Businesses
interested in outsourcing IT services to offshore destinations
should consider the 10 countries joining the European Union in May,
analyst firm Gartner has advised.
Offshore
outsourcing is now a mainstream part of IT strategy, having grown
by 40% in 2003, with India being the dominant provider of services,
although China is growing quickly as an offshore destination.
The countries
coming into the EU in May, which include the Czech Republic,
Slovakia, Poland and Hungary, may not challenge India or China in
terms of scale, but they do have a part to play, Gartner said.
According to the
analyst firm, the opportunity takes two forms - working with a firm
established within one of the new EU states, or investing in
in-house infrastructure based in an eastern European country.
Express delivery
firm DHL has pioneered the use of eastern European locations for IT
centres, having opted for the second approach.
Last July,
Computer Weekly revealed that the company was planning to relocate
the running of its entire European IT infrastructure to the Czech
Republic. From May, DHL’s networks, hardware, operating systems,
applications and specialist IT staff will be run from an IT
operations centre in Prague.
However, while
both approaches take advantage of the lower costs and lower wages
available there, companies should be beware of ignoring the soft
costs of cross-border trading, Gartner warned.
Systems must be
adjusted to handle tax, currency, customs and language
incompatibilities, and those upgrade costs will be transferred to
the customer, perhaps shifting the cost-savings balance.
Ian Marriott, vice
president at Gartner, said, “Enterprises looking for offshore
service providers should check for language and cultural
compatibility, and run pilot projects with non-mission-critical
activities to test the capabilities of these countries.”
When evaluating
offshore countries, Gartner advised organisations to look at
factors such as:
• Government
support
•
Infrastructure
• Data and
intellectual property security
• Educational
system
• Software and
hardware resources
• Language skills