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National ITT sector to anchor in the international markets: outsourcing trends

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National ITT sector to anchor in the international markets: outsourcing trends Tomas Milaknis CEO, Alna AB Vice President, ITC Association INFOBALT – PowerPoint PPT presentation

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Title: National ITT sector to anchor in the international markets: outsourcing trends


1
National ITT sector to anchor in the
international markets outsourcing trends
Tomas Milaknis CEO, Alna AB Vice President, ITC
Association INFOBALT
2
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
  • Export of ITC services grew by 28.6 to 45 mill
    EUR
  • Total country exports grew by 9.1
  • 12 out of 20 top Baltic IT companies are in
    Lithuania
  • 44 of 20 major government services are available
    on Internet in Lithuania (EU 67)
  • Top 10 companies experienced the growth of their
    exports from 40 to 80 in 2003

3
. BUT COMPETITION IS INCREASING
  • 600 ITC companies already operate in Lithuania
  • Globalization process
  • 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

4
LITHUANIAN IT INDUSTRY TOMORROW. WHERE WE SHOULD
GO?
  • Scenarios of Lithuanian ITC industry development
  • Expand
  • Enter new markets
  • Start projects in neighboring countries
  • Start outsourcing activities
  • Specialize
  • Niche solutions and competence
  • Specialized products

5
GLOBAL TRENDS
  • THE RISE OF BUSINESS PROCESS OUTSOURCING IN
    EUROPE
  • Eastern Europe will be the primary offshore
    delivery platform for BPO in Europe by 2007
  • Spending on BPO in Europe will reach 4,3 USD
    billion by 2007
  • 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)

6
GLOBAL TRENDS
OUTSOURCING PLAYERS SHOICE. NEARSHORE vs OFFSHORE
  • These inhibitors provide excellent opportunities
    for the nearshore providers
  • 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

7
GLOBAL TRENDS
IT FUTUREby 2007
  • End-User Consider
  • Outsourcing anything non-value-added
  • Standardizing everything you can at base level
  • Rigorously managing your portfolio
  • 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

8
. AND CONCLUSIONS COULD BE
  • 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.

9
ACTION POINTS
  • 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)
  • 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.

10
ACTION POINTS
  • We should reload our service portfolio - From
    body shopping to product development, project
    management
  • We should go to Alliances
  • We should start specialize in order to have
    leading positions in on the global substantial
    niches
  • Enterprise content management (process,
    documents, collaboration, data, real-time
    analysis management)
  • Wireless solutions
  • Applications for mobile devices

11
ROLE OF GOVERNMENT
  • Innovation Support
  • - Active promotion of cluster policies e.g.
    participation in Sunrise Valley and
    Technopolis projects
  • Knowledge society
  • Government already is active in Window to the
    future project
  • Government supports school computerization
  • Export marketing
  • Government should market Lithuania as a No1
    choice for nearshore
  • Government should join Outsourcing2Lithuania
    project
  • IT services outsourcing
  • Government should lead the way starting to
    outsource IT
  • Government should increase operational
    effectiveness by outsourcing

12
OUTSOURCE2LITHUANIA
  • Goal to become No1 outsourcing destination in
    Europe
  • Stages
  • Information presentation
  • Training
  • Marketing
  • Challenges it is very expensive to market
    Lithuania abroad and compete with a substantial
    government support for marketing of India and
    other countries

13
BRINGING INNOVATIONS TO THE COUNTRY. ROLE OF ALNA
  • Gartner says, Alna is one of the leading
    near-shore site for outsourcing in Europe
  • Starting in 1995 from body-shopping.....
  • 2004 complete project delivery in 30 countries
    on five continents
  • Passionate in quality already CMM Level 2
  • Hundreds of specialists through partner networks
    and Alliances with global players (India, Europe)
  • Product Development
  • Document management system DOCLOGIX sold in
    Germany, Denmark, Lithuania, Latvia, Estonia
  • Investments into new products development - 1 m
    Euro

14
ALNA AB GLOBAL PROJECTS
15
The condition of IT industry is self-inflicted.
Lets join the forces and act.
tmilaknis_at_alna.lt www.alna.com
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