technology (IT) market is a key target for private equity firms across the globe, according to a private equity lawyer with global law firm Squire, Sanders & Dempsey L.L.P.

The firm represented Scandinavian private equity fund Mint Capital in its investment into the Verysell Group, one of Russia's leading IT companies. The Verysell deal closed March 29.

Christopher A. Rose, a Squire Sanders private equity lawyer based in London and Moscow, said the Mint Capital deal is an example of growing global interest in Russian IT as that country looks to high-technology to diversify its economy. Rose, who is co-author of the Russian Federation chapter of the PLC Cross-border Private Equity Handbook 2006-2007, was part of the Squire Sanders transaction team. Other Squire Sanders attorneys participating were corporate lawyers David Wack and Anna Manyatkina in the firm's Moscow office and corporate lawyer Andrew Sandor in the firm's Bratislava office.

"Russia is reported to have the fastest growing IT market in the world, with projections that its US$14 million IT market will grow by 20 percent annually," Rose said. "The Russian government has particular interest in IT as it seeks to diversify the economy. These factors make IT a key investment for private equity, and we are pleased to assist our client in this important transaction."

Mint Capital is a minority investor in Verysell, which will use the capital for ongoing business development. The investment amount was not disclosed.

Total IT Outsourcing Proving Popular

A leading IT expert has said that total IT outsourcing (TITO) is becoming a very popular solution with many companies.

The chairman and managing director of Indian firm Eastern Software Systems (ESS), Anil Bakht, explained to eWorld that increasing numbers of firms are finding that their growing business requirements and stretched staff numbers mean that they are struggling to keep up with their core competences.

This has seen many firms turn to TITO specialists to take care of IT matters and leave staff to concentrate on running the business.

"Worldover, businesses are going leaner in terms of their head count," said Mr Bakht.

"Businesses should concentrate on their core activities rather than grapple with technology. It is best left to people or companies for whom IT is the core activity."

He added that through the use of service level agreements, it is far easier for IT outsourcers to be penalised financially or let go if their work dips below an agreed standard than it is to fire and hire staff or reduce their salaries.

Russia To Become Third Largest Outsourcing Destination by 2010

Research and Markets has announced the addition of Frost & Sullivan’s new report "Social and Infrastructure & Labor Analysis for the Russian Information and Communication Technologies Industry" to their offering.

The global information and communications technology industry has provided the supporting infrastructure for economic growth across the world in the last decade. Despite the setbacks following the failure of dot com enterprises, the ICT industry continues to show enormous growth potential. ICT is a vital component of the infrastructural support needed for the development of any economy. Global trends in telecommunications indicate a shift toward open access, creation of a healthy competitive environment, and a consequent drop in prices. Although companies are likely to continue outsourcing IT services mainly to India, they are also expected to increasingly witness lucrative bids from Russia, the Philippines, Ireland, Israel, and China.

ICT spending is likely to grow impressively, with emerging markets in eastern Europe and Asia Pacific leading the way. Shares of IT and telecommunications sectors are almost equally important in the total ICT spending, with governments and businesses accounting for more than three quarters of the spending. The growing affluence of the population and the globalization of enterprises also improve ICT consumption. It is vital for ICT enterprises to have a high-performance networking infrastructure, as their enterprise applications and operations depend on it.

Russia has been the biggest spender on IT among the central and eastern European (CEE) countries and its spending has been higher than the global average since 2002. This industry’s growth is high and stable, considering it witnessed double-digit growth for the last five years and is poised for further growth until 2010, although consumption trends in telecommunication vary across regions as well as segments.

Russia’s vast human resources and low labor costs hold it in good stead in the ICT industry and have set it on course to becoming the third largest outsourcing destination in the world by 2010. Its competent education system provides its citizens with high levels of skills, excellent training, as well as intensive scientific and engineering expertise. However, the industry is impaired by a shortage of IT specialists but this is set to change, with the present government strongly focusing on the development of the IT industry, since the telecommunications industry is already well covered. Also, a series of high-profile industry reports changed the general perception that the ICT infrastructure in Russia is inadequate by publishing positive articles.

Frost & Sullivan’s Information and Communication Technology Country Industry Forecast service provides vital inputs for evaluating the attractiveness of a country and its ICT industry. Besides enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.

The Next Offshoring Surge 'Basic Necessity'

Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services

Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services from low-wage countries in the next three years, one study predicts. Offshore tech spending will rise from 6% of the $44 billion the industry spends on IT annually to 30% by 2010, finds a study by consulting firm Deloitte.

"Among larger institutions in particular, offshoring ... has become a basic necessity," Deloitte says. Reports of wage inflation eating into cost savings offered by offshore outsourcing are overblown, Deloitte says. Fifty-five percent of the banking IT execs it interviewed expect their offshoring costs to rise by less than 10% this year, and 36% expect costs to remain flat or decline.

Big Surge Expected In Offshore Outsourcing By Banks, Study Says

Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

Banks in the United States and other countries will dramatically increase the percentage of their IT budgets devoted to procuring technology services from offshore providers operating from low-wage countries such as India and China over the next three years, according to a new study from consulting firm Deloitte.

Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

"Among larger institutions in particular, offshoring is not one available cost-cutting strategy, it's become a basic necessity," says the study, which was released Wednesday. Banks are moving well beyond outsourcing low-level application maintenance work and are increasingly relying on offshore service providers for help with more sophisticated technology projects, the study says.

Offshoring tech work offers big savings as programmers in India, for example, are paid anywhere from 40% to 80% less than their U.S. counterparts.

Deloitte says banks can save 40% on most IT projects by moving them to an offshore service provider. The study also claims that media reports of rampant wage inflation eating into the cost savings offered by offshore outsourcing are overblown. Deloitte says 55% of the banking IT executives it interviewed for the study expect their offshoring costs to rise by less than 10% this year, while 36% expect the costs to remain flat or decline.

Despite the advantages offered by outsourcing to low-cost countries, most banks aren't getting full bang for their offshore dollar, Deloitte says. They need to do a better job developing the internal management skills and business processes needed to make offshoring as cost efficient as possible. "If processes are not streamlined, more substantial savings will be lost, and it will be difficult to scale up offshore operations over the long term," says the study.

The increasing tendency by U.S. banks to outsource tech work to offshore service providers is helping to boost revenue at major outsourcing vendors, particularly those based in India. In its most recent financial year, Wipro reported that sales to the banking sector accounted for 21% of its total revenue of $2.39 billion. Rival TCS said sales to the financial services industry accounted for 38% of its $2.97 billion total revenue for 2006.

Down To Business: Outsourcing Customers Send Mixed Signals

Some 89% of the customer organizations surveyed by KPMG say they plan to maintain or increase their current level of outsourcing. So why do many of the other survey findings paint such an unflattering picture of these relationships?

KPMG International last week released the results of a survey it conducted on global outsourcing, prompting various pundits to conclude that the industry and customer relationships are stronger than ever.

Among the high points: 42% of customers surveyed think their outsourcing contracts have "definitely improved" their financial performance; 47% think their service providers brought to their business experience that they previously didn't have; and 62% take exception to the conventional wisdom that "as many as half of sourcing deals fail." Perhaps the most positive finding: 89% of the customer organizations surveyed say they plan to maintain or increase their current level of outsourcing.

On the whole, KPMG's 34-page "Strategic Evolution" report is balanced, especially for a vested global services interest such as itself. KPMG surveyed C-level and other execs at 650 organizations in 32 countries, 80% of them involved in IT outsourcing and most of the rest involved in business process outsourcing.

A critical eye, however, finds a dark side to many of the trends presented in the report and parroted by the punditry as positive. Let's start with KPMG's attempt to debunk the myth that half of outsourcing deals fail. While 62% of customer respondents to the survey consider this statement a "gross or mostly an oversimplification," 25% say it's "not an oversimplification but not entirely appropriate" and 13% say it's "mostly or an entirely appropriate view." It's hardly a ringing endorsement when 38% of outsourcing customers think that, to some degree, up to half of these contracts flop.

Meantime, if 47% of customers think their service providers impart experience that they previously didn't have, then it stands to reason that the other 53% think their outsourcers impart little to no such experience. From my conversations with various IT executives, this is their No. 1 concern with outsourcing: Suppliers, for all their technical smarts, just don't understand the businesses of their customers.

It's the main reason Sprint Nextel's Richard LeFave nixed a long-term outsourcing contract with IBM--pulling back "full application ownership, including full life cycle management, architecture, system analysis, and design"--when he took over as CIO of the merged telecom company last year. And it's why Jamie Dimon did the same thing a little over a year ago when he became CEO of JPMorgan Chase. Dimon has said that the banking giant is as much a technology company as General Motors is a manufacturing company. No outsourcing supplier can know its core business better.

KPMG also found that 42% of the customer organizations it surveyed think their outsourcing contracts have definitely improved their financial performance, but only 27% think they have definitely improved their competitiveness. If outsourcing suppliers aren't doing one or the other for their customers, they're not doing much.

Part of the ambiguity with these responses goes to another survey finding: 72% of customers say they don't have, or don't share with their service providers, criteria for measuring the success or failure of their outsourcing engagements. "Success is ill-defined," KPMG quotes the CEO of one manufacturer. "Measurement of business benefits is difficult, and there is a tendency not to measure."

Clearly, customers are still finding their footing. Last year revealed a trend toward shorter, smaller, and more specialized outsourcing contracts, producing a record number of total deals, according to advisory firm TPI. However, the fourth quarter of 2006 was the worst fourth quarter in five years when it comes to the overall value of brand-new outsourcing deals. For the year, "total contract value" declined 8% compared with 2005, to $78 billion, TPI reports.

As much as $100 billion of outsourcing contracts are due for renewal this year. We'll see how strong these relationships really are.

Outsourcing Not Slowing Down: Study

Eighty-nine percent respondents to a KPMG study say they plan to maintain or increase their present level of sourcing

Outsourcing is still increasing and organizations involved in this practice either want to maintain their sourcing level or want to increase it, says KPMG’s recent study Strategic Evolution, which is based on responses from more than 650 organizations (both customers and services providers) from 32 countries.

“Outsourcing is not slowing down, in fact it’s growing faster, ” says Pradeep Udhas, Global Head, KPMG Advisory Services. “This industry is going to go much beyond where it is today.”

Firms Looking to Eastern Europe for IT Outsourcing

IT and software development outsourcing firms in eastern Europe are finding their services increasingly in demand, according to recent reports.

The relatively low cost of IT outsourcing services in eastern European countries such as Russia and

Poland

, coupled with their close proximity to western Europe, is encouraging many western companies to send large parts of their IT infrastructure and software development programmes east, claims ComputerWeekly.

Cities such as Moscow and Krakow are proving to be hubs of outsourcing activity and it is easy to see why, claims the management consultancy McKinsey.

Average wages are in line with those in

India

, which is another main source of IT outsourcing, while the talent pool in eastern Europe is immense, with a large number of highly skilled graduates looking for technology jobs.

In addition, the increasingly solid infrastructure of former Eastern Bloc countries ensures that firms can be confident that their investment is low-risk.

"You can drink the water and you do not have to take the injections," remarked Daniel Marovitz, chief operating officer of technology at Deutsche Bank, which has outsourced the development of its customer relationship management system to Russia.

"These sound like small things, but when you have to go away and leave your family they become important," he added to ComputerWeekly.

Russia to Become Real Highlight at CeBIT 2007

Russia is to become a partner of the world’s largest IT trade fair in Hanover in March. The participation in CeBIT will help Russia advertise its IT products. The federal budget has already allocated 8.2 million rubles to support Russian exhibitors.

Russia has become an official partner of the major CeBIT 2007 trade fair which will open in Hannover, Germany, in March, Deutsche Messe, the organizers, reported Tuesday. Russia beat France on the way to gain this status. The partnership gives Russia extra PR support such as joint news conferences and publications about the top 100 Russian-German IT projects. Russia will attract even more attention when the Russia-Germany summit is held on the fair’s opening day with German Chancellor Angela Merkel visiting. Russian President Vladimir Putin has not as yet confirmed his participation. First Deputy Prime Minister Dmitry Medvedev may fly to Hanover instead.

Russia will have its record-high number of exhibitors - 150, compared to 82 last year. The Russian presence will cover all four display categories - communications, business processes, banking and finances as well as digital equipment. The Russian federal budget has allocated 8.2 million rubles this year to make rent for Russian participants cheaper.

"Russian companies will have a great opportunity to demonstrate their products and attract new clients," Oleg Byakhov from the IT and Communications Ministry told Kommersant.

Experts agree that the participation in CeBIT will give Russian companies international advertising and boost their sales. "Primarily, it is very good promotion for Russian companies and for Russia because we will be showing that we are not only an oil and gas supplier but also as a good hi-tech partner," Valentin Makarov from KIT says.

Germany and other European counties need Russia’s cooperation in the IT industry, Mr. Makarov maintains. The Russian hi-tech market is growing 25 annually, fastest in the world. The volume market was $14 billion in 2006 with Russia exporting IT products worth $1.8 billion.

Russia Could Pose a Challenge to India in Outsourcing Market

India would continue to lead the IT supplier market in 2007 although the battle for supremacy in the outsourcing space could witness a change with Russia emerging as a strong contender during the year, with an expected growth of 40-45% in 2007.

Currently, Russia is the third largest IT outsourcing supply market, behind India and China. Russian IT companies specialise in high-end software and embedded software product development, which acts as a differentiator from lower-priced Indian offerings.

According to neoIT’s latest report, the global IT services initiatives are expected to accelerate in 2007. "Business transformation through services globalisation is one of the most important levers that global companies can no longer afford to ignore," said neoIT’s CEO Atul Vashistha.

NeoIT said that business transformation would be the key trend to watch out for in 2007. Global companies would leverage it to improve time-to-market, gain new business, standardise processes and significantly lower costs.

On the supplier side, the report noted that competitive forces were leading to increased supplier sophistication. "The year 2007 will see an increased focus among service providers on developing industry-specific domain expertise through acquisitions.

In fact, acquisitions will be a continuing trend in 2007. Eastern companies will acquire western outfits to gain a global footprint and venture into services that demand a significant onshore presence.

Companies based in the West will take a keen interest in setups in the East to stay competitive as well as explore eastern markets, which are not only cost effective delivery locations, but also rapidly emerging markets by themselves," it said.

Record Number of Outsourcing Contracts Signed in 2006, TPI Index Reveals

TPI, the world’s leading advisor to global corporations on all facets of their service-delivery strategies for business support operations, today announced the developments of 2006 in the global outsourcing industry through the TPI Index report.

The contracts awarded in 2006 represented the single-greatest number of such agreements in any year, up 3 percent from 2005’s previous high. After an exceptional first quarter, the year concluded with a total contract value (TCV) of $78 billion, amounting to an 8 percent decline from the prior year. Annualized contract value (ACV) - an estimate of the average yearly revenue potential that may be derived from the 2006 contract awards - reflects roughly a 7 percent year-over-year decline in ACV.

"The 2006 numbers were down due in part to shorter contracts as well as those with smaller dollar values," said Peter Allen, partner and managing director for Market Development at TPI. "However, the market is growing. The ACV signed for 2006 was the second strongest year ever for annual value coming online, and the industry also had a record year in contracts with annual average spend of $100 million. The year-over-year comparisons are down due to an exceptionally strong 2005, rather than a weak 2006."

The number of "mega deals" - those with contract values above $1 billion - was unchanged from 2005 but off $5 billion in TCV from the prior year. Elsewhere, the total number of transactions completed as the result of a restructuring of a prior contract was a record at 72, but the TCV of just over $20 billion was not a record.

Outsourcing continues to grow abroad, with markets in Asia and Europe maturing. Asia-Pacific experienced a five-year high in both volume and value of contracts signed. Europe recorded the greatest number of contracts ever, but not the largest TCV. Most of the new contracts signed in Europe were smaller in contract value than in previous years.

"This past year actually showed the second straight year of double-digit TCV decline in the business process outsourcing (BPO) industry, a 15 percent fall from 2005, and this was a significant reason why 2006 numbers were down from 2005," added Mr. Allen. "This decline was the result of fewer multi-process BPO contracts, or those arrangements in which an organization opts to source out more than one support process at a time. Instead, companies and organizations sought more single-function solutions. In fact, fewer multi-process contracts were signed in 2006 than in each of the previous four years."

While fewer multi-process deals were completed, single-process contracts tended to grow both in volume and value, particularly within Financial Services Operations outsourcing (FSO), which nearly doubled in TCV from 2005. Yet even among single-process deals, not all sectors experienced growth. For example, there was a drop off in new sourcing contracts for Customer Relationship Management (CRM) operations such as customer call centers, as organizations instead sought best-in-class solutions for those processes.

Finally, more service providers are competing for and winning market transactions. Ninety providers won some new business in the year. India-based providers, operating from a smaller base, are consistently gaining relative TCV market share. They are especially strong in Applications Development and Maintenance (ADM) deals, for which their 2006 share almost matched that of the Big Six providers.

The IT Analysts Make Their 2007 Predictions

As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.

Human beings are forward-looking animals, which is probably why we have our eyes in the front of our heads. (Well, actually, we have our eyes in the front of our heads so we can see in 3-D, and the effect is that we are turned into forward-looking creatures.) As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.

The analysts at Forrester Research were the early birds for IT spending forecasts for 2007, putting their forecast in a comparison and contrast between IT spending in the United States, Canada, and Europe in a report that came out in early December.

According to Forrester's analysis, the increase in IT spending in 2006 was somewhat mixed, and the prospects for growth are better in 2007 compared with the United States and Canada. While the countries of Western and Central Europe have more collective gross domestic product than the United States - GDP is a measure of the value of all goods and services sold in an economy - IT spending among companies in Europe will hit $565 billion in 2006, considerably smaller than the $721 billion that companies in the United States will spend this year on IT. If you are rooting for the European market, the 5.1 percent growth in IT spending in Europe almost matched the 5.8 percent growth that Forrester is projecting for 2006 in the United States. Forrester is expecting a slowdown in IT spending in both geographies in 2007, with the European market cooling a little to $586 billion in sales, up 3.7 percent, compared to $742 billion in the United States, up only 2.9 percent.

"While U.S. IT spending has been growing faster than European IT spending in recent years, European IT spending growth is now poised to exceed that in the U.S.," explains Andrew Bartels, a vice president at Forrester who is responsible for Forrester's North American IT spending forecasts. "With European economic growth showing signs of improvement while the U.S. economy is likely to slow down, 2007 will be the year when European IT spending grows more rapidly than that in the U.S. or Canada."

Forrester's analysts say that the bigger European and multinational companies that are headquartered in Europe are just as sophisticated as their American counterparts when it comes to IT spending, but that small and midrange companies as well as state and local governments in Europe tend to lag their counterparts in America when it comes to IT investments.

On a country by country basis, Forrester is predicting that the businesses and governments in the United Kingdom will spend 61 billion euros (about $77 billion) on IT in 2006, followed by Germany with 57 billion euros ($72 billion) in spending. IT spending in France is about two-third of that in the U.K, and Italy is about two-thirds of that in Germany, according to Forrester (which is $51.5 billion and $48 billion, respectively). Spain, the Netherlands, and Switzerland are expected to spend between 15 billion euros and 20 billion euros in 2006, with the remaining countries in Western Europe spending between 5 billion to 10 billion euros each. (That's Belgium, Sweden, Denmark, Austria, Poland, Finland, and Norway in this category, and that is $6.3 billion to $13 billion in U.S. dollars.) All of the other countries in the region are expected to spend less than 5 billion euros. So while Russia, Ukraine, and other Eastern European countries have very high growth in IT spending, the numbers are still pretty small.

If you want a second opinion on IT growth, the prognosis will be much the same over at Gartner, at least among large enterprises in the United States. Gartner released a statement late last week that said the company's analysts have found after checks that big companies are expecting to only increasing their IT spending in 2007 by 2.8 percent. Only six months ago, these same executives were forecasting that their 2007 spending would rise by 6 percent. What gives?

"A number of factors have combined to force enterprises to lower their IT spending forecasts from the first half of 2006," explained Jed Rubin, director of Gartner Consulting. "Looking back at the distribution of spending in 2006, enterprises spent more to support core business operations. This includes spending to support increasingly complex infrastructure and applications requirements, rising energy costs, regulatory requirements and other non-discretionary spending to keep the business running. This increased 'run the business' spending has consumed budget resources that were originally earmarked for more strategic and transformational investment. IT leaders are now planning to optimize their spending in these areas in the year to come."

These same companies expect to lower their basic infrastructure budgets - the ones that simply run the business, not transform it or add new applications - by 5 percent in 2007. The data was based on 807 companies that commit more than $1 billion in IT budgets; specifically, the budgets at those companies added up to $130 billion in spending, which is a big chunk of the IT spending in the United States. (The top 1,000 companies in the States probably account for a quarter of total IT spending, if you can believe it.)

Not to be outdone in the stylish buzzword department, the analysts at IDC put out their prognostication statement for 2007, and were predicting something called "hyperdisruption," which is what happens with my kids at my house on Sunday morning if I am trying to get a moment's peace reading the newspaper.

IDC is, however, predicting that overall worldwide IT spending will grow by 6.6 percent in 2007, which is a lot more than either Forrester or Gartner are saying it will. I like the way that number sounds better, but it is really anybody's guess as to what will really happen. As for the hyperdisruption idea, IDC says that IT vendors are adopting new business models and selling new technologies, and that means we are in for a lot of changes.

"While overall IT market growth will appear almost boringly moderate, its impact will be the opposite," says Frank Gens, senior vice president of research at IDC. "As IT market leaders step up their relentless hunt for growth, we'll see many disruptive shifts, with the importance of small business becoming very big, secondary economies becoming primary, software offerings becoming services, services offerings becoming software, channel-oriented players going more direct, direct players developing radically new channel strategies, and less distinction between business and consumer players and technologies."

IDC is also predicting that more vendors will try to move down into the small and medium business space, and that services and software will start to fuse in the Software as a Service business model, or SaaS. (Next year, we are probably just going to start saying SaaS and stop spelling it out; ditto for SOA, or service oriented architecture.) IDC is also predicting something that VMware has been aching for: the establishment of virtualization hypervisors as a standard way to deploy servers, and a virtual machine as a means of deploying application software that is pre-packaged, pre-installed, and pre-tuned.

ICT Leaders Discuss Opening Finnish Innovation Centre in St Petersburg

A senior delegation of Finnish government and ICT leaders met with Russoft and Ardin Software representatives to discuss the opening of a Finnish Innovation Centre in the city. The meetings took place at the headquarters of Arcadia Inc.

Finland is a global leader in the field of ICT. The policy of the Finnish government and business leaders is to share their expertise and to develop international cooperation in the sector. To this end, they have successfully set up Finnish Innovation Centers in China and the US. St Petersburg is now on the list.

Mr Joensuu, Finnish Deputy Minister for Trade and Industry expressed his government’s eagerness to strengthen cooperation with the expanding ICT market in St Petersburg. By planning to use their proven Innovation Center model, he said a number of Finnish companies are seriously considering opening offices in St Petersburg. Some would be located at the Center.

Representatives from the Finnish ICT companies Tekes, FinPro and Ardin made short presentations to explain the objectives of the Innovation Center project. In reply, the Russoft President, Valentin Makarov described how the Russian ICT sector is going from strength to strength. He cited the deepening relationship between Russoft and companies in Sweden, Denmark and especially Germany as evidence of a significant shift in Russo-European collaboration in the ICT market. He also highlighted the fact that companies found the Russian ICT sector attractive not due to its low rates but due to its strong science base and innovative drive.

Arkady Khotin, Head of the Finnish outsourcing company Ardin agreed that Russo-European ICT collaboration has become increasingly productive. However, he said that in his view more could be done to raise the profile of these activities. He suggested that part of the role of the Innovation Center could be as an Information Center. The center might start by creating a common online ‘data space’ where partners could showcase their collaboration and serve as an important networking tool.

Mr Khotin also emphasized the benefits of knowledge transfer in the educational sphere. He said that it is vital to maintain the traditionally high R & D skills and culture of innovation on which the ICT industry depends. This could be improved by coordinating the policy objectives of Finnish and Russian Universities, together with input from the regional ICT companies.

He recalled the "ICT Connector Project" 2002-3. A joint Finnish-Russian ICT initiative, it was sponsored by the World Bank, the Finnish Government and several Finnish ICT companies. Mr Khotin suggested that both parties may now be well placed to launch an "ICT Connector 2", which could provide additional support to the development of a successful state-level partnership.

The meetings closed with unanimous agreement that the creation of a Finnish Innovation Centre would be a positive development. Delegates from both countries emphasized the importance of closer cooperation, given the skills and expertise of CIS software companies. They agreed to formalize their collaboration in the form of a ‘roadmap’. It was also agreed to broaden the number of companies involved in the discussions and to seek their ideas and involvement in the project.

The Finnish party was represented by Antti Joensuu (Deputy Director General, Technology Department (international technology policy), Ministry of trade and industry), and included Kari Komulainen (Director for Global Operations, Tekes), Kirsi Vaha-Pietila (Head of the Finnish Eureka Office, European Operations, Tekes), Timo Koponen (Director, Finpro, St. Petersburg office), Jarmo Karesto (Key Partner Manager, Finpro), Seppo Laine (Senior Advisor, Finpro), Valery Sitnikov (Project Manager, Finpro, St. Petersburg office), Arcady Khotin (Managing Director, Ardin Software Oy).

The Russia ICT sector was represented by Valentin Makarov (President of Russoft association), Sergei Baklan (Managing Director, Arcadia Inc.), Svetlana Kazanskaya (Business Development Director, Arcadia Inc.) and Gennady Smorodin (ICT consultant, Ardin Software Oy, St. Petersburg office).

The Ministry of Trade and Industry in Finland, as an expert organisation in the field of industrial policy, is responsible for the operating conditions of enterprises, safeguarding the position of the citizens on the market and tending to the State's corporate assets.
www.ktm.fi

Tekes is the main public funding organisation for research and development in Finland. Tekes funds industrial projects as well as projects in research organisations, and especially promotes innovative, risk-intensive projects. Tekes offers partners from abroad a gateway to the key technology players in Finland.
www.tekes.fi

Finpro is a consulting organization focused on accelerating the internationalization of Finnish companies while managing the risks involved. Finpro carries out this national task through a client-oriented approach in co-operation with other service organizations working towards the same goals. It operates through a unique global network: 50 Finland Trade Centers in 40 countries as well as two Trade Centers in Finland.
www.finpro.fi

Ardin Software is an international software outsourcing company based in Vantaa, Finland. Ardin is a partner and commercial hand of 30+ Russian software developing enterprises that combine their technical and marketing efforts to render high-quality services to the Scandinavian market.
www.ardinsoftware.fi

RUSSOFT Association is the nation-wide association of the most technically competent software developing companies from Russia, Byelorussia and the Ukraine. By joining forces under the leadership of RUSSOFT the companies are able to provide customers with a range of comprehensive solutions and IT services.
www.russoft.org

Arcadia is an innovative software consulting company based in St. Petersburg, Russia, with offices and clients across the world. Having started its operations in 1993, Arcadia provides state-of-the-art custom software solutions and development services, proven by ISO 9001:2000 and Microsoft certification. Located in St. Petersburg, Russia, Arcadia is ideally positioned to deliver high-quality software services to clients worldwide.
www.arcadia.spb.ru

Russian IT Market to Grow 15%-20% in 2006 - Communications Ministry

The Russian IT and telecommunications market will grow 15%-20% in 2006, Oleg Byakhov, director of the ministry's strategy department, said at an IT roundtable on Tuesday.

The Russian high-tech sector grew 24.5% in 2005, which is much higher than the average world figure. Russia has overtaken in this sector such countries as Germany (3.4%), Britain (5.1%), France (6%), China (11.6%) and India (22.9%), Byakhov said.

The traditional voice communication sector has been growing at a good rate since 2000, he said. "This segment is becoming saturated and investment resources need to be moved," he said.

However, the Russian modern infocommunications sector is underdeveloped, Byakhov said. This includes broadband Internet and date transfers.

European Growth in IT Outsourcing

New research suggests that the European IT outsourcing market is set to post impressive growth over the coming years.

A Frost & Sullivan report supports claims that revenues from the EMEA outsourcing market will reach $16 billion (£8.4 billion) in 2012, up from the 2006 figure of $11.20 billion (£5.8 billion).

The figures back up anecdotal evidence which suggests that increasing numbers of businesses of all sizes are turning to the benefits of IT outsourcing to cut costs and improve efficiency.

"While the UK outsourcing market is very mature and has almost reached saturation, there are significant opportunities in other European nations," remarked Frost & Sullivan's research analyst, Michael DeSalles.

He added that the Netherlands along with central and eastern European countries look especially promising for new outsourcing contracts, with the information technology sector particularly strong.

The report claims that South Africa is also proving itself a popular location for outsourcing with UK IT firms.

Former Cold War Foe is Outsourcing Friend

The former Soviet Union, which was a foe of the U.S. and Western Europe during the Cold War, is proving to be an increasingly friendly outsourcing destination as the economy heats up.

As wages rise in India and the country tries to address a talent shortage, companies are broadening their outsourcing base by looking for partners in other areas of the world.

One area that could benefit is Eastern Europe. HP has already opened business centers in Bucharest, Sofia and Bratislava. Indian BPO providers and U.S. firms like Accenture are recruiting in the region, attracted by a workforce with fluency in multiple languages and skills in IT, economics and finance.

Arkadiy Dobkin, CEO of Eastern European outsourcing provider EPAM Systems, in a recent interview with IT Business Edge, said that the "Soviet heritage" of a strong engineering education produces 60,000 specialists a year in Russia alone.

Though Eastern European governments were not as quick as their counterparts in regions like India to recognize the economic benefits that outsourcing could provide, Dobkin said that countries like Belarus, Russia and Ukraine are now providing economic incentives to encourage outsourcing.

The result? Russia’s IT export industry has doubled over the past two years to reach $1 billion, and Dobkin said the market is on target for 30 percent growth in 2006.

WTO Accession Means More Investment for Russia - Chamber of Commerce and Industry

Russia's accession to the World Trade Organization (WTO) will enable the country to attract more foreign investment, but it is too soon to talk about he other pros and cons of joining the organization.

Russia's accession to the World Trade Organization (WTO) will enable the country to attract more foreign investment, but it is too soon to talk about he other pros and cons of joining the organization, Georgy Petrov, vice president of the Russian Chamber of Commerce and Industry, told Interfax.

"Nothing will change in the short term, the day after we actually accede. In order to know how things will alter in the medium term we need to know the terms on which Russia is accepted into the WTO, and we don't know those terms exactly," Petrov said.

Those terms will become clear when all of Russia's accession procedures have been wrapped up, Petrov said. Signing bilateral agreements with members of the working party on accession was just the first stage. "Multilateral negotiations still have to take place. They will resolve systemic issues and we don't yet know the outcome of those," Petrov said. "If Russia is able during multilateral talks to negotiate the most beneficial terms and take proper advantage of its rating upgrade, then it will receive definite advantages over the terms for its presence on the world market right now," he said.

Higher foreign investment will mean higher industrial output. Russia will be able to trade hi-tech goods abroad, and more of them, reducing Russia's exposure to energy prices, Petrov said.

Application Outsourcers Look Beyond Cost Savings, Says AberdeenGroup

Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies.

Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies, according to the findings from an Aberdeen Group benchmark study underwritten by IBM, Softtek, and Unisys. In addition, research found a strong preference for service providers located within the outsourcer's time zone.

"While cost savings remain an important cornerstone of many IT outsourcing strategies, most companies, especially in the mid-market, look at outsourcing application work to boost the skills of their internal IT staffs and allow them to tackle more strategic work," said Rick Saia, Aberdeen’s Research Analyst for IT services.

Although India has become a popular destination for application development outsourcing work, companies in other nations are ramping up their IT capabilities, affording more options in choosing providers. "This allows companies more 'near shore' options as opposed to looking to the other side of the world," said Saia. "Many large providers recognize this, though, and are looking to perform more work in other countries or at least partner with native firms that can provide these services."

The study found that companies that are best at outsourcing application development and maintenance save more than twice the industry average in application-related costs. They also experience close to 50% higher user satisfaction and - on average - a 67% increase in projects delivered on time and within budget.

AberdeenGroup's report, "Outsourcing Application Development and Maintenance", is underwritten by the following companies: IBM, Softtek, and Unisys.

US Firms Scaling Up Outsourcing of Software Activities: Forrester

The latest Forrester Research report on the state of Enterprise Software Adoption asserts that enterprises in North America are scaling up outsourcing of their software activities.

The latest Forrester Research report on the state of Enterprise Software Adoption asserts that enterprises in North America are scaling up outsourcing of their software activities, especially in the areas such as custom application development services, maintenance and support for packaged applications, and maintenance and support for custom applications, and that software-related outsourcing is most common among the largest (Global 2000) enterprises.

In a report titled ‘The State Of Enterprise Software Adoption,’ Forrester’s principal analyst R Ray Wang analyses the trends in software technology adoption by enterprises, based on the data extracted from the "Forrester Business Technographics September 2006 North American And European Enterprise Software Survey".

According to the report, one quarter of North American enterprises are currently using offshore providers to meet some of their software service needs. However, this rate climbs up if considered those enterprises that already outsource various parts of the enterprise software processes.

It highlights that hiring an outsourcer to help deploy newly purchased infrastructure and/or applications software is now a common trend for North American enterprises, and the role of external service providers is an important portion of North American software shops.

Observing that the largest enterprises are biggest outsourcers of software activities, Ray concludes, "Outsourcers hired to complete software tasks continue to move up the value creation chain and they are performing a wide range of activities. Further, enterprises that currently outsource some form of their software-related activity are also more likely to have an open opinion toward offshore IT service providers".

Enterprise IT to Outsource More Across All Categories in 2007

According to AMR, the 7 categories tested for outsourcing showed a 1% to 3% increase in how much more of the function will likely be outsourced in 2007 by manufacturers and distributors.

According to AMR in the 7 categories tested for outsourcing - application development, hardware maintenance and support, data center operations, web hosting, application implementation, application management, and security - every single one showed a 1% to 3% increase in how much more of the function will likely be outsourced in 2007 by manufacturers and distributors. Application development, hardware maintenance and management, application management, and security showed a 3% to 5% increase in how much will be sent offshore. Excerpts from the article are below.

Breakdown of spending:
Application development dominates, both in terms of how much is outsourced and what percentage of that is offshored. Currently respondents outsource 24% of their application development work, with plans to outsource 27% next year. Today a quarter of this work is offshored, and next year nearly 30% will be.

Infrastructure management is also on a growth trajectory, with 23% of hardware maintenance and support outsourced this year, and 26% slated to go to outsource providers in 2007. While a lower percentage of this work-just 7% today-is conducted offshore, companies have plans to push it to 10% next year.

Application management is the big offshore story here. While a lower overall percentage of application management is outsourced-15%, with 16% planned for next year-a high percentage of what is outsourced is taken offshore. Respondents said they presently conduct 17% of outsourced application management offshore, but plan to push that ratio up to 22% next year. Application implementation is clearly something that clients either want to own or work with a third-party consultant on an as-needed basis to support.

Data center is often a candidate for outsourcing-20% of this activity is outsourced, with 22% planned for next year-but much less frequently for offshoring.

Lean principles also apply to the IT organization most of all, leading to an increased uptake of outsourcing and offshoring.

Third-party services and internal head count account for 11% and 24% of the total, respectively. Over a third of respondents plan to increase their spending in both categories next year. For respondents that plan to decrease spending in these areas, 25% said they'd reduce internal head count, while only 19% said they'd reduce the use of third-party services.

Even though budgets for 2007 are growing by 3% on average, doing more with less is a fact of life for enterprise IT departments.

Save for the 5% increase in the amount of application management that will migrate offshore next year, there are no startling wholesale jumps-simply a continued, inexorable shift toward third-party and offshore support.

Outsourcing Has Benefits

Without outsourcing some American companies would likely be put out of business by foreign companies that could do what they do better and faster.

I don't buy into the scaremonger's theory that all IT professionals and engineers will be out of work because of offshore outsourcing. Have they actually looked at the numbers? The percentage of jobs going overseas is minuscule. A survey done September 19th, 2006 by the Society for Information Management stated that "3.3% of corporate budgets were allocated to the funding of offshore outsourcing programs" and 33% of their budgets were allocated for in-house staff.

But if that doesn't help the future for IT professionals look any less dismal, consider that the same report also stated that, "nearly 2/3 of the respondents will maintain or increase their levels of IT staffing in 2007." Outsourcing is inevitable. We work on laptops that have parts that were made in 4 different countries and assembled in the US, we drive cars that had parts made all around the world - yet say Ford or Mercury on them. It's a global world now and outsourcing makes sense socially, financially and economically.

Americans are now competing worldwide. We're not just up against the best and brightest in the US, we're up against the best and brightest in the world. That's enough to make anyone nervous. People criticize outsourcing because they fear for their jobs, but outsourcing is not the only reason or even the primary reason for the loss of jobs. IT workers must constantly update their skills as technology is always changing; there are always new graduates with the latest skills requiring less pay to do the same job.

Outsourcing results in American research and development labs all around the world, developing the cutting edge technology the company needs to stay on top. Without outsourcing some American companies would likely be put out of business by foreign companies that could do what they do better and faster. When American companies stay on top of the market because of the products and prices that result from outsourcing it creates more jobs in America. Not to mention exposing these countries to new technology and products creates a new market for the product, and more demand for the product means more jobs will be created in the company here in the US.

American companies feel the heat too, not just people that fear their jobs will be outsourced. There are companies out there making the same quality or higher quality products and getting them to the market faster and at a lower cost. Look at the recent rumors of a merger between Ford and Toyota; it's stiff competition. How can we blame Ford for outsourcing so that their prices remain competitive with the foreign market?

In this global world smart companies are making smart moves. They are searching for the latest and greatest technologies all over the world. Instead of developing their next product line using only research and development teams in the US they have global offices and teams. This allows them to work with the newest technologies wherever in the world they are, and to get their products developed and to the market quicker and cheaper than before.

America has reached its full potential; don't we have an obligation to help developing countries reach their full potential? Lets look at what offshore outsourcing is doing for the countries that jobs are being outsourced to; why isn't anyone concerned about these huge corporations taking advantage of the people that they employ overseas? Shouldn't they be obligated to pay their employees a livable wage and be prohibited from employing children?

The reality is that right now the world is global and will be even more so in the future. Data communication advances in the last 40 years has made it possible for people to do business in different countries just as efficiently as if they were in different cities. Nationalism is truly a thing of the past; the boundaries drawn on the ground by each country were blurred with the advent of the World Wide Web.

Steve Fullmer, in his book "Why to Support Global Outsourcing", said it best: "What we should have learned most from 9/11 is that we are part of a global community and we must expand our horizons. To participate in that community and build understanding will lead to trust. Only by establishing trust can we return to the economic and social freedoms that preceded the attack. The economic and social disparity between the US and most foreign countries necessitates a more global distribution of wealth and opportunity." Outsourcing helps to lessen the gap between the US and other countries, creating a global community where society as a whole evolves by sharing technological advances.

IDC: IT Outsourcing Will Pick Up, But Available Resources Are Going To Be Strained

As Merger and Acquisition activity is picking up speed again, analysts at IDC report that enterprises are likely going to focus on reducing overall network costs whilst adapting their systems to become more flexible.

The demands that this entails will lead to a rise in outsourcing to external IT specialists, IDC analysts believe. They say that the telecommunications industry is most likely to pick up the tab, but that this industry itself needs to establish credibility first.

"With increasing merger and acquisition activity and rapidly changing business models, enterprises are looking for ways to reduce overall network costs, cope with increasing complexity, and become increasingly adaptable", IDC reports in a study entitled Enterprise Network Outsourcing: Big Challenges Lie Ahead.

The road ahead is not without its complications, IDC analysts warn. They believe that the pent up demand might strain the available network outsourcing services. Citing its WAN Manager Survey, the analysts say that Banking/Finance and Insurance and Education verticals are likely going to be producing most of the action for network outsourcing services.

The demand for adaptive IT service delivery will accelerate the demand for new on-demand utility-like platforms. Unlike the traditional systems architectures of today, IDC says the utility-like model will increase a company's flexibility by turning traditionally fixed costs into variable costs.

Delivering outsourced network-IT services will prove increasingly challenging for all service providers, IDC says. "As the service delivery architectures standardize service providers will have to adapt their service delivery models to compete. [...] The strategic issues of this shift are more than just technical in nature, as they will alter the competitive landscape, in some cases changing the buyer profile and altering the company's mix of partners and suppliers," says Sean Hackett, research manager for IDC's Business Network Services. He adds that the telecommunications carriers have a new advantage in this market primarily because of the cost advantages of scale and their deep understanding of the network. However, he says, the carriers first have to raise their credibility in the marketplace as IT service providers.

Restructuring Outsourcing the Right Way

In order to be able to adapt to changing business and marketplace, restructuring has become an important part of outsourcing lifecycle - says TPI research.

In order to be able to adapt to changing business and marketplace, restructuring has become an important part of outsourcing lifecycle. Research firm TPI pointed out that, despite the intense competition amongst service providers for restructuring related revenues, many customers will fail to realize any additional material benefit. The problem is that too many companies look at contract restructurings too late and consider them from too narrow a perspective.

According to TPI for an effective restructuring it is important to outline the plan by defining the business drivers and objectives going forward. The restructuring projects should form an integral part of the organisation’s governance arrangements. Another factor to consider is that it is vital for the customer to create leverage before entering into any restructuring as the service provider has no incentive to concede margin or contract terms without good cause. Timing is also crucial and if a company hasn’t started the planning process two years in advance, there is significant risk that its options will be constrained and its negotiating position compromised. Conducting a successful restructuring demands senior sponsorship and a dedicated project team.

According to TPI over the next few years billions of euros worth of outsourcing agreements are due for renewal and billions more will be subject to mid-term renegotiation.

2005 witnessed an unprecedented volume of contract restructurings 2005 witnessed an unprecedented volume of contract, both the volume and the value over euros 14 billion. TPI forecast that more restructurings are to come. Furthermore, many outsourcing contracts are and will be restructured during their initial terms.

TPI has identified three key customer goals that are driving much of the current volume of restructurings:
• Customers want a best-of-breed approach;
• Customers want options for offshore service delivery;
• Customers want improved access to service provider creativity, innovation & best practices.

TPI research reveals that less than 15 per cent of companies change service providers and only a handful of organisations bring the service back in-house. While this may seem like great news for service providers there are, however, increasing trends towards both switching service providers and moving from a single service provider to a multi-service provider strategy.

TPI said that underpinning these shifts is not only a change in customer preferences, but also an increasing diversity of competition, coupled with a levelling off of growth in the IT outsourcing market and a relative decline in the total value of new IT outsourcing contract awarded.

Customer retention will increasingly depend on an incumbent’s ability to offer a competitive proposition for every facet of the service and this will often require significant changes in price, contractual terms, scope and delivery approach from the original agreement.

TPI advised that a successful restructuring initiative should start with a review - or the creation - of a company-wide sourcing strategy. It is vital that the project does not simply centre on the need to fix a series of current commercial or service deficiencies. Rather, the restructuring should be informed by the overall strategy for, and needs of, the organisation. This should bring together the business strategy and its support requirements to define the appropriate service delivery framework - that mix of shared, devolved, in-sourced, outsourced, on-shore, nearshore, and off-shore capabilities under a coherent governance structure and delivered as an efficient, effective whole. It must also design the route map outlining how this sourcing strategy will be established over time.

The next step is defining the business drivers and objectives going forward, such as cost savings, service improvement, contract flexibility and improvement. These must be balanced with both the company’s internal realities - including their business model, internal politics, risk tolerance and any regulatory issues - and external factors, such as the incumbent service provider’s business position, market dynamics and commercial best practice.

Organisations need to review all of their options thoroughly and objectively. Options include:
• Renew the contract with the incumbent;
• Review and amend the current scope of services and/or the current service provider mix;
• Go to market via the RFP route;
• Terminate the contract and bring the services back in-house;
• A combination of the above.

TPI concludes, "Armed with clarity of purpose and direction and with sufficient time to execute the selected strategies, companies can approach a restructuring from a position of confidence and strength."

Outsourcing Press Releases

How is it to run a business on the Internet with Russians?

"There is Russian spirit here, it smells like Russia," – today this phrase can be heard not only in Russian fairytales but also in a tangled multi-level structures of the modern Internet.

International IT market is resisting the downturn

Turnover in information technology in Western Europe to increase by 2 percent in 2009
Strongest growth in demand is for software and IT services
IT systems helping businesses to manage the crisis
Source: http://www.eito.com

Russian IT Market to Grow, Officials Say.

Russia's IT market is projected to triple to $39bn by 2010.

CIOs Uncensored: Outsourcing's Pain Points

The very reasons that companies choose to outsource software development make it one of the most difficult things to outsource successfully.

Russian Programmer Twice the Best Worldwide

The Moscow student Peter Mitirichev leaded the Algorithm Section at the world championship TopCoder-2007. He repeated his last year's success.

Security zone: outsourcing improves security jobs

Companies of all sizes are outsourcing some part of their IT and concentrating on their core business activities and strategic IT plans. Even where IT operations are retained in-house, some activities will still be performed by external providers.

UK leads outsourcing IT trend

The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.

Navigating a Multigenerational IT Work Force

Managers must tackle the cultural divide between Boomers, Gen Xers and Generation Y workers or risk alienating all.

Text Messaging Booms at U.S. Colleges

News Analysis: The rush to more efficiently send out emergency text messages to students at universities has been intensified by the Virginia Tech shootings.

Should you outsource?

Recent trends in software development market show that it is no longer the most efficient way to work onshore.

Private Equity Looks at Booming Russia IT Market

Russia's booming information technology (IT) market is a key target for private equity firms across the globe, according to a private equity lawyer with global law firm Squire, Sanders & Dempsey L.L.P.

Total IT Outsourcing Proving Popular

A leading IT expert has said that total IT outsourcing (TITO) is becoming a very popular solution with many companies.

Russia To Become Third Largest Outsourcing Destination by 2010

Research and Markets has announced the addition of Frost & Sullivan’s new report "Social and Infrastructure & Labor Analysis for the Russian Information and Communication Technologies Industry" to their offering.

The Next Offshoring Surge 'Basic Necessity'

Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services

Big Surge Expected In Offshore Outsourcing By Banks, Study Says

Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

Down To Business: Outsourcing Customers Send Mixed Signals

Some 89% of the customer organizations surveyed by KPMG say they plan to maintain or increase their current level of outsourcing. So why do many of the other survey findings paint such an unflattering picture of these relationships?

Outsourcing Not Slowing Down: Study

Eighty-nine percent respondents to a KPMG study say they plan to maintain or increase their present level of sourcing

Firms Looking to Eastern Europe for IT Outsourcing

IT and software development outsourcing firms in eastern Europe are finding their services increasingly in demand, according to recent reports.

Russia to Become Real Highlight at CeBIT 2007

Russia is to become a partner of the world’s largest IT trade fair in Hanover in March. The participation in CeBIT will help Russia advertise its IT products. The federal budget has already allocated 8.2 million rubles to support Russian exhibitors.

The IT Analysts Make Their 2007 Predictions

As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.

Russian IT Market to Grow 15%-20% in 2006 - Communications Ministry

The Russian IT and telecommunications market will grow 15%-20% in 2006, Oleg Byakhov, director of the ministry's strategy department, said at an IT roundtable on Tuesday.

European Growth in IT Outsourcing

New research suggests that the European IT outsourcing market is set to post impressive growth over the coming years.

Former Cold War Foe is Outsourcing Friend

The former Soviet Union, which was a foe of the U.S. and Western Europe during the Cold War, is proving to be an increasingly friendly outsourcing destination as the economy heats up.

WTO Accession Means More Investment for Russia - Chamber of Commerce and Industry

Russia's accession to the World Trade Organization (WTO) will enable the country to attract more foreign investment, but it is too soon to talk about he other pros and cons of joining the organization.

Application Outsourcers Look Beyond Cost Savings, Says AberdeenGroup

Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies.

US Firms Scaling Up Outsourcing of Software Activities: Forrester

The latest Forrester Research report on the state of Enterprise Software Adoption asserts that enterprises in North America are scaling up outsourcing of their software activities.

Enterprise IT to Outsource More Across All Categories in 2007

According to AMR, the 7 categories tested for outsourcing showed a 1% to 3% increase in how much more of the function will likely be outsourced in 2007 by manufacturers and distributors.

Outsourcing Has Benefits

Without outsourcing some American companies would likely be put out of business by foreign companies that could do what they do better and faster.

IDC: IT Outsourcing Will Pick Up, But Available Resources Are Going To Be Strained

As Merger and Acquisition activity is picking up speed again, analysts at IDC report that enterprises are likely going to focus on reducing overall network costs whilst adapting their systems to become more flexible.

Restructuring Outsourcing the Right Way

In order to be able to adapt to changing business and marketplace, restructuring has become an important part of outsourcing lifecycle - says TPI research.

Outsourcing Press Releases

How is it to run a business on the Internet with Russians? "There is Russian spirit here, it smells like Russia," – today this phrase can be heard not only in Russian fairytales but also in a tangled multi-level structures of the modern Internet.

International IT market is resisting the downturn Turnover in information technology in Western Europe to increase by 2 percent in 2009Strongest growth in demand is for software and IT servicesIT systems helping businesses to manage the crisisSource: http://www.eito.com

Russian IT Market to Grow, Officials Say. Russia's IT market is projected to triple to $39bn by 2010.

CIOs Uncensored: Outsourcing's Pain Points The very reasons that companies choose to outsource software development make it one of the most difficult things to outsource successfully.

Russian Programmer Twice the Best Worldwide The Moscow student Peter Mitirichev leaded the Algorithm Section at the world championship TopCoder-2007. He repeated his last year's success.

Security zone: outsourcing improves security jobs Companies of all sizes are outsourcing some part of their IT and concentrating on their core business activities and strategic IT plans. Even where IT operations are retained in-house, some activities will still be performed by external providers.

UK leads outsourcing IT trend The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.

Navigating a Multigenerational IT Work Force Managers must tackle the cultural divide between Boomers, Gen Xers and Generation Y workers or risk alienating all.

Text Messaging Booms at U.S. Colleges News Analysis: The rush to more efficiently send out emergency text messages to students at universities has been intensified by the Virginia Tech shootings.

Should you outsource? Recent trends in software development market show that it is no longer the most efficient way to work onshore.

Private Equity Looks at Booming Russia IT Market Russia's booming information technology (IT) market is a key target for private equity firms across the globe, according to a private equity lawyer with global law firm Squire, Sanders & Dempsey L.L.P.

Total IT Outsourcing Proving Popular A leading IT expert has said that total IT outsourcing (TITO) is becoming a very popular solution with many companies.

Russia To Become Third Largest Outsourcing Destination by 2010 Research and Markets has announced the addition of Frost & Sullivan’s new report "Social and Infrastructure & Labor Analysis for the Russian Information and Communication Technologies Industry" to their offering.

The Next Offshoring Surge 'Basic Necessity' Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services

Big Surge Expected In Offshore Outsourcing By Banks, Study Says Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

Down To Business: Outsourcing Customers Send Mixed Signals Some 89% of the customer organizations surveyed by KPMG say they plan to maintain or increase their current level of outsourcing. So why do many of the other survey findings paint such an unflattering picture of these relationships?

Outsourcing Not Slowing Down: Study Eighty-nine percent respondents to a KPMG study say they plan to maintain or increase their present level of sourcing

Firms Looking to Eastern Europe for IT Outsourcing IT and software development outsourcing firms in eastern Europe are finding their services increasingly in demand, according to recent reports.

Russia to Become Real Highlight at CeBIT 2007 Russia is to become a partner of the world’s largest IT trade fair in Hanover in March. The participation in CeBIT will help Russia advertise its IT products. The federal budget has already allocated 8.2 million rubles to support Russian exhibitors.

The IT Analysts Make Their 2007 Predictions As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.

Russian IT Market to Grow 15%-20% in 2006 - Communications Ministry The Russian IT and telecommunications market will grow 15%-20% in 2006, Oleg Byakhov, director of the ministry's strategy department, said at an IT roundtable on Tuesday.

European Growth in IT Outsourcing New research suggests that the European IT outsourcing market is set to post impressive growth over the coming years.

Former Cold War Foe is Outsourcing Friend The former Soviet Union, which was a foe of the U.S. and Western Europe during the Cold War, is proving to be an increasingly friendly outsourcing destination as the economy heats up.

WTO Accession Means More Investment for Russia - Chamber of Commerce and Industry Russia's accession to the World Trade Organization (WTO) will enable the country to attract more foreign investment, but it is too soon to talk about he other pros and cons of joining the organization.

Application Outsourcers Look Beyond Cost Savings, Says AberdeenGroup Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies.

US Firms Scaling Up Outsourcing of Software Activities: Forrester The latest Forrester Research report on the state of Enterprise Software Adoption asserts that enterprises in North America are scaling up outsourcing of their software activities.

Enterprise IT to Outsource More Across All Categories in 2007 According to AMR, the 7 categories tested for outsourcing showed a 1% to 3% increase in how much more of the function will likely be outsourced in 2007 by manufacturers and distributors.

Outsourcing Has Benefits Without outsourcing some American companies would likely be put out of business by foreign companies that could do what they do better and faster.

IDC: IT Outsourcing Will Pick Up, But Available Resources Are Going To Be Strained As Merger and Acquisition activity is picking up speed again, analysts at IDC report that enterprises are likely going to focus on reducing overall network costs whilst adapting their systems to become more flexible.

Restructuring Outsourcing the Right Way In order to be able to adapt to changing business and marketplace, restructuring has become an important part of outsourcing lifecycle - says TPI research.

How is it to run a business on the Internet with Russians?

"There is Russian spirit here, it smells like Russia," – today this phrase can be heard not only in Russian fairytales but also in a tangled multi-level structures of the modern Internet.

International IT market is resisting the downturn

Turnover in information technology in Western Europe to increase by 2 percent in 2009
Strongest growth in demand is for software and IT services
IT systems helping businesses to manage the crisis
Source: http://www.eito.com

Russian IT Market to Grow, Officials Say.

Russia's IT market is projected to triple to $39bn by 2010.

CIOs Uncensored: Outsourcing's Pain Points

The very reasons that companies choose to outsource software development make it one of the most difficult things to outsource successfully.

Russian Programmer Twice the Best Worldwide

The Moscow student Peter Mitirichev leaded the Algorithm Section at the world championship TopCoder-2007. He repeated his last year's success.

Security zone: outsourcing improves security jobs

Companies of all sizes are outsourcing some part of their IT and concentrating on their core business activities and strategic IT plans. Even where IT operations are retained in-house, some activities will still be performed by external providers.

UK leads outsourcing IT trend

The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.

Navigating a Multigenerational IT Work Force

Managers must tackle the cultural divide between Boomers, Gen Xers and Generation Y workers or risk alienating all.

Text Messaging Booms at U.S. Colleges

News Analysis: The rush to more efficiently send out emergency text messages to students at universities has been intensified by the Virginia Tech shootings.

Should you outsource?

Recent trends in software development market show that it is no longer the most efficient way to work onshore.

Private Equity Looks at Booming Russia IT Market

Russia's booming information technology (IT) market is a key target for private equity firms across the globe, according to a private equity lawyer with global law firm Squire, Sanders & Dempsey L.L.P.

Total IT Outsourcing Proving Popular

A leading IT expert has said that total IT outsourcing (TITO) is becoming a very popular solution with many companies.

Russia To Become Third Largest Outsourcing Destination by 2010

Research and Markets has announced the addition of Frost & Sullivan’s new report "Social and Infrastructure & Labor Analysis for the Russian Information and Communication Technologies Industry" to their offering.

The Next Offshoring Surge 'Basic Necessity'

Banks worldwide will dramatically increase the portion of their IT budgets devoted to offshore services

Big Surge Expected In Offshore Outsourcing By Banks, Study Says

Offshore tech spending by banks will increase from the present 6% of the banking industry's $44 billion total annual IT budget to 30% by 2010, according to Deloitte.

Down To Business: Outsourcing Customers Send Mixed Signals

Some 89% of the customer organizations surveyed by KPMG say they plan to maintain or increase their current level of outsourcing. So why do many of the other survey findings paint such an unflattering picture of these relationships?

Outsourcing Not Slowing Down: Study

Eighty-nine percent respondents to a KPMG study say they plan to maintain or increase their present level of sourcing

Firms Looking to Eastern Europe for IT Outsourcing

IT and software development outsourcing firms in eastern Europe are finding their services increasingly in demand, according to recent reports.

Russia to Become Real Highlight at CeBIT 2007

Russia is to become a partner of the world’s largest IT trade fair in Hanover in March. The participation in CeBIT will help Russia advertise its IT products. The federal budget has already allocated 8.2 million rubles to support Russian exhibitors.

The IT Analysts Make Their 2007 Predictions

As we enter the new year, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year.

Russian IT Market to Grow 15%-20% in 2006 - Communications Ministry

The Russian IT and telecommunications market will grow 15%-20% in 2006, Oleg Byakhov, director of the ministry's strategy department, said at an IT roundtable on Tuesday.

European Growth in IT Outsourcing

New research suggests that the European IT outsourcing market is set to post impressive growth over the coming years.

Former Cold War Foe is Outsourcing Friend

The former Soviet Union, which was a foe of the U.S. and Western Europe during the Cold War, is proving to be an increasingly friendly outsourcing destination as the economy heats up.

WTO Accession Means More Investment for Russia - Chamber of Commerce and Industry

Russia's accession to the World Trade Organization (WTO) will enable the country to attract more foreign investment, but it is too soon to talk about he other pros and cons of joining the organization.

Application Outsourcers Look Beyond Cost Savings, Says AberdeenGroup

Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies.

US Firms Scaling Up Outsourcing of Software Activities: Forrester

The latest Forrester Research report on the state of Enterprise Software Adoption asserts that enterprises in North America are scaling up outsourcing of their software activities.

Enterprise IT to Outsource More Across All Categories in 2007

According to AMR, the 7 categories tested for outsourcing showed a 1% to 3% increase in how much more of the function will likely be outsourced in 2007 by manufacturers and distributors.

Outsourcing Has Benefits

Without outsourcing some American companies would likely be put out of business by foreign companies that could do what they do better and faster.

Restructuring Outsourcing the Right Way

In order to be able to adapt to changing business and marketplace, restructuring has become an important part of outsourcing lifecycle - says TPI research.