Maintaining Competitive Advantage and Managing Geopolitical Uncertainty Requires a Balanced Portfolio of Global IT Sourcing Partners, According to PWI
Red Bank, N.J., -- February 5, 2002. PWI report suggests that Russia is a "diamond in the rough" among offshore software development markets.
Feb 02, 2002
Tightening budgets, a steady demand for information and communications technologies and labor shortages in Europe and the US will continue to drive companies offshore for application development assistance. However, a new report from PWI cautions that not all offshore markets are created equally and IT decision makers must align their particular needs to the strengths and characteristics specific to certain offshore technology centers.
The report from PWI encourages companies to employ a second-generation sourcing strategy for Offshore Software Development (OSD). Doing so will provide sophisticated IT services purchasers with access to a rich network of geographically distributed vendors with distinct economic, productivity, skill, and cultural attributes.
While India has been the dominant offshore destination for application development, other regions are now emerging and drawing the attention of savvy technology buyers in both the US and Europe. Notable among this group of emerging destinations is Russia. The PWI report highlights several reasons why Russia is commanding such attention:
The PWI report asserts that Russia as an OSD destination is virtually untapped. According to World Bank estimates, with more than one-million technically trained people, Russia has a deeper technology pool than the US, China and Japan, and three times larger than India. Furthermore, Russia has 3,801 researchers per one million inhabitants. While that's less than Japan (4,909), it's greater than the United States (3698), Europe (2476), China (454), and India (151). Finally, in terms of the number of scientists and engineers per capita, Russia ranks third globally with a ratio of .8.
"We're talking about a society of technologists where the individuals are highly skilled, experienced, well educated and very motivated. This is a national resource, a true diamond in the rough," said Salvato.
Companies that are evolving their OSD strategies have taken notice and are tapping into Russia. "Talent-wise, the cream is slowly being skimmed off the top by the first movers. As word gets out this trend will accelerate. But it's early in the game and there's still ample opportunity for companies that are decisive and intent on extending their competitive advantages through IT," concluded Salvato.
Russia has appealing attributes as an emerging offshore development center, but companies are advised to conduct rigorous scrutiny during the partner assessment and selection processes. Many providers will offer a compelling list of differentiators. However, only a few of these are capable of delivering a consistently high level of service and quality. Proven skills that have been applied in commercial applications, US-based client relationship operations, track record, and experienced management are among the key items that must be considered during the selection process.
For enterprises in search of uncommon levers to competitive advantage, Russia warrants critical consideration as an OSD resource.
The report is available in the "Russian Model" section of the Knowledge Base or at PWI's web site (http://www.pwicorp.com/).
The report from PWI encourages companies to employ a second-generation sourcing strategy for Offshore Software Development (OSD). Doing so will provide sophisticated IT services purchasers with access to a rich network of geographically distributed vendors with distinct economic, productivity, skill, and cultural attributes.
While India has been the dominant offshore destination for application development, other regions are now emerging and drawing the attention of savvy technology buyers in both the US and Europe. Notable among this group of emerging destinations is Russia. The PWI report highlights several reasons why Russia is commanding such attention:
- Ample supply of qualified resources
- High education level of available talent
- Mature and experienced software development capabilities
- Cultural characteristics geared for OSD
The PWI report asserts that Russia as an OSD destination is virtually untapped. According to World Bank estimates, with more than one-million technically trained people, Russia has a deeper technology pool than the US, China and Japan, and three times larger than India. Furthermore, Russia has 3,801 researchers per one million inhabitants. While that's less than Japan (4,909), it's greater than the United States (3698), Europe (2476), China (454), and India (151). Finally, in terms of the number of scientists and engineers per capita, Russia ranks third globally with a ratio of .8.
"We're talking about a society of technologists where the individuals are highly skilled, experienced, well educated and very motivated. This is a national resource, a true diamond in the rough," said Salvato.
Companies that are evolving their OSD strategies have taken notice and are tapping into Russia. "Talent-wise, the cream is slowly being skimmed off the top by the first movers. As word gets out this trend will accelerate. But it's early in the game and there's still ample opportunity for companies that are decisive and intent on extending their competitive advantages through IT," concluded Salvato.
Russia has appealing attributes as an emerging offshore development center, but companies are advised to conduct rigorous scrutiny during the partner assessment and selection processes. Many providers will offer a compelling list of differentiators. However, only a few of these are capable of delivering a consistently high level of service and quality. Proven skills that have been applied in commercial applications, US-based client relationship operations, track record, and experienced management are among the key items that must be considered during the selection process.
For enterprises in search of uncommon levers to competitive advantage, Russia warrants critical consideration as an OSD resource.
The report is available in the "Russian Model" section of the Knowledge Base or at PWI's web site (http://www.pwicorp.com/).