The European e-Business Report The European e ... - empirica

The European E-Business Report 2005
2.10.3 Important topics and application areas
Close, personal contacts to customers key for successfully offshoring IT services
The ‘activity views’ collected by e-Business W@tch in 2005 indicated that a modern ICT infrastructure,
including internet connections and company websites is an important precondition for setting up shop
as an export-oriented IT service provider. However, these short case studies have also shown that the
professional use of ICT is not sufficient. There are further success factors, namely quality assurance
and personal contacts. Measures that ensure the quality of the project are, admittedly, of general
importance, independent of the location of the IT services provider. But in contrast to many domestic
IT service providers, most of today’s offshore suppliers cannot build on reputation. Moreover, they are
often confronted with prejudices with respect to their service quality.
Furthermore, the experiences made by the companies interviewed in the context of case studies show
that close, personal contacts to customers are a key success factor. Firms consider the establishment
of personal and long-term relationships to (potential) customers in the target market to be a key
priority. This makes language skills important, too. In particular smaller customers prefer to discuss
their needs and problems in their mother language. Furthermore, bilateral co-operations and trade
fairs can help IT services companies to establish personal relationships.
Finally, it turned out that offshore IT service providers in Eastern Europe have to become more than
simply low cost service providers. While low prices are essential for getting into the markets in
Western Europe, they are not sufficient for sustainable competitiveness of export-oriented Eastern
European IT services businesses.
OSS: managing the open source developing community is a major challenge
Open source paves the way from product-centric software supply to new business approaches that
focus on services around the software. In this way, small companies gain access to a software
segment that is increasingly dominated by large players. Moreover, established software companies
can side-step the strong competition stemming from an ongoing consolidation in the traditional
software market.
IT users can also benefit from this development. OSS enhances the adoptability of software products
for the specific needs of companies and thus supports their efficient use. Furthermore, OSS-using
companies gain some independence from software manufacturers while, in many cases, also
benefiting from cost savings.
The internet and internet-based platforms play an essential role in the OSS development as they
provide the basis for collaboration and an organisational infrastructure to support the development
process. In addition they play a role in marketing.
The case studies have further demonstrated that quality assurance and the ability to react promptly to
emerging customer needs are of outstanding importance. Managing the developer community turned
out to be a key challenge of OSS businesses. It appears that the widespread perception of OSS
communities as groups of altruistic programmers working in their leisure for free does not hold
anymore, at least if large and professional OSS projects are considered.
Software as service: extensive knowledge about customer needs required
About five years after the dotcom boom, the paradigm of providing software as service has had its first
reality check, leading to significant changes of internet-based services. Some providers of B2C e-
commerce sites increasingly tend to support the entire sales process of suppliers. Thus, the support of
actual business processes and actual needs of customers has become more important than the
realisation of new technical paradigms. This also applies to application service providers. Many early
ASPs failed despite the potential of this concept. Their services offered were very much technologydriven
and neither addressed company specific requirements sufficiently nor offered a compelling
advantage compared to local installations. In fact, there is a trade-off between the necessary degree
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