European companies and outsourcing isn’t a match
Written on April 11, 2008 – 4:45 pm
Ernst-Jan Pfauth, editor in chief
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A study by Forrester shows that continental European companies are hesitant to outsource work like software engineering to countries like India. Forrester analyst Sudin Apte: “We are seeing only a few large offshore deals from Continental Europe, because companies there are still testing the waters, and the ramp up is very slow.” The United States though, are pretty fond of the Indian outsources. American companies make up for 60 percent of all the revenue made by Indian outsourcing companies.
Yet Indian companies foresee problems now the US economy faces a possible recession. Therefore they try to convince European companies to use their services. This turns out to be quite complicated, since European companies still insist on offering local service, partly due to local languages.
According to Apte, companies from U.K. and US are willing to change their systems and production processes. Even newspapers outsource editorial work. But a French company “would want its vendor to fully adopt French business practices, deliver from a local facility and interact in the local language”. But they do feel the need to start outsourcing on a larger scale, Apte said. “They will start with projects offshore that involve 30 to 40 people on a project, and then ramp up quickly”.
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