IT Outsourcing in the D-A-CH region
IT Outsourcing, as an alternative to internal provision of IT services to business departments, has been used for many years by enterprises in the D-A-CH market. It is estimated that currently almost 50% of all companies use or intend to use IT outsourcing. The most important advantages of IT outsourcing, as indicated by companies, are: optimization of the costs of IT services, standardization of IT services, the ability to focus on the core business, and the ability to release the internal IT resources and use them in the development of key competencies and the implementation of strategic IT projects. An equally important argument for IT outsourcing is a growing problem with procuring appropriate specialists in local job market, and maintaining them in an internal IT team. It is estimated that, in Germany alone, there is a deficit of IT experts and engineers amounting to several thousand people. Cooperation with an outsourcer, which has a broad spectrum of IT specialists at its disposal, allows for much more flexibility and immediacy of response to the ever-changing business environment.
In the last few years in Germany, Switzerland and Austria we have observed a considerable drop in the number of ‘super outsourcing contracts’ i.e. comprehensive multimillion contracts, concluded for a very long period of time, which have now been replaced by smaller, shorter contracts, often in a multi-outsourcing model, using several suppliers who render complementary services in strictly defined IT areas. Owing to this, the German outsourcing services market, for example, which is currently dominated by a few dozen of the largest global and regional players, has a chance to open to smaller, specialized service providers.
Almost half of outsourcing contracts in Germany are realized by the local resources of service providers or their local subcontractors. However, in search of the lowest price companies often decide to sign outsourcing contracts with suppliers who render services based on remote employees in the Far East (India, China, the Philippines and Vietnam). It is estimated that in the German market almost 35% of all IT outsourcing contracts are realized in this so-called offshoring model. However this, until recently, very distinct global trend is beginning to change. Enterprises operating in the German-speaking markets, increasingly often choose a nearshoring rather than an offshoring model. In many cases regarding offshoring model, companies have experienced problems with time zones gaps, cultural differences, communication in German and many other difficulties, e.g. relating to the provision of data security, which have had a negative impact on the quality and real costs of IT services rendered.
In the case of nearshoring, a model in which outsourcing services are rendered by suppliers from the region, especially Eastern and Central Europe, most of these problems do not occur at all or can be eradicated very successfully. Employment costs are still considerably lower than in Germany, Austria or Switzerland. Although they are higher than in Asia, but the value of services for the price offered is still in favour of nearshoring. Additionally, countries which are members of the European Union operate under a uniform set of data protection regulations, so the security risk is much lower.
Comarch, as a global supplier of IT systems and IT services based in Poland, is well suited to render services in the nearshoring model for the D-A-CH region. On the one hand, owing to the local Polish competences centers, it delivers very competitively priced remote outsourcing services, based on high class IT specialists. On the other, thanks to our several years of experience in the D-A-CH market in Germany, Austria and Switzerland, we have extensive local structures (14 locations altogether) and a Data Centre in Dresden; we are already very close to our clients. Local resources in the shape of experienced Project Managers and Account Managers are our response to the most frequently indicated problem of poor communication with an outsourcer involved in a project. Depending on the requirements, our employees provide on-site services at client’s locations (periodical service visits or permanent on-site presence). We are also ready to take-over our client’s local engineers and create a professional IT team based on their knowledge and in-depth analysis of the client’s own IT environment.
Comarch was founded in 1993 in Krakow and has since 1999 been listed on the Warsaw Stock Exchange. We have been involved in the German market since 2001. In the past several years we have expanded our portfolio of IT products and services, which we supply to all important sectors of the economy, including telecommunication, finance and banking, production and services companies, small and medium-sized enterprises and public administration. Currently Comarch is one of the largest IT companies in Central and Eastern Europe, employing almost 4,500 high-class specialists. We are a solid and stable business partner, increasing our revenues year-on-year to EUR 212,000,000 in 2013. We also invest a lot (approximately 10% of revenue a year) in the research and development of our products and services.
The model of outsourcing services offered by Comarch is individually suited to the needs and requirements of each client. We are flexible and successful in the implementation of outsourcing contracts, taking advantage of both local (onshoring) and remote (nearshoring) resources. An additional advantage is offered by our own Data Centre in Dresden, which provides a comprehensive service to our clients, taking into account system hosting and private cloud solutions.
When preparing an outsourcing service proposal in the IT area, and then providing the services, we make every effort to address the most important issues from the client’s point of view, when it comes to choosing a credible, professional outsourcing partner, such as:
- provision of high quality service, based on experienced and competent HR resources
- considerable reduction of operational costs, up to 30%, in relation to the in-house model
- cultural proximity and the high linguistic skills of our experts (English, German)
- flexibility when it comes to terms and conditions of services rendered
- experience in the implementation of similar projects, proved by references
These are some of the reasons why our clients hold cooperation with Comarch in high esteem and are happy to prolong their outsourcing contracts with us. For many we have become a business partner, which means that, based on our know-how and knowledge of our clients’ IT environments, we can effectively support their development. Several significant references, acquired on the D-A-CH market, and in the other regions of Europe, are the best evidence of the high quality of services rendered by the company.
Research and analysis by some of the leading analytical firms shows that many entrepreneurs operating on the D-A-CH market are increasingly frequently taking advantage of IT outsourcing, being aware of all the potential risks and threats. A growing trend, which we have now observed for a number of years, is to choose service providers in the nearshoring region instead of the Far East; this – to a large extent – is a response to these threats. Outsourcing services rendered by Comarch, owing to our extensive competence centers in Poland and a strong, several-years-long presence in Germany, Austria and Switzerland, may be an interesting alternative to companies that currently operate an in-house model or enterprises planning to change their present outsourcer.
Pawel Szymanski, Business Solution Manager, Comarch ICT