#nearshore R&D center

[philalbinus]

RPO & the India Advantage

Long known as the destination for call centers and back-office processing, the outsourcing and offshoring giant is pivoting to R&D, engineering, data analytics and now AI.

Here’s why your organization must join Team India.

In the years since the global pandemic and the subsequent lockdown, India pivoted to become a center of true technological innovation that is dedicated to the next-wave advancements in programming, research and development, engineering, data analysis and the newly introduced business tools: artificial intelligence and Generative AI. India outsourcing centers also embrace hybrid and office-based working models which help broaden the search for candidates who are entertaining multiple job offers in a tight labor market. 

Let’s look at the India RPO advantage by the numbers:

- India’s total labor force is an estimated 437.2 million, i.e., larger than the total population of the United States (338.3 million)

- India’s Global Capability Centers employ up to 70% of the world’s GCC headcount 

- Last year, India reported an overall leasing volume of 27.3 million sqft in the offshoring industry, a 26% increase from the previous year

- Demand for AI services could reach $17 billion by 2027, according to a report by IT industry body Nasscom

- Last year, around 45% of high-tech and travel companies, and 43% of telecom, manufacturing, and construction firms, nearshored operations to India, per media reports

In a few short years, India is now not only an exporter of high talent, it’s attracting and retaining talent as well. As forward-thinking talent acquisition leaders looking to expand its recruitment process outsourcing, it’s time to prepare for the next India business revolution.

Read the entire article here

[joshuaotwell]

Joshua Otwell is a Backend Developer using MySQL, Python, and PHP technologies to deliver results. With a background as a Pipeline Surveyor, the transition to a Pipeline Survey Data Analyst sparked a desire to provide Web Applications, Web Sites, and Reporting Dashboards manipulating Pipeline Survey data he is an expert on. MySQL is his passion, sweet spot, and strongest skill.

[mobappdevelopmentcompany]

Offshore Software Development Process: All You Need to Know!

The concept of ‘offshoring’ software development projects has been widely adopted ever since its inception. This approach is indeed a lucrative strategy to the path of success. But why?

Well, today most software providers are based in the U.S.A. and Western Europe. However, the development infrastructure expenses and labor costs in these countries are humongous. Consequently, it becomes increasingly challenging for businesses to cope with the dynamic and competitive market. As such, Offshore Outsourcing becomes the most viable option.

The concept of offshore outsourcing is quite complex to comprehend and often baffles entrepreneurs, particularly start-ups. So, I have penned down an all-inclusive write-up on the myriad aspects of offshoring software development projects.

Let’s commence!

Offshore Software Development: In a Nutshell

Offshore software development refers to opening up a new software development center in other countries and hiring dedicated technical professionals for this offshore development center. Employees in this company hold permanent employment just like the local employees and the only difference is that these employees are located in other countries.

Companies adopt this strategy to reap the benefits of cheaper operating costs, a huge talent pool, and the opportunity to scale speedily so that they can optimize their output and enhance their technical proficiency without having to encounter hassles or incur huge expenses.

As per research by Statista published in July 2021, it has been observed that India turns out to be the most preferred location for hiring offshore business services.

This is because an offshore software development company in India promises lower wages and easy availability of skilled professionals in comparison to Western Europe and Asia.

To cite an example, software tycoons like Google, Apple, and Microsoft have set up their R&D centers in Bangalore, India, termed the Silicon Valley of Asia.

Offshore Software Development Outsourcing Models

Fixed-price

Under this model, the client firm and the development team/company decide a fixed price as well as the timeline for project execution, and any new client requirement is usually re-evaluated concerning costs and timeframe. This approach works best when both sides are clear about the specific project needs and there are hardly any chances of deviation regarding requirements.

Dedicated Team and Resources

This model involves the outsourcing agency assigning a skilled development team for the client company and this team is treated as the client’s employees who are working remotely. This approach is suitable for long-term projects wherein the client intends to hire software developers in a flexible manner; usually for creating software with scalability scope, or for maintenance after product development.

Time and Material

As per this outsourcing model, the client makes the payment based on the resource utilization – hours of work and materials used. This approach is implemented when the client is unable to define the project needs clearly, or when a trial is being developed before crafting a full-fledged app.

When should you opt for Offshore software Development over In-house Hiring?

Hiring an outsourcing team is the best option under the following circumstances.

Your budget is limited and you are looking for cost-cutting.

Your region faces a dearth of the required expertise needed by your software development project.

Your in-house professional team is too busy working on other important projects.

You desire faster product delivery and strict adherence to timelines.

You wish to leverage the most recent technology stack for your project and you have to hire experts for the same.

Picking the Right Software Outsourcing Agency: Factors to consider

Hiring the wrong team will create roadblocks in your path to success. So, choose wisely. Check out the major aspects to consider while you outsource your project to an offshore team or partner with a software solutions provider.

Obtain the assistance of an experienced technology expert from your side while hiring an offshore team.

Check the firm’s profile by evaluating earlier/ongoing projects, testimonials, blog posts, case studies, etc., and review references on business listing portals like Clutch; to gauge their overall proficiency.

In case you have a distinct app idea, ensure that the outsourcing firm signs a non-disclosure agreement (NDA).

Mention the technologies you would like to use in the project and clearly define the expected outcome.

Select the right offshore development model – development centers, dedicated teams, or project-based contracts - depending on your project requirement.

Maintain sound communication with your service provider by being in touch, providing the necessary guidance, and exercising control over the development process.

Make sure the partner firm provides support and maintenance services post-development. This way, your software is regularly updated to the recent versions and thus retains its value.

Offshore Software Development Services: Business Benefits

Access to global Talent Pool

Entrepreneurs enjoy access to a huge pool of talented, qualified, and experienced software professionals across the globe. These professionals are not only proficient in the latest technologies, but also keep their skillset updated from time to time as per the technical advancements.

Surprisingly, many developed nations like the U.S. suffers from IT talent scarcity; whereas popular outsourcing destinations like India, China, Vietnam, etc. possess a pool of software engineering expertise.

Lower Operational Costs

Offshoring the product development process comes with the promise of much lower operational costs as compared to hiring an in-house team; owing to lower wages of employees. Moreover, you don’t need to spend on additional expenses like office space, software licenses, equipment, utilities, and recruitment processes.

Shared Responsibility concerning Risk management

Managing risks effectively while executing software development projects is a crucial factor in determining success, and should not be undermined. And the good news is that risk management becomes a shared responsibility when a project is offshored. Besides, the risks involved in the developmental process can be handled in a better way by the offshore company as it happens to be a part of its core business.

More time to focus on Core Business Functions

Unlike in-house hiring, you need not be accountable for every minute detail of the product development process as the vendor manages all important functions right from recruitment to product delivery. As such, you find more time to focus on core business activities like establishing a robust client base or interacting with business partners.

The Opportunity to Scale Speedily

It’s quite challenging to hire in-house professionals as it involves time, effort, as well as significant financial risks; resulting in work overloading, compromised product quality, and losing clients to competitors.

Outsourcing averts such crises situations as payrolls are lower and the firm is able to shoulder down periods effortlessly. Additionally, it helps in scaling up the team and the project speedily without much ado. This leads to readiness for tackling more projects and hence opens up new opportunities for your business.

Profitable Outsourcing Locations

India

India is the most lucrative location for offshoring software projects amongst all other destinations. The reason is it offers a pool of skilled developers and highly trained experts with fluent English language skills, and a comparatively lower cost of project development.

Eastern Europe

For businesses based in Western Europe, nearshoring software services to Eastern European countries is a viable option. It is useful for businesses that need continual real-time collaboration with their in-house workforce.

Latin America

Outsourcing projects to Latin America works well for companies based in North America. This is because their time zones are almost similar which enables client firms to manage projects in real-time and to establish effective communication with their offshore team.

Bottom line:

I hope this post has provided you comprehensive guidance on all aspects of the offshore software development process. This profitable approach is sure to empower your upcoming project with a proficient development team, high-quality codes and ensure a quick developmental cycle. So, think wisely and act smart!

To know more about our core technologies, refer to links below:

Swift App Development Company

Java App Development Company

.Net App Development Company

[netzpalaver]

Neues Entwicklungszentrum von NFON soll am Tech-Hub Lissabon entstehen NFON hat die Gründung eines Nearshore-Standortes für ein weiteres Research & Development Center in Europa beschlossen und sich dabei für Portugal entschieden. Im September 2020 ist die Gründung in der Área Metropolitana de Lisboa mit der Zielsetzung geplant, so schnell wie möglich durchzustarten, um noch in diesem Jahr die ersten Entwickler zu beschäftigen und im Folgejahr das R&D Team auf 30 Spezialisten zu erhöhen.

[textiletoday]

The new year 2019 is going on. Every year fashion industry gets a new look, new dimension, which could be optimistic or pessimistic for the businessman. Therefore, it is better to be familiar with the future trends as one can cope with it. According to the State of Fashion Report, co-published by McKinsey & Company and Business of Fashion, far-sighted companies will make bold moves in automation and AI, and will disrupt themselves before others do it for them. The report also revealed that consumers would make or break brands based on trust. And global economic and political trends hover over the whole picture. Amid what McKinsey has dubbed the ‘year of awakening’ for the fashion industry. The report has focused on 10 key trends that will define the fashion agenda in 2019: 10 key trends that will define the fashion agenda in 2019 Caution Ahead Indian Ascent Trade 2.0 End of Ownership Getting Woke Now or Never Radical Transparency Self-Disrupt Digital Landgrab On Demand Caution ahead: McKinsey said, “A potential turn in the economic cycle is prompting concern among industry executives over prospects for the coming year. Following a prolonged period of growth and rising costs, strategic priorities for the subsequent period are likely to focus more on being nimble and boosting productivity.”Firstly, the uncertainty that plagued 2018 when it came to things like global trade and tariffs, could dampen global economic growth in the year ahead.Already, global growth is showing signs of plateau after averaging above 2.5 percent since the financial crisis, U.S. interest rates are rising, increasing the cost of borrowing money for both companies and consumers, and Europe could see a tightening of the monetary policy, which might lead to slower economic growth.Executives surveyed for the State of Fashion report pointed to economic conditions as the third biggest trend for 2019, and 42 percent expect industry conditions will worsen next year. Indian ascent: According to the report, “India is increasingly a focal point for the fashion industry, reflecting a rapidly growing middle-class and increasingly powerful manufacturing sector. These, together with strong economic fundamentals and growing tech-savvy, make India too important for international brands to ignore.”Growth and expansion have been positive in Asia and India will be at the center of it all in 2019. Economic growth in India is expected at 8 percent a year between 2018 and 2022, while the country’s middle class is forecast to expand 19.4 percent, outpacing that of China, Mexico, and Brazil. Trade 2.0: Actions on the part of the United States as it related to trade in 2018 served to increase tensions, costs, and disruption.McKinsey said, “Companies should make contingency plans for a potential shake-up of global value chains. The apparel trade could be reshaped by new barriers, trade tensions, and uncertainty. However, there may also be new opportunities from growing South-South trade and the renegotiation of trade agreements.”Beyond that, there’s been a bright spot in the Global South, or the Developing World. Trade within the region is expected to increase from roughly 25 percent of global trade at present to closer to 30 percent by 2030, McKinsey noted. China’s One Belt, One Road initiative may be the impetus behind much of the growth.McKinsey noted, “The axes of global trade are shifting, amid a surge in commerce between emerging economies in the Global South. The dynamics may lead to a rethink of sourcing and pricing strategies in the year ahead.” End of ownership: Today’s consumers want fashion product that’s interesting, readily available, sustainable and affordable—and many have been turning to resale and rental to have those needs met, a trend that’s expected to continue.“The lifespan of fashion products is being stretched as pre-owned, refurbished, repaired and rental business models continue to evolve. Across many categories, consumers have demonstrated an appetite to shift away from traditional ownership to newer ways in which to access product.” McKinsey explained. Getting woke: The young population of consumers, millennials and particularly Gen Z, want to know they’re buying from brands that stand for something.Nine in ten Generation Z consumers believe companies have a responsibility to address environmental and social issues. And because millennials and Gen Z, together, account for roughly $350 billion in spending power in the U.S. alone ($150 billion spent by Gen Z and $200 billion by millennials) and Gen Z alone will account for 40 percent of global consumers by 2020.McKinsey said, “Younger consumers are seriously concerned with social and environmental causes, which many regards as being the defining issues of our time. They increasingly back their beliefs with their shopping habits, favoring brands that are aligned with their values and avoiding those that don’t.” Now or never: According to McKinsey, 2019 will be the year the majority of fashion players integrate commerce functionality into social media, as well as the year visual recognition tools will integrate into day-to-day shopping for the average consumer.“The time lag between discovery and purchase is a pain-point for customers who continue to expect better experiences. Companies are increasingly focusing on reducing this source of friction and launching new technologies to enable a smooth and speedy transition from inspiration to the acquisition.” McKinsey said. Radical transparency: Just as consumers are starting to seek greater transparency, ongoing data breaches at apparel companies have fueled a rising distrust that brands and retailers will need to counter.To do it, they’ll need to ramp up transparency, in many cases, as McKinsey explained, by specifying costs of materials, labor, transport, duties, and mark-up—a level of ‘radical’ transparency that has helped fuel success for companies like Everlane.“Fashion companies must come to terms with the fact that a more distrusting consumer expects full transparency across the value chain,” McKinsey said. “Given the need to regain that trust, fashion players cannot afford not to examine long-standing practices across their businesses.” Self-disrupt: Disruption has become a tired refrain, as those not doing it—or evolving as a result of it—have already been left behind.Self-disruption, in particular, will be a focus for 2019 as 79 percent of executives surveyed for the report put it among the top five trends impacting the textile and apparel industry.“Technology and social media are enabling a new breed of ‘challenger’ brands that disrupt a sector or category where incumbent players have rested on their laurels,” McKinsey said. “Meanwhile, to compete and stay relevant among demanding young consumers, traditional brands are echoing this dynamic and disrupting their own brands, offerings, and business models.” Digital landgrab: Simply selling apparel online won’t suffice in a world where everyone is doing much the same thing. Companies will need to differentiate themselves on “emotion and trust,” according to McKinsey.“As the race to be the platform of choice for both customers and fashion companies intensifies, e-commerce players will continue to innovate by adding profitable value-added services and focusing on new technologies,” McKinsey said. “Whether through acquisitions, investments or internal R&D, players that diversify their ecosystem will strengthen their lead over those remaining pure players who rely solely on retail margins and existing offerings.” On-demand: Brands and retailers can no longer afford for design to be the long, drawn-out process it always was. Now, they need to tap into technology, analytics and nearshoring to shorten that whole development timeline, and 2019 will see more companies step up to deliver on on-demand as many a startup in the space has already done.“Automation and data analytics have enabled a new breed of start-ups to adopt agile made-to-order production cycles. Mass-market players will begin to follow suit, aiming to respond more rapidly to trends and consumer demand,” McKinsey said. “The result is likely to be a rise in just-in-time production, reduced levels of overstock and the rising importance of small-batch production cycles.” To know more info please visit: www.mckinsey.com

[georgettebaker4569]

The Sourcing Market is on the Up and Up: Everest Group Reports Rise in Global Outsourcing Demand, GIC Activity and Service Provider Revenues in Q2 2018 | Press Release

Sourcing center setups at all-time high in Q2, driven by increased location activity in Nearshore Europe, Middle East

The global sourcing industry experienced a lucrative Q2 2018, marking notable rises in outsourcing demand, setups of global in-house centers (GICs) and service provider revenues compared to Q1, according to Everest Group. In addition, Everest Group reports that overall location activity was at an all-time high (87 setups of delivery centers by GICs and service providers during the quarter) due to significant increases in Central and Eastern Europe (CEE) and the Middle East.

Everest Group discusses these and other second-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2018 report. The quarterly report highlights the trends in the fast-evolving global sourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities, and service provider developments.

“We’re coming off a great second quarter for the global services industry as a whole,” said Salil Dani, vice president at Everest Group. “For starters, location activity was at an all-time high and transaction activity rose in comparison to Q1. More than two dozen of the world’s leading companies announced plans to expand or set up new centers, which is a strong indication that enterprises anticipate that the market will continue to validate their sourcing strategies in the near future. We expect that this positive momentum will continue through the remainder of the year, which suggests the global sourcing industry will post significantly improved metrics compared to 2017.”

***Register for Complimentary Webinar***

Everest Group will review the findings of the “Market Vista: Q3 2018” report in a webinar to be held on Wednesday, August 29, at 9 am CDT. In addition, Everest Group presenters will address the results of a brief survey the firm recently conducted with leading service providers to gauge their market perspectives for the remainder of 2018 and into 2019. Register here for the complimentary, 60-minute webinar, “Service Provider Vantage Point, Plus Q3 2018 Market Vista™ Briefing.”

Additional highlights from the Market Vista: Q3 2018 report:

There was an uptick in outsourcing deals in the Banking, Financial Services and Insurance (BFSI) vertical, driven by U.S. tax reforms. Healthcare outsourcing transactions also surged, driven by declining enterprise margins.

Outsourcing activity across North America and Rest of the World (especially Asia, Australia and New Zealand) increased notably over the last quarter.

The “Technology and Communication” sector remained the most active and accounted for more than one-third of the total market activity in Q2. The manufacturing sector witnessed an increase, accounting for 25 percent of total setups as compared to 18 percent in the previous quarter.

Digital services continued to dominate the outsourcing activity relative to pure traditional services, representing 61 percent of transactions compared to 39 percent, respectively. Automation was the most prevalent digital component employed by new or expanded GICs, with deployments in 52 percent of Q2 setups and expansions.

Tier-2/3 locations in the U.S. witnessed significant growth in new center setup activity for both transactional and transformational work, driven by low-cost skilled talent availability.

CEE accounted for more than one-third of the total GIC setups and expansions, with Ireland and Romania remaining the preferred nearshore locations in the region.

Middle East and Africa (MEA) gained traction during the quarter, accounting for nearly 10 percent of the total GIC setup and expansion activity. The majority of the centers that opened in this quarter in this region support R&D/engineering functions of the parent company.

Both global and offshore-heritage service providers saw an increase in revenue and operating margin.

Service providers point to a gap in digital skills as a key growth challenge and are utilizing multiple approaches, including alliances and acquisitions, and exploring talent models to mitigate risk.

***Download a complimentary 14-page abstract of the report findings here.*** (Registration required.)

The post The Sourcing Market is on the Up and Up: Everest Group Reports Rise in Global Outsourcing Demand, GIC Activity and Service Provider Revenues in Q2 2018 | Press Release appeared first on Everest Group.

from pesonivt2a https://www.everestgrp.com/2018-08-sourcing-market-everest-group-reports-rise-global-outsourcing-demand-gic-activity-service-provider-revenues-q2-2018-press-release-46463.html/ via http://www.rssmix.com/

[angelikabozh]

New Post has been published on https://www.nearshoring-info.ch/what-is-nearshoring/

What Is Nearshoring?

It’s no secret that in order to achieve the most effective result, you need to know the essence. Before starting the process of nearshoring collaboration, it is important to know all the details. And it’s best to start with a definition. Cyril Samovskiy, Mobilunity CEO, answers this and many other questions regarding nearshoring in the full version of this interview, which is available on this page.

What is the definition of nearshoring?

Alfie: Do you believe it is possible or necessary to train the clients to understand what nearshoring is? What would be your definition of nearshoring?

Cyril: Nearshoring, opposite to offshoring, is an ability or model when a client is utilizing the best of the country’s and market’s potential nearby to their domestic market. I’m not willing to put an emphasis or focus purely on the labor market, because nearshoring models may vary and the engagement models may differ: project-based, R&D center, dedicated team, or something else. Nearshoring just widens the borders around the country or some union, as the European Union, making it possible to collaborate, to build partnership with the countries nearby, who are more or less of a similar mentality and, which is very important, not too far from the distance perspective and time zones. This would be probably my more or less formal definition. Maybe too wordy one, but still this is something that we put under the “nearshoring” term.

Nearshoring, opposite to offshoring, is an ability or model when a client is utilizing the best of the country’s and market’s potential nearby to their domestic market.

[angelikabozh]

New Post has been published on https://www.nearshoring-info.ch/learn-about-nearshoring/

Best Way to Learn about Nearshoring

Cyril Samovskiy, Mobilunity CEO, tells why and how to start learning about nearshoring. Why it is so important for a client to learn more about nearshoring collaboration – this and much more you can also find out in the full version of this interview following next blog post.

  Alfie: Where would you say is a good place to start learning about nearshoring? Do you have things that you post or present? Is it some platform? What would you say is the best way to learn about it? 

Cyril: I can immediately mention that probably one of the most trustworthy sources for information are peers around every business. We are certain that in Europe specifically, if you ask your peers about their experience with nearshoring, I can be giving you a like a 90% guarantee, that most likely there was somebody, who already has an experience like that. These little stories may be initially incomplete or they may be something too radical or too straight. These things, if they are being asked one by one and not otherwise get involved altogether, may be a little bit confusing, but once you get 3-4  opinions from the peers around you, I’m pretty sure that you would understand that there are things not worth doing. Then it comes to to choosing the model and the vendors, who are capable providing such models like outsourcing, outstaffing, dedicated teams, managed teams, freelancers, R&D centers then, of course, you start reading a little bit of blogs, but the most blogs are still written by the people who are whether trying the services or who are actually providing them. And then it comes to a choice of a couple of vendors, who might be on your shortlist, who you think are a fit from just the visual perspective, you explore their website, you see what they are writing about, what they’re telling and things like that. Talking to these people would ideally bring any potential client or person interested to a point whether when the person realizes that all models are not for them now, or the end point, when the potential client needs to define what’s the most important to them now. Such tips, such tricks, such methodologies are probably the same in every industry. That’s why I’d like to say it wasn’t a question, that is easy to answer. On other hand, if I would go for any service, I’d probably do the same. 

There are also people, who are in this industry, who are not prompting you to buy from them right away, they are just sharing a little bit of insight: your show probably would be one of such sources, my LinkedIn could be one of such service, my blog on some platform might be such a source,  the webinars some Polish company might be doing could be such source of information. Just a matter of how much time you might be willing to devote to getting prepared to this kind of analysis and conclusions. But I think overall that the structure of the approach would be probably like this.

[angelikabozh]

New Post has been published on https://www.nearshoring-info.ch/inside-nearshoring-online-show-pilot/

Inside Nearshoring Online Show Pilot - Interview with Cyril Samovskiy, Mobilunity CEO

Alfie: Welcome to “Inside Nearshoring” with me, Alfie and welcome Cyril, our guest. So I think what we’ll do is just to get everybody acclimated and we all know who we’re talking to I’d love for you to tell our viewers a little bit more about, you know, who you are, what you do and why this “Inside Nearshoring” episode is important to you.

Cyril: Thank you. So to be quite brief, I guess, I’m Cyril [kiril] or in the French part of Switzerland and in France – Cyril [ˈsɪrəl]. I’m the CEO and founder of Mobilunity, a Ukrainian-based company providing nearshore development services. Our primary focus and our primary service are providing dedicated development teams, and this is what we have been doing for the past four years.  The company itself is approximately 200 people now and, aside of my primary duty of actually leading the company, of course, I’m applying my best effort in regards to promoting the full nearshoring idea to our potential European markets and/or, as the people say in Israel or Japan – offshoring it is, whatever.

Alfie: Awesome! So, as you mentioned, this is all about going inside and showing people things that maybe they wouldn’t have known years ago. Unless they had already tried nearshore, or unless they were industry insiders. So with that being said, with the current situation, with COVID-19 pandemic, do you believe that this topic is something people should just wait until the pandemic is over?

Cyril: I cannot advise people, because I’m biased, but what we can be fairly stated is that we see an increase of interest to what we are doing now. And the reason behind this is quite obvious and natural. The people are no longer working in offices and somehow working with remote people. Of course, right now after maybe one or two months of lockdown at homes and home offices, the majority of companies are still working with the developers, the teams that they were hiring in offline mode, they know each other well and such conditions and circumstances put a little bit of constraint over the model overall. But if you think what may happen in six months from now, maybe in the year, if the world is really changing towards the same direction: we’ll be hiring people staying remote, we’ll be assessing them remotely, we’ll be judging on their soft skills and hard skills all staying in remote and if it’s all remote, then why limiting yourself to something that you have locally in your city or in your country. We see people are coming out more and more just to inquire, just to ask the questions about how exactly this can be organized and whether or not such experience will be smooth for them. Maybe sometimes they come over even just to hear how exactly we’re managing our business. Because the core of it is still like working with remote development teams and this is what we have been doing for the past four or five years. The companies who try this now get lots of challenges, lots of new things happening to that. But I think the answer to your question would be of course the readiness of the company, the scope, and domain where they operate. But down the road, the borders will be less meaningful and significant to hiring the right people. And this is what we believe.

Alfie: You said “scope and domain”. With that being said, who needs nearshoring? Is it industry-specific? Are there industries, which you, as a business owner, would say “I’m not going to touch that” when it comes to nearshore or is it pretty much everything? Could you please just give some insight into that process and into how things work?

Cyril: I can say there are some specific domains or industries or verticals, as we say, that are easier than others are applicable to the nearshoring model. For e-commerce, this is a considerably easier topic than for banking. Just because of obvious compliance, security legislation and all the questions like this. But even looking at our 40-plus clients now, we’re quite represented in very various industries. We have insurtech, we have insurance, we have fintech, we have a few banks, we have e-commerce, we have small businesses, we have startups where have hardware and software companies – we have so many domains all in one model, so it seems there is no specific industry, which would benefit the most. We have a number of cases when different sectors, different domains, even security-sensitive domains, are still utilizing the most of what nearshoring or offshoring can provide. We have Israeli companies handling the security for the local domestic market and internationally, while also having their teams in Ukraine. That probably means that there are no restrictions, there are just right and wrong ways of doing nearshoring or offshoring. And this is the matter of how the business will approach and consider the opportunity, and how they will be implementing this challenge for themselves.

Alfie: You’ve mentioned “rights and wrongs” of nearshoring. I tend to believe that in most things, not just nearshoring, that a lot comes down to education and if you know what to do. Do you believe it is possible or necessary to train the clients to understand what nearshoring is? What would be your definition of nearshoring?

Cyril: Nearshoring, opposite to offshoring, is an ability or model when a client is utilizing the best of the country’s and market’s potential nearby to their domestic market. I’m not willing to put an emphasis or focus purely on the labor market, because nearshoring models may vary and the engagement models may differ: project-based, R&D center, dedicated team, or something else. Nearshoring just widens the borders around the country or some union, as the European Union, making it possible to collaborate, to build a partnership with the countries nearby, who are more or less of a similar mentality and, which is very important, not too far from the distance perspective and time zones. This would be probably my more or less formal definition. Maybe too wordy one, but still this is something that we put under the “nearshoring” term.

Alfie: When it comes to your current clientele and what you’ve been building, what would you say is the hardest part about what you do? What’s the most difficult thing about being a supplier? Because obviously, I would assume that the hardest thing about being a client is picking a provider, right? But what’s the hardest thing about being a provider?

Cyril: I think, and you touched upon this when asking your previous question, it is a challenge for us as a supplier or a vendor to convince our clients to listen to us or to trust us. Clients may be coming because their market is very much limited, or they need to be able to scale up or down very fast, or they are seeking for specific technology talent that is not as available to them on the market or else. But the thing is once they come to a vendor, like ourselves, they have to be hearing and listening to what we advise. We’re never making the decisions on behalf of our clients, but we are very proactive in our intent to be sharing what we already know. Because otherwise, if we are not accumulating this experience from previous years of ours and from knowing hundreds of clients that we have been working with, then what would be our value that we charge money for. So, there is a good percentage of clients, who are sure that they need nearshoring services, who are certain about Ukraine and Mobilunity as a company, but then, when they come to us, they stop listening to us. They may be doing their own things just because it fits into their process or things that were common for them in other destinations like Asia. The thing is that we want to be heard and we are applying our best effort in our intent to be explaining and proving that our expertise often is of a big need and value to our clients. This is a challenging part, maybe even the most complex if there is full trust between the companies. And that doesn’t mean that we, as a provider, are always right. We are never telling a client how to act. We are bringing up the knowledge, the risks, the best practices, the cases we used to have and we provide the recommendations of the same. The decision will be still on the client, but if this decision is made with the educated mind, that will probably be the best way of utilizing our model, our expertise and our service.

Alfie: When we talk about education, where would you say is a good place to start learning about nearshoring? Do you have things that you post or present? Is it some platform? What would you say is the best way to learn about it?

Cyril: I can immediately mention that probably one of the most trustworthy sources for information are peers around every business. We are certain that in Europe specifically if you ask your peers about their experience with nearshoring, I can be giving you a like a 90% guarantee, that most likely there was somebody, who already has an experience like that. These little stories may be initially incomplete or they may be something too radical or too straight. These things, if they are being asked one by one and not otherwise get involved altogether, may be a little bit confusing, but once you get 3-4  opinions from the peers around you, I’m pretty sure that you would understand that there are things not worth doing. Then it comes to to choosing the model and the vendors, who are capable providing such models like outsourcing, outstaffing, dedicated teams, managed teams, freelancers, R&D centers then, of course, you start reading a few blogs, but the most blogs are still written by the people who are whether trying the services or who are actually providing them. And then it comes to a choice of a couple of vendors, who might be on your shortlist, who you think are a fit from just the visual perspective, you explore their website, you see what they are writing about, what they’re telling and things like that. Talking to these people would ideally bring any potential client or person interested to a point whether when the person realizes that all models are not for them now, or the endpoint when the potential client needs to define what’s the most important to them now. Such tips, such tricks, such methodologies are probably the same in every industry. That’s why I’d like to say it wasn’t a question, that is easy to answer. On the other hand, if I would go for any service, I’d probably do the same.

There are also people, who are in this industry, who are not prompting you to buy from them right away, they are just sharing a little bit of insight: your show probably would be one of such sources, my LinkedIn could be one of such service, my blog on some platform might be such a source,  the webinars some Polish company might be doing could be such source of information. Just a matter of how much time you might be willing to devote to getting prepared for this kind of analysis and conclusions. But I think overall that the structure of the approach would be probably like this.

Alfie: You’ve mentioned a few things that I want to touch on at least. I heard the term “freelancer”. I know that a lot of people would be asking what’s the difference between me paying somebody directly and me dealing with this company. Could you give us a bit more information why not use a freelancer and is nearshoring and freelancing the same thing?

Cyril: Firstly, I wouldn’t advise not to use freelancers. Even to clients of ours, if they come over and they are hesitant, we tend to be asking some questions to understand if they really need a vendor or maybe the freelancing model might be a fit for them. When it comes to freelancers, I think the most tricky part is that you deal with the individuals, not the company, and the liability and responsibility would be exactly the same as the model operates. If you are working with a freelancer, you may be very lucky in getting an amazing person and you would be happy not to be paying any extras to a vendor between your company and the actual executor, the freelancer. On the other hand, the freelancer himself might be in a good need for some environment or some process that we, as the vendor and supplier, are providing. In this case, the freelancer for some companies in some models might be more effective within our ecosystem, than working directly. On the other hand, maybe the company, who comes to us, as a vendor, wants to ensure intellectual property handling, for example, or they want to ensure there is proper tracking of what is actually happening on the freelancer side without screen capturing or things like that, but they still want to be ensuring that this freelancer is physically at his desk, if it’s in the office or is reporting in details on what exactly was done or maybe they would like to do their code commits twice a day, for example. It all comes from the perspective of what the client might be willing to get and willing to receive as a service. Because if the service is just a person who sits somewhere and does some job, a freelancer might be perfect. But what happens, if a freelancer gets sick, if a freelancer needs more money, but the wage doesn’t allow him to earn more money? What happens, if some richer client comes over to this freelancer and proposes a little bit higher pay or maybe a more interesting project? Will the client suffer from this kind of risk, or if a freelancer decides to leave and what would a vendor, like ourselves, do on such matters? We were designed the way to be taking care of three parts of what we say are 3 parts of nearshoring: relationships with a client, retention of the developers and recruiting for the developers for the new team and as it is. We provide the service with this specific value, so comparing us to freelancers, the potential client needs to keep in mind whether or not they are in need for these specific items that they are offering. And they’ve got to be asking their potential vendor, why would I work with you and not with the freelancers. If the vendor is not prepared to answer, I think you need another vendor or you need freelancers.

Alfie: You’ve mentioned your 3R’s. Those are: relationships, retention and recruitment. Out of those 3, which is the most difficult to maintain?

Cyril: I cannot choose any, to be honest, because I think that they all are very much important. I can say purely from my personal perspective: I can say that the relationship part is something that I am myself investing both of my efforts into just because I have very good people in charge of the other two. And on the relationships part, I’m still at the front of the company. I still need to be on the very edge of this and to be representing the company together with my Partner of Business Development.

Alfie: I suppose from that point of view we gave a good idea of the kind of processes that go into place. How about you share with us what would you say would be an example of a bad experience that you’ve had? As a business owner, as a supplier.

Cyril: I can recall a couple of cases like this, but oddly enough the example that I would be willing to share now is not about the biggest clients of ours. It’s just about the client, who stepped into this relationship with us, as a supplier, without clear understanding of why they do it. It was quite a big company that had a product and they decided to go nearshoring. They did a big job in search for the potential vendors, they chose us, they were very right at the engagement part, when we were ensuring that this is the right client for our developers, this is the right client to be running the long-lasting relationship. But then, when the job actually started, some weird things started happening. There was lack of communication, there was lack of feedback, there was no direction given to the actual team of ours, there was no attention to important things to us, as a vendor, and to the development team, who we hired for them. So it was just a weird understanding, by our side of course, that we are somehow already in this relationship with this client, we are willing to help, but we are not being heard, we are not being to be talking on these matters, to be advising something that would be very much important for the client to actually survive or to be successful with this remote team. It all lasted for approximately 5 months when they literally paid for the service that they were not receiving in full. Because whatever we were telling them wasn’t hurt, whatever we were sending them wasn’t read, whatever we asked them was not followed up. 4 or 5 months have passed and somewhere in between they had to cut the team, they had to cut relationships with us and they left unhappy, just because they were expecting something else. We were very much upfront honest with what we are providing, how this works and what kind of time investment it requires, not speaking of financial investments. We were very much transparent, but it wasn’t taken this way, unfortunately. Maybe due to some gaps on our side as well, as I don’t know one of the sides. But probably that was the case that I would be giving here, stressing out that it is very much important to any vendor, who wants to do their job good, to be in full communication and in full trust with the client of theirs.

Alfie: With Mobilunity clients, who are from around the globe, how do you manage that when it comes to language and time difference? Because you’re dealing with different countries, different cultures and belief systems.

Cyril: I agree it is the challenge for us and I agree that would be easier for us and for the teams to be working with somebody in the standard meaning of “nearshoring”? If it’s Switzerland, or Germany, or France, or the UK, or Norway, Sweden we’re 2-3 hours flight, 1 or maximum 2 hours time difference – that’s easy. When it comes to further markets, North America or Asia, it is different from the process organization point of view. The client is not present during the time when the team is operating – we are getting our clients prepared for this, we are stressing it on a few points, which are very much crucial to these long-distance clients of ours. We explain the essence of proper planning, we advise the way to organize the process with the remote team, when the remote team gets any questions, what they are supposed to be doing until they get the answers. Just because the answer from North America or maybe from Asia may be coming in just the next day or in two days.

Language-wise with North America, it’s still easy because every developer of ours communicates in English. When the skill is not enough, we’re giving the classes and doing all the possible tutoring on-site of our office to ensure that in-person communication is in line with what the client is expecting. With a glance from Asia, it is more complicated, just because English is less used there in the business environment and in common life, we find the solutions: we are sometimes providing a communications manager knowing the language of that country to be bridging what’s in between the headquarters somewhere in Japan or South Korea or elsewhere, and our engineer here, who is just talking English, for example.

If it’s a time difference, like I mentioned with America, it’s one size difference, with Asia that would be another size difference. Asian countries are way ahead of the Ukrainian time zone and we got to be starting a little bit sooner in the morning. This comes to recruitment when we know exactly what to expect from a client from Tokyo or South Korea or elsewhere.

These points are all important to us. We are putting a significant effort into ensuring that we are capable of providing the service that the clients will appreciate. Otherwise, it is to us and to the client that would be loss of time and loss of money to step into a relationship that does not have good chances to actually prevail.

Alfie: So you’re in the middle, where you are geographically – you’re in the middle of both of all time zones.

Cyril: Yes, talking of South Korea or Japan, for example, the developer may be starting at 8 AM and we still have 2-4 hours of simultaneous work with the Japanese colleagues of ours. If it’s America, then the teams are advised to be starting later, 11-12 AM or later. And to those people, who we hire, who prefer this kind of day schedule, of course, it’s also a benefit to be working on projects like this and we still provision an ability to the headquarters to be intersecting their teams for a significant period of time for at least 2-3 hours to be able to manage the process on a daily basis.

Alfie: If you had to choose another country to nearshore to, where would it be?

Cyril: I would say Poland. And the reason behind this is that: first, I used to work with Poles, these are good developers, guaranteed and second, they understand Ukrainians very well. They have alike motivation, they have alike approaches, they have alike levels, so I can see that that could be Poland.

On the other hand, Ukraine has lower “brain drain” problems than Poland does. Just because Poland is part of the European Union, where people are free to migrate and work in any EU country. Those Ukrainians, who wanted to get permission to work in the European Union, have already undertaken all the procedures and made their complex decision to go for some long-lasting contract in the EU and they’re already there. Everyone else in Ukraine is not in active search for some opportunities in Europe. They want to stay in Ukraine just because the way they earn and what they can afford in Ukraine – that’s a good life, they really are in the top percentage of people in Ukraine, who, as an industry, really earn very well. And those who stay here, obviously there is nothing as a competition between working for some Ukrainian company or going elsewhere like in Germany, France, Poland. So this is probably the most and the biggest advantage of choosing Ukraine over Poland or another EU country.

Alfie: Here’s one more thing, now that we’re dealing with COVID-19, what would you hope to take positively out of this experience out of dealing with COVID-19? What would you hope to take out of this experience?

Cyril: Two parts of my answer: first, I want to give a little bit of insight from Ukrainian only the situation. So, Ukraine overall (we are not taking IT industry into mind) is not too computer-literate nation. I am not speaking of developers,  developers are very cool. But with the COVID thing with the crisis that hit us immediately, I see such growth from people, who are way far from computers, from the internet, something that happens there. I see these people are now using the conferencing tools, they’re using the word processors, they’re using spreadsheets, they’re using a full set of tools that was kind of a mystery for them like three months ago literally. Three months ago it was just a no-go. I see the offline businesses building up the e-commerce shops or some representation on the Internet in a way that it also speaks for their maturity. If I saw this 3 months ago, I wouldn’t even believe it. And I see the biggest take from these scary times for Ukraine specifically is that the whole nation and all the people are now way more comfortable in operating internet, remote things, remote collaboration, some platforms that are providing different accesses to different assets. Speaking of the whole world, I’ll probably say exactly the same, but with a different idea behind it, I would hope that after the COVID-19 crisis is gone and we’re all back to normal life, we still remember these times, when first, we needed to remember how meaningful and significant in the life collaboration is. Second, we saw all that remote work can be as good, as the office work and with this in mind, it waives the borders of minds, of mentalities, of philosophies to businesses who are now more capable of bringing on more alternatives. I am not pushing for our model specifically, I’m just saying that with the conditions we all got in during this crisis, we can be learning lots of very nice things and then utilizing them all time afterwards or lifetime.

Alfie: So, we have a couple of questions just from the internet, which I am going to ask. The first question: is Ukraine safe?

Cyril:  I’m very biased. I could be answering “yes, it is”, but nobody would trust me, because I’m Ukrainian. So if you don’t mind, I could just round it back to you as an expat, as an American who lives in Ukraine for 6 years.

Alfie: I would say that Ukraine is a place where, just like any big city, obviously, there has been some bad press in recent years. However, nowadays everyone’s getting bad press, so I have always said that when it comes to Ukraine, it’s a place where you can feel uncomfortable, especially as an expat, but you don’t feel unsafe. And I think a lot of it has to do with the media’s portrayal not having a clear understanding of what is actually going on. So, things like that really can hurt the perception, but overall it looks like any big city, just like if you were in the USA, New York or DC minus the guns. So, I think that Ukraine overall is safe.

Cyril: I also see lots of expats working for different companies, especially in IT here. Of course, there is a press pressure and what happens on our East and on our South – these are known serious problems to us, as a nation and of course we are certain that sooner or later, hopefully, sooner, we’ll get all the lands back and will be a full single country. But, speaking of the safety of being present in any big city of Ukraine, that Ukraine now keeps control over, it is a safe common life. COVID-19 has now hit Ukraine slightly less than the countries in the European Union and of course the USA. The people are moving freely, people are talking English, not everyone does, but when they don’t understand, they at least smile, and they say “yeah, sure”, but all in Ukrainian and then they’re trying to assist somehow. So, I am using this opportunity to welcome everyone to come to Kyiv, Ukraine, to see yourself that it is safe, it is very nice and it gets amazing people here.

Alfie: And here’s another question I have: what team size is good for nearshoring?

Cyril: That’s part of our internal discussions and belief, but we think that when the business comes for one or two developers, it can be bringing value to the client, but usually it’s the best start. To get real value from nearshoring you would hope in an ideal scenario of course like there are many of these scenarios where the specific need implies the size of one or two developers, but, generally speaking, the teams of five to ten people are bringing the most of what nearshoring model may be giving you. Cost inclusive, because on the team size like this you would also feel it on the cost amounts as well.

Alfie: Here’s another one: is there a difference in developers from Kyiv versus other cities in Ukraine?

Cyril: I cannot say there is a difference between developers, who grew up in Kyiv or other cities. We can be reflecting over the quality of education or experience these people could have. Speaking of Kyiv and other cities, I can just operate the numbers and I am stating that Kyiv as one city has approximately 40% of all developers in Ukraine, which means that every other city would be having fewer developers. And if there are fewer developers, then fewer companies will be coming to this specific city. And if there is a limited number of companies, then the experience these developers can be gaining is slightly lower than they could be getting in Kyiv. Just because in Kyiv there is a bigger competition for this bigger number of developers from a bigger number of companies.

And the second part is that the companies usually, if they do not have some story with some smaller city or town in Ukraine, they usually start with the capital, the biggest city, just because the variety of developers is bigger here.  The competition is in place, so you would need to convince the developers to accept your offer, but we tend to believe that in Kyiv there is a bigger choice, more people are willing to move to Kyiv from other cities, than moving from Kyiv to other cities and towns. So, it all makes little things that make matter during the location selection. There might be some advantages, for example, I can say that in Kyiv the salaries are considered to be higher than in other towns. I’m not saying how much higher they are: a little bit higher here, significantly higher than there, but, as the capital city, it has a cost of living and the people are also expecting better wages. But it is not as drastically jumping from zero to dozens of zeros.

Alfie: What’s the biggest demand you get from developers?

Cyril: I can think of many, I’m not sure I can be saying it’s the biggest one, but I would split all our developers that we have and those, who were considering Mobilunity as their employer, into little groups so to say:

To one group it is very much important that the office is exactly in this neighborhood. Just because they hate using public transport and it will matter a lot now with the COVID times. Once we are back to the office, they don’t want to be risking or they don’t want to be on public transport for more than 15 minutes, for example.

Another group of people are driving the cars themselves and they enjoy car driving. They would want the big cars to be somewhere parked in a safe and secure place. So, parking in a downtown, where they are now, might be a problem for many companies, just because there is no space like in every big metropolis, there is no space downtown to park. We are lucky and happy to be able to produce that. But again, it matters not to everyone.

Others may say they hate open spaces, they want to be given some intimacy with their colleagues from the same team or maybe beyond the offices. We’re like 6-8, maybe 10 people maximum, but it’s not an open space, where there are a hundred of people or two hundreds of people. And it may matter to some of them.

Many would ask more about the client and of course, these are very important questions. The initial items I named may be considered as something that, as a package, as a benefits package, that we are proposing. But understanding what domain the client is working in, what stack of technologies they are using and what a working process they’re utilizing – these three items would probably be the most crucial and important for our recruiting team to be able to find the right talent and developers got to be asking these questions. Because otherwise,  they’re just probably seeking a paycheck or maybe they’re just willing to be part of our company. We shall be of course happy with, but typically these questions are the most important and these are the demands from the developers to come:

What technology will be?

Who will I work with?

What kind of control will I have?

What kind of assistance will I have from the headquarters?

Will I be working with a local project manager or I’ll be working with the Japanese project manager?

What language will I use?

What time am I supposed to be at work to be interacting with this specific client?

What kind of tracking tool will I be using the JIRA or Redmine or Trello or whatever?

Alfie: So basically the days of just having a developer with a computer, brand bag and free coffee are over.

Cyril: Not only over, but we find more and more Senior people not caring for these. They care about the clients, product, project and process and they care less of everything else. They need their hardware, that’s obvious – it must be a modern one, very fast, so it doesn’t put the constraints over the performance of a developer, brand bags (we have a couple of them), but really not a deal-breaker to any of the developers that we used to talk to.

Alfie: I’ll end it on this last one: what is the first thing you’re going to do once the quarantine has been lifted?

Cyril: I’m dreaming of a big party because I’m missing those. We have a tradition in Mobilunity of monthly gatherings. I wanted to say pizza parties, but sometimes we serve not pizza, but something else. Once a month we have a little agenda of what I could be talking about, the whole thing about, and we have some fun over there. So, people get together, they are happy to see new faces of those who just joined the company. They are happy seeing people from other floors, they are happy to hang out with the beer or with non-alcohol drinks. They are happy to have an ability to interact with each other and so much happy am I. Just because I’m missing these gatherings a lot and I would want to have a conversation with each and every of our guys and girls about how this period of time was, when they were remote, and how easy was that how good the collaboration with the teammates, etc. Of course, we have these meetings now, they are all in the remote mode and using the conferencing tools and our resource management team can tell me all these questions and then run these little chats with pretty much every team that we are having, but this is just different in any way. That would be awesome and pretty sure about that and I’m pretty sure they’d be the guys they’re dreaming of the same. They want to be relieved from this lock and just to have a little bit of fun all together.

Alfie: I think I’m probably in the same boat on that one with you, just because you want to talk to people, who have a drink and, if you drink at home alone, you feel like an alcoholic. So, you were to see other people and socialize and talk to people but, I think a lot of people are feeling the same way and I’m hoping that we’ll all be able to have a drink together at some point in the near future. So, that’s it for now I want to thank you for joining. We appreciate the insight!

[georgettebaker4569]

Global Services Industry Experiences Modest 5-7% Growth Overall, But Nearshoring, Reshoring, GICs, Digital and Engineering Services Are High-Growth Exceptions—Everest Group | Press Release

Nearshore Europe—fertile with a multi-lingual workforce with complex skills and buoyed by data protection laws—enjoys nearshoring boom driven by enterprises seeking IT, digital services

In the past year, growth of the global services market, which comprises global revenues of US$198 billion, remained modest overall—5 to 7 percent in 2017 as compared to 6 to 8 percent in 2016. However, some key pockets are growing faster than the overall market: nearshore and onshore, in-house models, digital services, and engineering services being key examples, according to Everest Group, which published this week its annual report on the global services locations.

Global services delivery is increasingly being characterized by nearshoring. While Asia Pacific has been the global services location leader in terms of revenue, nearshore geographies, particularly Nearshore Europe, are growing rapidly due to availability of complex skills, increased regulatory oversight and multi-lingual skills. The share of Nearshore Europe in terms of revenue reached 14 to 19 percent in 2017, up from 8 to 13 percent in 2014. Ireland, Poland and Scotland are the top delivery locations, followed by Ukraine, the Czech Republic and Portugal.

Also, reshoring continues to grow amidst the increasing needs for data protection and portfolio optimization. In fact, 52 percent of the setups of the top 20 global service providers were onshore in 2016-2017, as compared to 32 percent in 2012-2013.

“Two more global services trends worthy of note are the shifts we’re seeing in functions and sourcing models,” said Anurag Srivastava, vice president and director of the Global Sourcing practice at Everest Group. “At a functional level, engineering and R&D services and especially IT services dominated the global services industry across all geographies, with Nearshore Europe showing significant growth in this regard. Specifically, the percentage of new center setups in Nearshore Europe for engineering /R&D services jumped from 18 to 25 percent from 2014 to 2017, while the percentage of setups for IT services jumped from 41 percent to 56 percent.

“With respect to sourcing models, global in-house centers are taking center stage, representing US$48-52 billion and employing more than 1.2 million FTEs in 2017,” continued Srivastava. “For the first time since 2014, GICs surpassed service providers in terms of new center setups, accounting for 53 percent of all new center setups. This is being driven primarily by the digital delivery mandates of enterprises, including small and mid-sized enterprises, who are leveraging GICs for digital services such as analytics, social media, mobile, cloud, artificial intelligence, service delivery automation and blockchain.”

Since 2014, the total number of new center setups for digital services (including setups by GICs and service providers) has jumped 105 percent, from 91 in the 2014-2015 period to 187 between 2016 and 2017.

Looking to 2018 and beyond, Everest Group expects the market to remain in flux and offers these predictions:

While revenue growth from traditional IT-BP services remains low, emerging technologies such as cloud and automation should witness significant growth as enterprises look to improve cost savings and productivity.

Profit margins may reduce marginally in the short term, as providers and enterprises increase focus on data protection processes and infrastructure.

The number of full-time employees engaged in delivery of transactional work will grow at a lower rate.

All players in the global services market will increasingly focus on reskilling and upskilling talent across multiple emerging technologies.

Investments in automation technologies will grow, which will have a sustained depressive impact on headcount growth.

APAC will continue to be the largest geography for the global services industry in terms of new center setups due to cost arbitrage and ample talent availability; however, other geographies, such as Nearshore Europe, are expected to grow faster.

Additional research findings and predictions are discussed in “Global Locations Annual Report 2018: Service Delivery Portfolios in a Disrupted World,” a comprehensive guide to understanding the nuances of the global services locations landscape and interpreting locations-related developments. This research offers insights into the size and growth of the global services market, updates of locations activity, changes in risk profiles of locations, and an analysis of the relative maturity, arbitrage and potential of locations for multiple functions.

***Download a complimentary abstract of the report. (registration required)***

The post Global Services Industry Experiences Modest 5-7% Growth Overall, But Nearshoring, Reshoring, GICs, Digital and Engineering Services Are High-Growth Exceptions—Everest Group | Press Release appeared first on Everest Group.

from pesonivt2a https://www.everestgrp.com/2018-06-global-services-industry-experiences-modest-5-7-growth-overall-nearshoring-reshoring-gics-digital-engineering-services-high-growth-exceptions-everest-group-press-release-45583.html/ via http://www.rssmix.com/

[georgettebaker4569]

GICs are Evolving from “Delivery Centers” to “Capability Centers” | Sherpas in Blue Shirts

Historically, companies have leveraged the GIC model to deliver business process (operations) and IT services. However, as the model is maturing and incremental demand for these services is declining, enterprises are increasingly looking to their GICs to build more strategic Research & Development (R&D) and digital capabilities, drive innovation, and focus more on value-added services. In other words, they want their GICs to be “capability centers,” not just “delivery centers.”

There’s clear evidence that this is happening. In 2017, there was a significant increase in set-up of such capability centers focused on R&D and digital skills, especially in areas such as design, innovation, automation, Artificial Intelligence (AI), Machine Learning (ML), and cybersecurity. Indeed, our recently released GIC Annual Report 2018 shows that the share of centers supporting R&D/engineering services – including digital services – increased by almost 150 percent during 2017, as compared to 2016. And these centers accounted for more than 50 percent of total GICs setup in 2017.

These capabilities are expected to be the key differentiators and success drivers for global enterprises going forward. In 2017, ~46 percent of all new centers were focused on developing or expanding digital capabilities for the enterprise. There are multiple examples where offshore/nearshore GICs have been given a global mandate to lead organizational initiatives in new and emerging areas such as automation and blockchain.

So, how exactly are GICs becoming the global capability centers? What are the key enablers? Another of our recent research studies shows that GICs need to take a FORCEful approach:

Foster innovation: GIC leadership needs to invest in developing a customer-centric culture, and test small-scale Proof-Of-Concepts (POCs) to demonstrate end-client value and build credibility

Orchestrate transformation: GICs should leverage their well-established foundation by identifying their core strengths and upshifting the value they deliver through improved operational excellence with productivity enhancements, optimized pyramids, and better managed external spend. Simultaneous focus on leveraging these new capabilities to drive both growth and efficiencies will be critical to deliver true value to the enterprise

Reskill and upskill workforce: GICs must radically change their reskilling/upskilling initiatives to ensure talent readiness for next-generation skills. They also need to adopt a bespoke approach for specific requirements, and undertake pilots in areas with the highest skills gaps to assess the effectiveness and relevance of the capability centers model

Collaborate with ecosystem: GICs should proactively leverage the external ecosystem – specialist providers, startups, educational institutions, etc. – to develop holistic solutions, increase agility, and reduce go-to-market time

Expand existing capabilities: GICs have a unique insider’s view that enables them to provide strategic insights to orchestrate enterprise-wide digital/technological transformation, facilitate integration between IT and operations, and break functional siloes to achieve truly breakthrough results

To learn more about the research behind our FORCEful approach, please click here. And if you’ve already established a capability center, or are in the process of doing so, write to us at Rohitashwa.aggarwal@everestgrp.com or Priyanka.birla@everestgrp.com. We’d love to hear your thoughts and experiences!

The post GICs are Evolving from “Delivery Centers” to “Capability Centers” | Sherpas in Blue Shirts appeared first on Everest Group.

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New center setups in Latin America Reaches All-Time High in Q3—Everest Group | Press Release

As expected, healthcare and IT outsourcing deals fall, service provider operating margins decline

Latin America was one of the bright spots in the global services industry in Q3 2017, with location activity at an all-time high, driven by a large number of new center setups in Mexico, Colombia and Costa Rica, according to Everest Group. Overall, location activity in offshore and nearshore locations marginally decreased in Q3 (350 transactions) compared to Q2 2017 (374 transactions).

Everest Group discusses these and other third-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2017 report.

*** Webinar Playback ***

Everest Group held a webinar on November 14 in which the findings of the “Market Vista: Q3 2017” report were reviewed. The webinar also featured a discussion about the attractiveness and risks of Latin American service delivery. To listen to a playback of “Practical Insights: Tips for Managing and Optimizing Service Delivery in Latin America PLUS a 3rd Quarter Market Vista Update,” click here.

Additional Q3 Trends:

There was an increase in research and development (R&D) center setups by technology and communications enterprises, reflecting their preference to insource next-generation services.

Healthcare outsourcing transaction volume declined due to uncertainty around regulatory changes in the United States.

Revenue increased quarter-to-quarter for offshore heritage providers (3.1 percent) but decreased 0.4 percent for global providers overall.

Operating margins for offshore heritage providers declined due to appreciation of the Indian rupee; operation margins for most global majors declined, reflective of declining revenue.

After reaching an all-time high in Q2 2017 at 49 setups and expansions, Global In-house Center (GIC) activity fell in Q3 to 36 setups and expansions.

The share of tier-2 locations increased compared to tier-1 locations.

ITO deals and application outsourcing services saw a decline.

Among new IT outsourcing deals and GIC center setups, the share of digital services provided increased compared to traditional services provided.

There are significant differences in the leading digital services supported by GICs versus those supported by IT service providers. GICs more commonly provide analytics (41 percent), cloud (24 percent) and cybersecurity (20 percent) services, whereas IT service providers offer primary cloud services (58 percent), followed by analytics (13 percent).

“The third quarter global services demand continued to remain sluggish. While on the outsourcing market, we continued to see increase in share of digital deals, number of new GIC setups marginally reduced after an all-time high in Q2 2017. What is interesting in this quarter is the resurgence of Latin America to support global services delivery to North America, with center setups at an all-time high,” said Salil Dani, vice president at Everest Group.

The Market Vista report highlights the trends in the fast-evolving global offshoring and outsourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities and service provider developments.

***Download a complimentary 12-page abstract of the report findings here.*** (Registration required.)

The post New center setups in Latin America Reaches All-Time High in Q3—Everest Group | Press Release appeared first on Everest Group.

from pesonivt2a https://www.everestgrp.com/2017-11-new-center-setups-latin-america-reaches-time-high-q3-everest-group-press-release-43000.html/ via http://www.rssmix.com/

[georgettebaker4569]

New center setups in Latin America Reaches All-Time High in Q3—Everest Group | Press Release

As expected, healthcare and IT outsourcing deals fall, service provider operating margins decline

Latin America was one of the bright spots in the global services industry in Q3 2017, with location activity at an all-time high, driven by a large number of new center setups in Mexico, Colombia and Costa Rica, according to Everest Group. Overall, location activity in offshore and nearshore locations marginally decreased in Q3 (350 transactions) compared to Q2 2017 (374 transactions).

Everest Group discusses these and other third-quarter developments in the sourcing industry in its recently released Market Vista™: Q3 2017 report.

*** Webinar Playback ***

Everest Group held a webinar on November 14 in which the findings of the “Market Vista: Q3 2017” report were reviewed. The webinar also featured a discussion about the attractiveness and risks of Latin American service delivery. To listen to a playback of “Practical Insights: Tips for Managing and Optimizing Service Delivery in Latin America PLUS a 3rd Quarter Market Vista Update,” click here.

Additional Q3 Trends:

There was an increase in research and development (R&D) center setups by technology and communications enterprises, reflecting their preference to insource next-generation services.

Healthcare outsourcing transaction volume declined due to uncertainty around regulatory changes in the United States.

Revenue increased quarter-to-quarter for offshore heritage providers (3.1 percent) but decreased 0.4 percent for global providers overall.

Operating margins for offshore heritage providers declined due to appreciation of the Indian rupee; operation margins for most global majors declined, reflective of declining revenue.

After reaching an all-time high in Q2 2017 at 49 setups and expansions, Global In-house Center (GIC) activity fell in Q3 to 36 setups and expansions.

The share of tier-2 locations increased compared to tier-1 locations.

ITO deals and application outsourcing services saw a decline.

Among new IT outsourcing deals and GIC center setups, the share of digital services provided increased compared to traditional services provided.

There are significant differences in the leading digital services supported by GICs versus those supported by IT service providers. GICs more commonly provide analytics (41 percent), cloud (24 percent) and cybersecurity (20 percent) services, whereas IT service providers offer primary cloud services (58 percent), followed by analytics (13 percent).

“The third quarter global services demand continued to remain sluggish. While on the outsourcing market, we continued to see increase in share of digital deals, number of new GIC setups marginally reduced after an all-time high in Q2 2017. What is interesting in this quarter is the resurgence of Latin America to support global services delivery to North America, with center setups at an all-time high,” said Salil Dani, vice president at Everest Group.

The Market Vista report highlights the trends in the fast-evolving global offshoring and outsourcing market, exploring the key developments across outsourcing transactions and Global In-house Centers (GICs), as well as location risks and opportunities and service provider developments.

***Download a complimentary 12-page abstract of the report findings here.*** (Registration required.)

The post New center setups in Latin America Reaches All-Time High in Q3—Everest Group | Press Release appeared first on Everest Group.

from pesonivt2a https://www.everestgrp.com/2017-11-new-center-setups-latin-america-reaches-time-high-q3-everest-group-press-release-43000.html/ via http://www.rssmix.com/

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Enterprises Warming to IoT According to Everest Group Research | Press Release

Industrial IoT offers faster return on investment for global service providers striving to meet enterprise demand

Internet of Things (IoT) is among the top three priorities for digital transformation for enterprises across industries; however, to move forward, companies will have to overcome key challenges, among them a complex ecosystem, data privacy and security issues, critical infrastructure and platform decisions, and investment challenges, according to Everest Group.

Currently, enterprises in the manufacturing and energy & utility sectors are the leading IoT adoptors. Industrial applications of IoT (commonly referred to as IIoT) are instrumental in increasing machinery uptime, enabling end-to-end supply chain visibility, reducing energy costs and preventing infrastructure failures. Service providers, too, have a high interest in IIoT, because IIoT offers faster return on investment than consumer IoT such as wearables and smart home devices.

Everest Group describes IoT and IIoT trends and the investments that service providers are making to capitalize on this new growth opportunity in its recently released Market Vista™: Q2 2017 report.

In addition, the report discusses outsourcing transaction trends, GIC-related developments, global offshoring dynamics, location risks and opportunities, and key service provider developments.

“Although transaction activity declined slightly in Q2 compared to Q1, it was a good quarter for the sourcing industry in many other aspects,” said H. Karthik, partner at Everest Group. “GIC market activity increased; location activity in Q2 was at an all-time high, with Europe, in particular, witnessing significant growth in activity compared to Q1; and most service providers reported sequential growth in revenues.”

*** Watch the Webinar Replay ***

Everest Group held a webinar on August 17 in which the findings of the “Market Vista: Q2 2017” report were reviewed. During this one-hour webinar, Everest Group experts discussed the factors disrupting the sourcing market—including digital technologies, regulatory changes and geo-political dynamics—and shared how multiple startups have emerged to fill the innovation gaps with new solutions and platforms. A particular focus of the webinar was the increasing adoption of U.S. domestic sourcing. Everest Group experts described the drivers behind increasing adoption and the experiences of firms in managing their domestic sourcing strategies. (Watch the webinar replay.)

Key Market Trends in Q2 2017

GIC activity continues to be driven by existing adopters, with focus on establishing R&D centers for next-generation technologies.

Outsourcing demand from the United Kingdom continued to remain low due to uncertainty with Brexit and reduced outsourcing by cash-strapped healthcare and government sectors.

Reduced revenue growth is pushing service providers to form partnerships rather than invest in acquisitions.

Leading locations—India in Asia Pacific, Northern Ireland and Romania in nearshore Europe, and Brazil in Latin America—witnessed a spike in new delivery center setups

***A complimentary 4-page preview of the report is available for download here.*** (Registration required.)

The post Enterprises Warming to IoT According to Everest Group Research | Press Release appeared first on Everest Group.

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[georgettebaker4569]

Enterprises Warming to IoT According to Everest Group Research | Press Release

Industrial IoT offers faster return on investment for global service providers striving to meet enterprise demand

Internet of Things (IoT) is among the top three priorities for digital transformation for enterprises across industries; however, to move forward, companies will have to overcome key challenges, among them a complex ecosystem, data privacy and security issues, critical infrastructure and platform decisions, and investment challenges, according to Everest Group.

Currently, enterprises in the manufacturing and energy & utility sectors are the leading IoT adoptors. Industrial applications of IoT (commonly referred to as IIoT) are instrumental in increasing machinery uptime, enabling end-to-end supply chain visibility, reducing energy costs and preventing infrastructure failures. Service providers, too, have a high interest in IIoT, because IIoT offers faster return on investment than consumer IoT such as wearables and smart home devices.

Everest Group describes IoT and IIoT trends and the investments that service providers are making to capitalize on this new growth opportunity in its recently released Market Vista™: Q2 2017 report.

In addition, the report discusses outsourcing transaction trends, GIC-related developments, global offshoring dynamics, location risks and opportunities, and key service provider developments.

“Although transaction activity declined slightly in Q2 compared to Q1, it was a good quarter for the sourcing industry in many other aspects,” said H. Karthik, partner at Everest Group. “GIC market activity increased; location activity in Q2 was at an all-time high, with Europe, in particular, witnessing significant growth in activity compared to Q1; and most service providers reported sequential growth in revenues.”

*** Watch the Webinar Replay ***

Everest Group held a webinar on August 17 in which the findings of the “Market Vista: Q2 2017” report were reviewed. During this one-hour webinar, Everest Group experts discussed the factors disrupting the sourcing market—including digital technologies, regulatory changes and geo-political dynamics—and shared how multiple startups have emerged to fill the innovation gaps with new solutions and platforms. A particular focus of the webinar was the increasing adoption of U.S. domestic sourcing. Everest Group experts described the drivers behind increasing adoption and the experiences of firms in managing their domestic sourcing strategies. (Watch the webinar replay.)

Key Market Trends in Q2 2017

GIC activity continues to be driven by existing adopters, with focus on establishing R&D centers for next-generation technologies.

Outsourcing demand from the United Kingdom continued to remain low due to uncertainty with Brexit and reduced outsourcing by cash-strapped healthcare and government sectors.

Reduced revenue growth is pushing service providers to form partnerships rather than invest in acquisitions.

Leading locations—India in Asia Pacific, Northern Ireland and Romania in nearshore Europe, and Brazil in Latin America—witnessed a spike in new delivery center setups

***A complimentary 4-page preview of the report is available for download here.*** (Registration required.)

The post Enterprises Warming to IoT According to Everest Group Research | Press Release appeared first on Everest Group.

from pesonivt2a http://www.everestgrp.com/2017-08-enterprises-warming-iot-according-everest-group-research-press-release-41658.html/ via http://www.rssmix.com/