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SLOVAKIA IS LEARNING THE ROPES OF OUTSOURCING

Companies still leery of complex outsourcing

ABOUT two thirds of companies which took part in a poll by eFocus magazine said they use some form of outsourcing. The magazine conducted its poll last year among potential and existing users of outsourcing in Slovakia. There were more than 180 respondents, mostly top managers in the information and communication technology industry, business, finance, telecom-munications, and public administration, the Hospodárske Noviny financial daily reported.

ABOUT two thirds of companies which took part in a poll by eFocus magazine said they use some form of outsourcing. The magazine conducted its poll last year among potential and existing users of outsourcing in Slovakia. There were more than 180 respondents, mostly top managers in the information and communication technology industry, business, finance, telecom-munications, and public administration, the Hospodárske Noviny financial daily reported.

Sixty percent of companies use outsourcing, and another quarter plan to use it, the poll discovered. Only 13 percent of respondents said they were not planning to use such services, but still showed an active interest in it.

The companies polled expressed most interest in partial outsourcing (in which the supplier provides only some information and communication technology (ICT) services, processes, and sources). More than one third of those questioned were interested in outsourcing the development of applications. So far, there is less interest in outsourcing entire processes or complex information processes, suggesting that the market for these services is less developed in Slovakia.

Among those companies which have yet to use outsourcing, the main expectations are: guaranteed quality and level of services (55.6 percent of respondents), opportunity to focus on their own core business (52.1 percent), reduced total costs for ICT (45.8 percent), and availability of experts for various spheres (44.4 percent)*. However, they also see potential risks in outsourcing, especially in finding the right outsourcing partner (67.4 percent) and the high price of the service (48.8 percent). They also worry about the safety of data (47.7 percent), and about losing their own professional and expert sources (30.4 percent).

When choosing a supplier, potential clients consider mainly the following criteria: price (63.2 percent), keeping to the service level agreement (60 percent), know-how and international experience (53.3 percent), and implementation of similar projects in Slovakia or abroad (45.2 percent)*. However, price remains the crucial criterion. In new outsourcing relationships, customers prefer to conclude one-year (28.9 percent), or two-year deals (31.3 percent).

More than 82 percent of the companies already using outsourcing said they were generally satisfied with the service. Those who were dissatisfied overall amounted to only 5 percent of respondents, and only 1 percent were completely dissatisfied.

Companies with a potential interest in outsourcing ranked guaranteed quality and level of service among their main expectations from outsourcing, along with the opportunity to focus on their core business, and cutting overall ICT costs. In reality, two of these parameters - concentrating on core business and a guaranteed level and quality of service - also appeared among the main benefits for companies already using outsourcing. These respondents also included the availability of experts for various spheres of ICT among the three biggest benefits.

(*with some answers, respondents could give more than one answer, so the total percentage may exceed 100 percent.)

Topic: Finances and Advisory


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