2. Valueshore
Euan Davis
Principle Analyst
Forrester Research
September, 2009

3. Talking points
• Recessionary pressure continues to dominate IT
spending
• New ways of contracting emerge linked to sourcing
maturity
• Firms seek common service essentials from globally
configured sourcing deals
• Offshoring no longer just equals “India” but many
European minds fixate on the Indian pure-plays
• Clients seek to reduce risk and investigate near-
shore options closer to home
3 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

4. Agenda
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
4 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

5. Europeans vote with their wallets
Desire to increase
applications and
infrastructure
outsourcing
Watch for a surge in
leveraging global
service delivery
5 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

6. Understanding Global Delivery
► Integrating rich domain expertise, broad
technical skills, and project management
discipline across a network of low-cost
locations through consistent and robust
processes, tools, and infrastructure to
maximize the timely delivery of superior IT and
BPO solutions
6 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

7. Service scope sticks on application work
7 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
August 2009 “How Europeans Tune Global IT Service Delivery Models”

8. Agenda
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
8 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

9. The changing offshore location dynamics
• Many countries are jumping on the offshore
bandwagon as an economic development strategy
• But just because the Economics Minister says it’s an
offshore location does not make it so
• Country assessments focus on government stability
and infrastructure quality
• But not important issues like cultural affinity for
offshore work and the scale and health of
indigenous vendors
9 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

10. Aggressive blends exacerbate internal risks
External risks External risks compound internal risks External risks
Time zone • Lack of governance Vendor
differences • Lack of management stability
• Weak IT processes/outsourcing process
maturity (requirements gathering, change Cultural and
Country language
management, specification writing,
infrastructure differences
testing/QA, SLAs, documentation)
• Internal customers unprepared for the
Management rigidity of the outsourcing relationship Governance
challenges • Improper project selection
• Unrealistic expectations
• No recognition that vendors lack business Distance to
Security knowledge vendor
Source: Forrester Research
10 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

11. European firms seek nearshore skills
• Some countries are more mature than others
– Mature nearshore delivery hubs in Eastern Europe
– Russia rich in software development expertise
– Spanish industry expertise
• Many European service providers focused on Poland
– Pure plays have gone further East
• What counts in deciding a nearshore location
– Country stability; infrastructure quality, cultural affinity
and the quality of local labour count
• What about Spain?
11 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

12. Agenda
• Why executives need global delivery strategies
• Firms move nearshore to solve offshore issues
• Spain emerges as a credible offshore destination
12 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

13. Skills, scale and location underpin Spain’s appeal
• Large skilled IT labour pool
– Check out the ratios
• Industrialized software factories
– Check out how the rates compare
• Domain expertise
– Check out the large firms punching above their weight
• Potential to scale with Latin America
– Spain/Latin American delivery model offering skilled
pool
13 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

14. IT salaries feed lower rates
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15. Graduates feed a large local IT labour Pool
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16. Which firms should consider a move to Spain
• Spain as an alternative to India
– Make an inventory of current applications
– Document current best practices
– Pilot applications with the right critical mass
– Invest in the business analyst function
• Spain as a source of complementary skills
– Specific functional process expertise
– Investigate the industry and IT service capabilities
– How can the model scale through Latin America
16 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

17. Spain as an alternative to India? Decision steps
17 Entire contents © 2009 Forrester Research, Inc. All rights reserved.
February 2009 “Complementing India With Nearshore Strategies: Spotlight On Spain”

18. Spain as a source of complementary skills?
• Do your internal preparation
• Make sure you have a
transformation roadmap—how
you will move
• Make sure you have sufficient
sourcing deal governance
• Operational control of the
nearshore service delivery
model
18 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

19. Focus on the site visit and locality for success
• Site visits are an essential part of the sourcing
process
– Meet them on Spanish soil
• Leverage the regional autonomy
– Offers negotiation levers on business tax rates
– Drive discounts on a deal with location rebates
• Seek out local support organizations
– For advice and back up
– Value shore team; Invest in Spain
19 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

20. If you remember nothing else
Global delivery is used in most large
1 outsourcing deals
2 European firms need nearshore options
Spain offers a credible nearshore
3
destination
20 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

21. Thank you
Euan Davis
eudavis@forrester.com
Complementing India With Nearshore Strategies:
Spotlight On Spain:
http://www.forrester.com/Research/Document/0,7211,46904,00.html
Value Shore
valueshore@valueshore.org
www.valueshore.org
21 Entire contents © 2009 Forrester Research, Inc. All rights reserved.

22. Final Questions, Comments, Discussion?
22 Entire contents © 2009 Forrester Research, Inc. All rights reserved.