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Myths & Truth Every European SME Should Know About Software Development Outsourcing

Small and medium size enterprises (SMEs) represent a significant proportion of the European Union (EU) economy. Within the EU there are more than 18 million SMEs representing 59% of the total economy, generating 67% of employment and contributing around two thirds of the EU GDP.

Since SMEs are recognized to play a pivotal role in the EU economic development, it is critical to their competitiveness and survival to widely use IT and telecom solutions. Although the European SMEs appear on par with large organizations in terms of computer usage, they lag behind in terms of usage of complex applications and emerging technologies. This disparity can be partly explained by the fact that most of SMEs do not need the same level of IT sophistication and grasp of innovation as the large corporations.

Additionally, the limited use of extensive IT infrastructures and emerging technologies is due to such factors as financial constraints, lack of organizational readiness and technical skills, and high cost of technology ownership as well as in-house application development and maintenance. Although IT outsourcing (ITO) has already become a global commodity practice, research shows that many SMEs are still afraid of transferring their IT function / elements to be fulfilled by a 3d party nearshore (within/close to the same time zone) or offshore (2 and more time zones away). Among reasons keeping SMEs away from the outsourced development, more than 10% said they think they are too small and immature to outsource.

However, the company size is irrelevant when it comes to unlocking the benefits of IT outsourcing and SMEs can gain as many long-term benefits from their outsourced development as their larger counterparts.

Download the White Paper “Myths & Truth Every European SME Should Know About Software Development Outsourcing” by IT Sourcing Europe.