Forecasts for IT outsourcing in Europe in 2012: Ciklum

February 6, 2012:  Ciklum, an IT outsourcing service provider from Denmark which offers nearshore services to companies in the Eastern European region has come up with forecasts on the European outsourcing Industry in 2012. 

The year 2011 has witnessed a large scale application of Information technology outsourcing services in traditional areas such as IT and Telecom. The year also experienced the diffusion of Information Technology outsourcing into profitable areas such as digital media, mobile computing, online gaming and other areas.

Even though it is premature to make any forecast of 2012 happenings, there are some predictions that are likely to happen.

An important predictions made is that the inadequate resources in the European nations will be an important driver behind the outsourcing moves. In addition to this the increased time to the market will also influence the outsourcing decisions. This observation was made in the IT Sourcing Europe report. Another study by BusinessEurope substantiates the observations made by IT Sourcing Europe. The study by BusinessEurope has observed that Germany was short of 88,000 professionals with Information and Communication Technology skills.

The IT Sourcing Europe survey has found that the companies in the European Union nations that do not outsource is most likely to nearshore their Information Technology support and Development. The chance of such companies’ offshoring IT functions is much less.  

IT Sourcing Europe says that the study has found that 56 per cent of the companies which performs all the functions in-house will consider innovative engagement models from the IT service providers as a criterion for selecting service providers.

The forecasts made by say that the IT firms will be analyzing the risks associated with cloud and the value it is going to offer in 2012. The firms will be introducing stringent policies that will cover cloud sourcing and the firms that are willing to adopt cloud computing will closely analyze the privacy laws in the countries that will hold the data. 

The predictions also observes that the Information Technology outsourcing service providers will also work on developing infrastructure capacities in effort to shift from application development. This will lead to more companies in the European Union near-shoring their IT functions to outsourcing service providers in central and Eastern Europe.

Another trend that will gain momentum in 2012 is backsourcing. I.e. more companies are expected to bring outsourced functions to in-house centers or nearshore locations. This trend has started in 2011. This will help IT service providers in the region to bag contracts with firms that backsource.

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