Transcript Alna - EDNES

National ITT sector to anchor in the
international markets: outsourcing
trends
Tomas Milaknis
CEO, Alna AB
Vice President, ITC Association INFOBALT
LITHUANIAN ITC SECTOR IS BOOMING…

Total ITC sector valued at ~1,237 mill EUR
▪ 7.5% of the Lithuanian GDP

Growth by 27-30% in 2002-2003
▪ GDP grew in 2003 by 9%
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Export of ITC services grew by 28.6% to 45 mill EUR
▪ Total country exports grew by 9.1%
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12 out of 20 top Baltic IT companies are in Lithuania
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44% of 20 major government services are available on Internet in
Lithuania (EU – 67%)
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Top 10 companies experienced the growth of their exports from 40% to
80% in 2003
…. BUT COMPETITION IS INCREASING
▪
600 ITC companies already operate in Lithuania
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Globalization process
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New players come – World famous IT Giants HP, IBM, TIETO,
MICROSOFT, ORACLE etc.
Influence of integration with EU – new IT players in the region from
EU countries
Estonian and Latvian companies expand to Lithuania
LITHUANIAN IT INDUSTRY TOMORROW. WHERE WE SHOULD GO?
Scenarios of Lithuanian ITC industry development
▪
Expand:
-
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Enter new markets
Start projects in neighboring countries
Start outsourcing activities
Specialize:
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Niche solutions and competence
Specialized products
GLOBAL TRENDS
THE RISE OF BUSINESS PROCESS OUTSOURCING IN EUROPE
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Eastern Europe will be the primary offshore delivery platform for BPO in Europe by
2007
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Spending on BPO in Europe will reach 4,3 USD billion by 2007
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A Consortia of service providers will be necessary for 70 percent of strategic BPO
in 2007
▪
One-third of outsourcing deals will include business-benefit-based pricing by 2007
instead of 11 % now. (Now – 50 % fixed price, 39% – per transaction, 4% - time and
materials)
GLOBAL TRENDS
OUTSOURCING PLAYERS SHOICE. NEARSHORE vs OFFSHORE
▪
These inhibitors provide excellent opportunities for the nearshore
providers:
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Geopolitical risk
Global economic slowdown
Unknown countries
Unknown vendors
Lack of infrastructure
Language & culture
Lose control
So, Lithuania is on the pipe, but we still look poor comparing
Romania, Bulgaria, even Latvia achievements
GLOBAL TRENDS
IT FUTURE…by 2007
▪
End-User Consider…
▪ Outsourcing anything non-value-added
▪ Standardizing everything you can at base level
▪ Rigorously managing your portfolio
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Massive Vendor consolidation
Computing Infrastructure goes virtual
Networks goes wireless broadband
Massive shift in Software Architecture – applications will be built by assembling
services
Major wave of Innovation and demand for IT will start at 2006
Real-time analytics, massive data and process management will emerge as the
most important business applications
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…. AND CONCLUSIONS COULD BE
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Design Architectures and company strategies should be based on
fundamental and inevitable confluence of:
▪ Real-time infrastructure
▪ Wireless broadband
▪ Low-cost, low-power-consumption mobile devices
▪ Service oriented architecture
Trigger year is 2006 – future will be terrific for those that upgrade their skills
now.
ACTION POINTS
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We must ensure that we have a vision of what we want to achieve as offshore
/ nearshore providers
▪
We also need to have a carefully developed strategy to achieve this.
▪
We also need to drive our companies to get international qualifications to
support positioning and marketing (CMM)
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Many countries are now putting offshore outsourcing high on their agenda for
economic growth. The window of opportunity is thus narrow. We need to
move fast.
▪
We should take a critical look at our strengths and weaknesses and define our
starting point immediately
▪
We need innovations and infrastructure at 2 levels: Government and private
sector organizations.
ACTION POINTS
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We should reload our service portfolio - From body shopping to product
development, project management
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We should go to Alliances
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We should start specialize in order to have leading positions in on the global
substantial niches:
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Enterprise content management (process, documents, collaboration, data, realtime analysis management)
Wireless solutions
Applications for mobile devices
ROLE OF GOVERNMENT
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Innovation Support:
- Active promotion of cluster policies – e.g. participation in “Sunrise Valley” and
“Technopolis” projects
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Knowledge society:
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Export marketing:
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Government already is active in “Window to the future” project
Government supports school computerization
Government should market Lithuania as a No1 choice for nearshore
Government should join Outsourcing2Lithuania project
IT services outsourcing:
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Government should lead the way starting to outsource IT
Government should increase operational effectiveness by outsourcing
OUTSOURCE2LITHUANIA
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Goal: to become No1 outsourcing destination in Europe
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Stages:
▪ Information presentation
▪ Training
▪ Marketing
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Challenges: it is very expensive to market Lithuania abroad and compete with a
substantial government support for marketing of India and other countries
BRINGING INNOVATIONS TO THE COUNTRY. ROLE OF ALNA
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Gartner says, Alna is one of the leading near-shore site for outsourcing in
Europe
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Starting in 1995 from “body-shopping”.....
… 2004: complete project delivery in 30 countries on five continents
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Passionate in quality – already CMM Level 2
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Hundreds of specialists through partner networks and Alliances with global
players (India, Europe)
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Product Development
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Document management system DOCLOGIX – sold in Germany, Denmark,
Lithuania, Latvia, Estonia
Investments into new products development - 1 m Euro
The condition of IT industry is
self-inflicted.
Let’s join the forces and act.
[email protected]
www.alna.com