Austrian Software Development Outsourcing Trends 2010 Revealed

IT Sourcing Europe provides a brief summary of the most thought-provoking findings of its Austrian IT Outsourcing & In-House Software Development Survey 2010.

IT Sourcing Europe, a UK-based nearshore IT outsourcing (ITO) research and advisory firm, announced today the completion of its Austrian IT Outsourcing & In-House Software Development Survey 2010, conducted in the frames of the Pan-European ITO research 2010. The survey aimed to explore the key trends and challenges among software development outsourcing companies in Austria. In the period between September and October 2010 IT Sourcing Europe has polled 157 small, mid-sized and large companies in Austria that outsource their software development function to the 3d party offshore (at least 2 time zones away from the home country), nearshore (maximum 2 time zones away) and within Austria. The companies surveyed represent all of the major verticals from IT and telecom to hospitality to media and entertainment.

The survey revealed the following trends among the Austrian software development outsourcers:

• In Austria, the number of nearshore software development outsourcers is double the number of offshore outsourcers (32% vs. 16%);
• The top three factors driving corporate decisions to outsource are: to reduce operating costs (30% of respondents); to get access to more qualified resources and skills which are hard to find within Austria (24% of companies polled) and to respond to pressures from investors and/or executive management to cut down software development budgets (22% of participants);
• The majority of the Austrian companies surveyed (28%) outsource 40% to 59% of their entire software development function, while only 2% of companies outsource less than 10% and 19% of companies outsource 90% to 100% of their software development volume;
• The most outsourced area of expertise in Austria is Web 2.0 (Microsoft ASP.NET, Java, EpiServer, open source etc) - 42% of companies polled, followed by mobile development (34%). The least outsourced area of expertise is embedded development (only 3% of companies surveyed);
• The top three drivers of the choice of the outsourcing destination in Austria are: geographical and cultural proximity (25%), available IT resource pool (19%) and low costs (18%);
• The top three drivers of the choice of the outsourcing partner are: positive references and reputation (26%), low service fees (17%) and innovative business models (13%);
• Most of the Austrian companies surveyed are very dissatisfied with the quality of project deliveries and services provide by their current ITO partners. The participating companies were asked to assess their current level of satisfaction with the outsourcing services provided on a 5-point scale (where 5 is most satisfied and 1 is least satisfied) and 61% of companies issued their providers 2 and 3 points;
• Overall, 33% of the Austrian companies manage to save 10% to 24% and 29% of companies save 25% to 39% of operating costs from their outsourced development;
• Twenty-five percent of companies polled think that outsourcing their software development has been the right decision versus only 2% of companies regretting making decisions to outsource.

More thought-provoking findings are available in the Austrian IT Outsourcing Intelligence Report 2010.