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  1. 1. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer
  2. 2. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer The lack of IT experts (Fachkräftemangel) as heavily experienced in Germany is a challenge in many European countries and hampering growth. At the same time other countries do have SW developers, etc. in quality and valuable numbers who want to get engaged. Transferring them to Germany and hiring them locally is found not to be a long term solution. We propose a dedicated nearshore approach to be a solution of choice by eliminating any overhead and adapting the best practices proven at corporations to the specific needs of smaller or medium sized enterprises (SMEs). The upcoming nearshore destination - Portugal - is introduced and some of the benefits of Portugal are explained. The expertise of the authors as well as the options to support companies – especially smaller or medium sized ones – by a successful nearshore approach in sw development is touched.
  3. 3. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer CONTENT 1 Example Germany: Shortage of IT talent and need for external experts.................................................. 1 2 Option 1: Transferring foreign experts to Germany.................................................................................. 3 3 Option 2: Building on nearshore IT experts is one established solution................................................... 4 4 Portugal as an upcoming nearshore location............................................................................................ 6 5 Interested? How we could help............................................................................................................... 15 6 References............................................................................................................................................... 16 7 The authors.............................................................................................................................................. 17
  4. 4. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 1 of 18 2,8 11,7 17,8 18,2 19 27,1 30 30,8 34,8 38,5 40,9 41,3 0 5 10 15 20 25 30 35 40 45 PROTEKTIONISTICHE MÄRKTE ZUNEHMENDE STAATLICHE REGULIERUNG EUROKRISE STEIGENDE PERSONALKOSTEN STEIGENDE ROHSTOFF- UND ENERGIEKOSTEN STEIGERUNG DER KUNDENZUFRIEDENHEIT STRUKTURWANDEL IN DER BRANCHE ERREICHEN DER WACHSTUMS- UND… ERSCHLIEßEN NEUER… KONJUNKTURELLE ENTWICKLUNG STEIGENDER WETTBEWERBSDRUCK FACHKRÄFTEMANGEL Zukünftige Herausforderungen 1 Example Germany: Shortage of IT talent and need for external experts 1.1 Lack of IT talent (IT Fachkräftemangel) - one of the top concerns According to many resources and even confirmed by the German government, the lack of skilled workforce (Fachkräftemangel) is one of the top concerns for executives in Germany (e.g. References [1] and [2]). In 2013 the research organisation TrendMonitor stated “Der IT-Fachkräftemangel zählt zu den ganz großen Herausforderungen für Unternehmen.” Figure 1 – Lack of IT experts as top priority in Germany (source: TRENDMONITOR-ANALYSE, February 2013) This is especially true for software space (application development and maintenance, ADM) which is continuously getting more importance even in domains with historically low focus on software. Such domains like automotive or industrial engineering – strongpoints of the German economy – are thus getting under increasing pressure. An impressive example is the “The Connected Car Value Chain” and its impact on car manufacturers (e.g. discussed at the A.T. Kearney Digital Business Forum 2014 in Berlin, see References [4]). Understanding that the upcoming trend towards digital business models and its impact on classical businesses is just starting to emerge and that those models as well as any corresponding reaction from established business will be based on software, the importance of having well educated, highly motivated and open minded SW experts cannot be overestimated.
  5. 5. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 2 of 18 1.2 The rise of Digital Business Models will further increase the importance of SW experts The lack of SW experts in high quality and quantity on the market in general leads to a low scalability of the companies workforce related to SW. Lack of young digital natives limits the full usage of new technologies. As a result, fast time to market of new products is expected to be hampered severely. Furthermore companies will face high costs already for common development tasks and in particular for rare skills. 1.3 The effects will be stronger for small and medium sized companies or brands with low power of attraction for IT graduates Understanding that graduates typically will favour large corporations or fancy IT brands, the effect on small or medium sized companies (KMUs and Mittelstand) will even be stronger. Young bright graduates with skills the market is asking for are expected to prefer compelling brands with a heritage in IT and B2C such as Google instead of a relatively unknown brand of a small or medium sized enterprise from a domain being recognised as less attractive such as industrial engineering. 1.4 Those effects will be further strengthened by the demographic factor A simulation by the statistic tools provided by the German authorities (References [5]) illustrates the changes in demography expected in Germany in ten year steps from 2010 up to 2040. Figure 2 – Demographic factor of population in Germany (source: German government) This aging of the German society and the thus further reduction of skilled workforce will lead to even less experts, in particular concerning upcoming technologies where only the younger generation is expected to be familiar and up to date. The aforementioned challenges for companies to develop products with a fast time to market, low costs, among others, will be intensified. 1.5 Additional pressure due to global competition and new entrants If not already in effect, in addition to the aforementioned challenges, German companies building solely on a local workforce will be challenged by new competitors entering the market out of remote countries (e.g. new entrants from China building on copycat products and on a cheaper workforce) or simply by existing local
  6. 6. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 3 of 18 competitors who already successfully build on the benefits of nearshore sourcing to countries such as Portugal. 2 Option 1: Transferring foreign experts to Germany 2.1 Simplest solution and already in place by majority of companies The simplest solution that comes into one’s mind is to encourage foreign IT experts to transfer to Germany and hire them as local employees (immigration of IT experts). This model is supported by a majority of German companies and seems to be fuelled by the current differences of the economies within the European countries, especially the challenges faced in Southern Europe. 2.2 Foreign experts typically remain for less than 5 years - no long term solution However, this does not seem to be a valid long term solution. According the investigations by Bitkom Research GmbH on behalf of LinkedIn in September 2013 (References [6]), the majority of foreign experts only remains between one and four years in the German company. The study reveals that in most cases, young professionals or graduates are recruited. The hiring company gets young and motivated talents at a reasonable or even low cost. This is according their interests and the need to invest in training the graduates is usually well spend. However, leaving after less than four years looks like a challenge to build up a stable and well-rehearsed workforce and questions the return in value of the initial training being time consuming and costly. Figure 3 shows the results of the question “How long do foreign employees remain in average in your company?” (the results are based on companies with more than 50 employees which do employ foreign experts. The sum of companies considered were 188, due to rounding errors the sums need not be exactly 100%). 16% 6% 9% 14% 21% 23% 11% 1% 500 oder mehr MA (n=64) 2% 9% 8% 19% 23% 18% 15% 6% 50 bis 499 MA (n=124) 7% 8% 8% 17% 22% 20% 14% 4% 10 Jahre oder… 5 bis unter 10… 4 bis unter 5… 3 bis unter 4… 2 bis unter 3… 1 bis unter 2… Sechs Monate… Weniger als… Alle Unternehmen (n=188) Figure 3 - Averageretentiontime of immigrants in German companies (source: Bitkom Research on behalf of LinkedIn)
  7. 7. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 4 of 18 2.3 The immigrants want to move home – after having gained professional experience As the results of Bitkom Research GmbH on behalf of LinkedIn for 2014 shows, “Häufigster Grund für die kurze Verweildauer ist der Wunsch, nach dem Sammeln von Berufserfahrung wieder in das Herkunftsland zurück zu gehen” (References [6]). As much as anyone can understand this strong aspiration of those young immigrants to move back home, this is significantly affecting the economic value of their local employment in Germany and their extensive training. 3 Option 2: Building on nearshore IT experts is one established solution 3.1 Own nearshore centre or building on a trusted partner – the choice is yours Another option – which is the proposed one by the authors – is to build upon fitting IT experts in remote countries but to ensure a long term perspective for both – the company as well as the expert –is given. This is to be achieved by setting up a dedicated own nearshore centre (captive centre) or by closely working with a trusted partner (non captive centre). There are more than enough examples of successfully operating nearshore centres delivering high value, quality and low costs. This holds true for large corporations as well as small and medium sized enterprises (SMEs). We believe that in particular smaller companies can benefit hugely by building on locations such as Portugal due to the European Union (EU) regulations in place with regards to commercial and legal aspects, ease of travel or certain cultural proximities. 3.2 What you need : 1. Good people, 2. Proper preparation and expertise “how to”, 3. Ongoing tight governance Successfully building on the benefits of an offshore or nearshore sourcing in SW-development in large scale was initially a domain of corporations who were able to invest in a profound preparation. This was typically done with external sourcing advisors, who did plan and implement a long term know-how transfer and helped setting up a dedicated vendor management or sourcing governance team. If done right, cost savings of up to 40% were achieved by keeping or even improving the quality. As mentioned, this was typically implemented in larger scale projects and required a significant upfront investment. By building on the lessons learnt from larger scale programs and stripping off all tasks which are not absolutely necessary in case of downsized projects at small or medium sized companies, we have successfully demonstrated similar benefits in costs (over 30% and in some cases even over 50%) can be realised (References [7]). Besides any cost savings, first and foremost, any project shall be delivered in quality and in time. We believe there are some important aspects to be considered for such a success:
  8. 8. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 5 of 18  Build on best practices and lessons learnt by others: It is vital to leverage all lessons learnt and best practices obtained by numerous corporations during past years.  Remove any overhead, especially in case of SMEs: Especially SMEs shall strip off all unnecessary dead weight (overhead which is not required in case of smaller companies).  Avoid major upfront investments: We propose to ensure a set-up which does not require any major initial investment plus a focus on results at an early stage. This can be achieved by starting with only one team member at the nearshore location and a slow ramping up of further team members. In line with an agile development process such as SCRUM this dedicated person will be included in daily calls and a close alignment with the customers core team.  Chose the right team and partners: Carefully selecting the right team members, partners and ensuring all aspects are considered properly (skills, motivation, company cultures, options for travel, among others) is a requirement well understood.  Implement a proper governance and automate wherever possible: Working in a distributed team environment requires an even higher level of transparency about the exchange of knowledge and interim results between team members, project status, or any impediments. Besides building on proper processes such as agile (SRCUM), using a fitting set of tools to manage technical aspects as well as the communication within the team ensures efficiency and – if proper planned and implemented – a high level of automated governance. 3.3 Nearshoring – the right partner and location is important Nearshoring is a success nowadays, particularly in Europe. Still, besides the important operational aspects as already mentioned, selecting the right partner and the right location for nearshore operations is important. One impressive example for sue is the current trouble when dealing with partners in the former nearshoring star Ukraine.
  9. 9. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 6 of 18 Portugal is recognised by Gartner (for the last 3 years) as one of the 13 World’s (7 EMEA’s) developed countries with more potential to ‘perform’ as an ICT platform, regarding the perspective of providing transnational services and the perspective of a good location to invest and establish Shared Services/Competence Centres. 4 Portugal as an upcoming nearshore location The nearshore approach within the European Union appears to have been tailor-made for a country such as Portugal. This applies for various areas of business and mainly in the provision of services of integrated computer solutions. Portugal is an increasingly attractive country for nearshore outsourcing in Europe. 4.1 Modern Portugal Some facts about modern Portugal:  It dedicates investments in education and increases focus on R&I and commercial applications  Excellent geo-strategic position, and privileged economic and business relations with the seven official Portuguese-speaking countries, which makes Portugal the ideal location for businesses that aim to invest in, or export to those markets  Exports continue to show a strong growth and bureaucracy is decreasing  Contraction of domestic economy has spurred competition and competitiveness  Providing one of the Europe’s safest cities and a cosmopolitan city with Lisbon  Access to the 4 th spoken language in the world  Sustainable, creative and entrepreneurial country  Quality of infrastructures and utilities  Leadership in terms of eGovernment  One of Europe’s Atlantic Gateways At present, Portugal is in a crucial phase in his journey as a competitive nation, economically viable, with life quality perspectives, and with many companies already developing nearshoring projects. Defining the differentiating factors of national supply and to eliminate the main barriers concerning outsourcing services in local markets is crucial to improve Portuguese competitiveness, accelerate the attraction of foreign investment and promote growth of national companies. 4.2 Portugal vs Eastern Europe as a key nearshore destination Nearshoring is one of the preferred ITO sourcing approaches among European companies and this tendency is predicted to be the leading one for the next years. In contrast to offshoring, nearshoring is the transfer IT processes to companies in a nearby country, typically with the same, or close time zone.
  10. 10. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 7 of 18 [VALOR] €311,53 €405,00 €589,17 €0,00 €100,00 €200,00 €300,00 €400,00 €500,00 €600,00 €700,00 Ukraine Czech Republic Poland Portugal 2014 The CEE region is now capturing great amount of attention as an attractive outsourcing destination with more than 5,000 companies and 100,000 specialists operating in the industry of IT outsourcing and software development services in the 16 CEE countries, according to Central and Eastern European Outsourcing Association (CEEOA). For the fifth consecutive year, Portugal is part of the plot of the seven developed countries in Europe, Middle East and Africa that are leaders in providing technology-based services. The conclusion is a study published by the US consulting firm Gartner (References [8]). Portugal is referenced by international observers as a "viable/solid alternative" in the sector. More than in previous years, the country is said to be clearly developed and prepared to provide services, not only by exporting solutions from Portuguese companies, but also through foreign investment in Portugal. Portuguese companies are seen as innovative, offering above average professionals with enormous growth potential in international markets. According to Gartner, Portuguese companies know how to make the availability, quality and maturity of existing resources and infrastructure that the country has, the general business environment and political stability, and operate in accordance with the cross-evolved regulatory framework in the EU. Some key facts of Portugal in comparison to Poland, Czech Republic and Ukraine as representatives of Eastern Europe demonstrate Portugal’s capabilities. 4.2.1 Wages Technology remains a powerful job engine with no signs of slowing and Portugal has always been a pioneer of technology. The country’s background as a global trading nation has ensured that its entrepreneurs and merchants have always looked beyond its shores. With a relatively small home market, Portuguese IT firms have explored foreign markets, starting with the Portuguese speaking world and exploring other areas where its expertise and experience is suitable. Figure 4 – Minimum wages, 2014 (source: Wikipedia – List of minimum wages by country)
  11. 11. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 8 of 18 €0,00 €5 000,00 €10 000,00 €15 000,00 €20 000,00 €25 000,00 €30 000,00 €35 000,00 Ukraine Poland Czech Republic Portugal .NET SW Developer/Programmer Project Manager (IT) SW Developer SW Engineer The increase of average earnings in the IT sector is the result of the continuing high tech boom and of the perceived need to stop IT specialists from leaving to work in other countries. As pointed out, we can see the changes between different jobs in the IT sector (see figure 5). Figure 5 – Average wages in IT Sector (source: PayScale) The numbers expressed in Figure 5 give a certain hint concerning wages to be expected when sourcing from one of the countries mentioned. Still it is important to mention that especially when dealing with remote teams, fitting staff with the right mindset, attitude towards work and the necessary in depth expertise in the technical skills is a must. Quality comes with a price and the proper trade off between low wages and high skills is key. 4.2.2 Education Education and research, along with innovation, are at the heart of knowledge economies and drive long-term growth. Investments in higher education (HE), R&D and new information and communication technologies (ICT) complement each other, empower human capital and provide the infrastructure needed to address the many challenges that societies face. Figure 6 - Spending on higher education, 2000 and 2010 (source: OECD)
  12. 12. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 9 of 18 0 0,2 0,4 0,6 0,8 1 DNK SWE ISL CHE FIN NLD AUT EST PRT ISR NOR DEU GRB FRA BEL EU28 JPN OECD IRL CZE TUR ESP ITA SVN POL HUN SVK LUX Education Expenditure Of which General University Funds Herd, 2011 From 2000 to 2010, the R&D intensity of the OECD area increased slightly from 2.2% to 2.4% of GDP. Looking into details we can see that the Portuguese economy was the one that experienced the major increase in R&D intensity. In 2010 the Portuguese economy expenditure is almost similar to Poland and higher that Czech Republic. Other indicator that must be observed is the higher education expenditure on R&D. Figure 7 - Higher education expenditure on R&D, 2001 and 2011 (source: OECD) Total higher education spending on R&D (HERD) accounts for 0.4% of GDP in the OECD area and has increased in most countries over the last decade. HERD intensity in Denmark, Estonia, the Czech Republic, the Slovak Republic and Portugal has nearly doubled over the last decade. Governments rely on two main modes of direct R&D funding: institutional and project-based. Institutional funding can help ensure stable long-run research funding, while project-based funding can promote competition and target strategic areas. This distinction is addressed by an experimental indicator on modes of public funding for the higher education sector. These two indicators illustrates the investment that has been made by Portugal across the last decades in highly qualified human resources. 2001
  13. 13. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 10 of 18 4.2.3 Languages spoken Portugal Portuguese is one of the major languages of the world (the sixth most spoken language worldwide), spoken by about 200 million people on four continents. Approximately 32% of Portuguese in sum speak English whereas 75% of professionals do speak English. Many Portuguese people living in major cities such as Lisbon and Porto speak a high level of both English and Portuguese. In order to compete with the local labour market, especially to enter major multinational companies, a high competency of both languages is required and the professionals investigate in this skill. English is set to be a compulsory subject in Portuguese schools, as one of the measures to be implemented by the Ministry of Education from 2013, according to reforms it is to carry out in the education system in Portugal. Students in Portugal could chose between a range of other languages as their first foreign idiom, in a system that obliges them to learn at least two: English and one other such as German, French or Spanish. Poland Polish people stand out in Europe for the rapidly improvement in English skills. Poland’s English proficiency level has improved more than any other countries in Europe since 2007. This finding is in line with other education indicators that have tracked the country’s transformation. Students in Polish schools typically learn one or two foreign languages. Generally, the most popular obligatory foreign languages in Polish schools are English – 67.9%, German – 33.3%, French – 13.3%, Spanish – 10.2%, Russian – 6.1%, Italian – 4.3%, Latin – 0.6%, and Others – 0.1%. Czech Republic In Czech schools, the first foreign language is compulsory when one is eight years of age, typically being in the 3rd class of elementary school. However, the kids often begin with a foreign language games already in the kindergarten which means at the age of about four years. Unlike some countries of the EU the language education is not established, but mostly English is offered. Generally it can be claimed that more and more pupils learn foreign languages. This foreign language is mostly English – at elementary schools 87% pupils learn English, at grammar schools 100% and at the high schools with vocational orientation 74%. The second language is usually German, but in the last years Spanish and French have been very trendy. Figure 8 – EU Member States (source: www.eeas.europa.eu)
  14. 14. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 11 of 18 Ukraine In Ukraine, English language learning starts at primary school and continues through higher education. The Ukrainian system of education, however, is rather new. Only a small percentage of the population has graduated from the system, while the majority learned foreign languages according the Soviet educational system. During the Soviet times, learning English as a foreign language usually started in the secondary school and continued at higher educational institutions. Without evaluating the present Soviet system of English language instruction, one may expect that more than 10 years of even poor language instruction should result in a level of English language proficiency that is sufficient for communication. One other possible explanation for the data on the English language skills among Ukrainians is the lack of incentives, material ones in particular. A study of the motivation for learning foreign languages in the European Union showed that the reasons for foreign language learning are becoming more and more tied to practical benefits, such as using the skills at work (32%), working abroad (27%), and getting a better job inside the country (23%). Although geographically Ukraine may be considered close to the centre of Europe, politically this is by far not the case. Only sixteen years ago when the Soviet Union collapsed, the borders of Ukraine were closed to Western influence. This resulted in the absence of an English language environment necessary for language learning. 4.2.4 Travel Portugal Traveling from Portugal to the European Union is viable in terms of commodity and celerity. It´s easy to travel in 27 other countries with no concerns about visas and passports and also the airline connections within the country are modern and well estblished. Portugal has three international airports in the continent – Lisbon, Porto and Faro – and seven in the Madeira and Azores Islands. Regular daily flights to all major cities in the world are standard. Distance from Germany to Portugal is 1953 kilometers and this air travel distance is equal to 1214 miles. Travelling by an airplane between Germany and Portugal takes 2 ¼ hours flightime. Poland The country has one international airport in the capital Warsaw and twelve regional airports. Distance from Germany to Poland is 607 kilometers and this air travel distance is equal to 377 miles. Travelling by airplane between Germany and Poland takes only ¾ hours flighttime. Czech Republic The country has five international airports – Prague, Brno, Karlovy Vary, Ostrava and Zlín. Distance from Germany to Czech Republic is 386 kilometers and this air travel distance is equal to 240 miles. Travelling by airplane between Germany and Czech Republic takes only ¾ hours flighttime. Ukraine The country has eleven international airports – two in Kiev, Simferopol, Odessa, Donetsk, Lviv, Dnipropetrovsk, Kharkiv, Ivano-Frankivsk, Zaporizhzhya and Kherson. Distance from Germany to Ukraine is 1516 kilometers and this air travel distance is equal to 942 miles. Travelling by airplane between Germany and Ukraine takes 1 ¾ hours flighttime.
  15. 15. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 12 of 18 €126 €146 €97 €118 €0 €20 €40 €60 €80 €100 €120 €140 €160 Portugal Poland Czech Republic Ukraine Travelling by plane from Germany to Portugal, Poland, Czech Republic and Ukraine Figure 9 – Comparison of flight costs from Germany (source: analysis by the authors on www.rome2rio.com) Travelling to Portugal by plane is more or less similar to the other countries being analysed. Due to the advantageous in climate and being a major holiday destination, the opportunity to make business and also enjoy a few days in Portugal is easily to be taken. It is motivating to delight oneself with the climate and light; history, culture and tradition; hospitality; concentrated diversity that this small country in the southern of Europe has to offer after a successful day of business (see references. [9]). 4.2.5 Cultural proximity and easiness of doing business A study by the World Bank for 2014 (Reference [10]) investigated 189 countries and classified their economies by the ease of doing business. A high ranking of ease of doing business means the regulatory environment is more conducive to the creation and operation of a local company. The rankings for all economies were determined by June 2014. In terms of easiness of doing business, Portugal is in number 25th, Poland is in 32nd, Czech Republic in 44th and Ukraine in 96th. 4.3 Differentiating factors for Portugal We believe setting up a nearshore centre or investing in Portugal has several advantages. 4.3.1 Strategic access to markets The combination of Portugal’s economic openness, strong ties with the EU and unique geo-strategic location, make it a natural gateway between the EU and world markets. The country’s ties with the African continent, Brazil and transatlantic link with the USA, provide a cost effective internationalisation base.
  16. 16. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 13 of 18 Promoting a better business Environment Significant investment in Next Generation Networks, Public Administration Modernisation and on-line services. 4.3.2 Cost-competitive, qualified and flexible workforce Portuguese employees are known for their versatility and commitment to work, with a positive attitude towards the adoption of new technologies and practices. 4.3.3 Excellent environment to live and work The country has safe urban centres and suburbs that promote a freedom impression to anyone living in Portugal. All major international studies put Portuguese cities on the top of almost every European cities ranking for conducting events and conferences. Furthermore Portugal offers various benefits concerning technical aspects, e.g.  excellent training capacity with a network of quality university and polytechnic higher education, with countless courses linked to ICT;  qualified and competitive human resources in the areas of technology;  proficiency in understanding and speaking in other languages (especially English); as well as on a social contextual level. Examples are:  capacity for adaptation and predisposition of Portuguese citizens to work in multicultural environments;  the IT professionals are among the most skilled, creative and committed workforce when compared with its peers on an international basis;  proximity to a large number of developed countries with a lack of qualified human resources in technologies. 4.3.4 Infrastructure During the past decade, Portugal has invested heavily in modernising its communications infrastructure: the result is an extensive network of land, air and maritime route facilities. The quality of infrastructures is a competitiveness factor highly valued by foreign investors. When it comes to making business move forward, we have everything we need – by sea, air or land we have the necessary speed to make our customers products move worldwide. In the callcentre space, Portugal is already identified as a hot spot. Recently, the German Deutsche Well asked “Is Portugal the new 'India of Europe?'“ (References [10]).
  17. 17. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 14 of 18 4.3.5 Protection of Intellectual Property Regarding to Intellectual Property, Portugal was one of the 11 founding members of the Union for the Protection of Intellectual Property. Portugal is a signatory to World Trade Organisation (WTO) agreements and a member of the World Intellectual Property Organisation (WIPO) and of the World Trade Organisation (WTO). 4.3.6 Disruptive ideas coming from Portugal In Portugal we have conditions for nearshore and the country has already good examples of how companies can provide outsourcing services in this area. Some of the R&I work carried out in Portugal has a direct impact on the daily life of its citizens, as the ones pointed out below. Some success stories take advantage of the increasing evolution of the information technologies and of electronics which have overcome Europe in its innovative projects.  Via Verde – Integrated system of automatic toll payment in highways that has been implemented throughout the entire country;  Automated Teller Machine (ATM12) Network Service (developed by SIBS) - Innovation and universal availability of features such as mobile phone top-ups, transfers, direct debits, events ticket and transportation ticket (more than 80 operations available);  Crioestaminal - Pioneer and leading company specialised in the isolation and cryopreservation of stem cells from umbilical cord blood and 3rd in Europe in number of clients.
  18. 18. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 15 of 18 5 Interested? How we could help In case some of the topics addressed reflect your situation and the nearshoring approach is of interest, enclosed are some examples of how pliXos and ubiwhere could help:  Staffing fitting IT experts in Germany: A simple and first option to get started might be sending dedicated IT experts from Portugal to Germany and them getting an integral part of your local team. As mentioned before, this is typically no solution for very long times but fast, easy and a perfect entry point for a later nearshore set up. After having been working on your premises and with your local team, the IT experts have an opportunity to go back, remain working for you and build up and manage nearshore operations. This is a great opportunity for IT expert as well as for you. We are able to manage all administrative and operational tasks. This ranges from employment in Germany, searching for fitting candidates, checking technical and cultural skills, supporting them in relocation, initial local training, among others.  Implementing first test projects as prime contractor: In case you have task which would fit a nearshore approach but you do not want to invest time and effort or to take the potential risks of implementing such a project yourself, you can rely on taking over the project as prime contractor (“Generalunternehmer”). You get one local partner with a German onsite project management and the takeover of the responsibility. We will manage the interaction with the nearshore team. After the first successful deliverables you can take over from us, as it fits your expectations.  Setting up a dedicated nearshore development team: In case you have certain concerns about the benefits and want to set up a dedicated nearshore centre closely controlled by you and aligned with your goals, we are able to help. This might range from identifying appropriate locations, searching and hiring fitting team members as well as managers, setting up the infrastructure, getting the administration and legal tasks done as well as to continuously supporting in the management of the remote centre. Important to keep the control, effective governance and ensure the Intellectual Property (IPR) remain with the originator (e.g. in Germany). These are just examples. We are happy to discuss your specific requirements. Contact us at nribeiro@ubiwhere.com and joerg.stimmer@plixos.com.
  19. 19. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 16 of 18 6 References [1] Engpassanalyse 2013, Besondere Betroffenheit in den Berufsfeldern Energie und Elektro sowie Maschinen- und Fahrzeugtechnik, Bundesministerium für Wirtschaft und Technologie (BMWi), 11019 Berlin (www.bmwi.de) [2] VDMA: Fachkräftebedarf nachhaltig sichern, Der VDMA hat die Politik aufgefordert, ihren Beitrag zur langfristigen Sicherung des steigenden Fachkräftebedarfs erheblich zu verstärken, www.vdma.org from 07. February 2015 [3] DIE ERGEBNISSE IN DER TRENDMONITOR-ANALYSE, February 2013 extracted from www.computerwoche.de [4] A.T. Kearney Digital Business Forum in Berlin in November 2014, http://www.atkearney.com/web/digital-business-forum-executive-roundtable-2014-berlin/agenda [5] Simulation with https://www.destatis.de/bevoelkerungspyramide/ [6] “Migration von Fach- und Führungskräften nach Deutschland”, Ergebnisse Unternehmensbefragung, Bitkom Research GmbH im Auftrag von LinkedIn Deutschland, Österreich, Schweiz, Berlin, 16. September 2013 and 12. August 2014, http://www.bitkom-research.de or http://www.slideshare.net/linkedindach/linked-in-bitkommigrationsstudiefinal [7] One example is pliXos itself which builds on nearshore software development for its own SaaS product suite and has a Joint Venture in Kolkata, India for dedicated own tasks and further customer projects. Cost saving of 50% were achieved in many cases in pliXos and customer projects. [8] “Leading Offshore Services Locations in EMEA, 2015: Nearshore Increases Despite Geopolitical Concerns“, published in December 2014 [9] National strategic plan for Tourism – Fostering the development of Tourism in Portugal - http://www.turismodeportugal.pt/english/TurismodeportugalIP/AboutUs/Anexos/PENT%20VER%20I NGLES.pdf [10] Economy Rankings – Ease of doing business, published by the World Bank Group in June 2014 http://www.doingbusiness.org/rankings [11]http://www.dw.de/is-portugal-the-new-india-of-europe/a-17266320
  20. 20. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 17 of 18 7 The authors 7.1 Nuno Ribeiro Nuno is the founder and MD of Ubiwhere which is headquartered in Aveiro, Portugal. Ubiwhere’s main objective is to research and develop bleeding edge technologies, to design state-of-the-art solutions and to create valuable intellectual property. With strong knowledge in IT business development, Nuno has been developing important synergies with leading companies that have perceived the added value that Ubiwhere’s team can bring to a project. He can be reached at nribeiro@ubiwhere.com or +351 914641450. Ubiwhere aim is to Research and develop bleeding edge technologies, design state-of-the-art solutions and create valuable intellectual property. Our customers can rely on a fully committed, skilled and very empathetic team. Our approach is mature but at the same time we are flexible, always having in consideration our customer's requirement and needs. That flexibility that we have is the key to the success of nearshore approach. The successful exploitation of innovative ideas comes from our ability to imagine and develop new tools for dynamic and challenging environments. In addition to investing our own resources in researching effective solutions for our clients, we work with other industry-leading companies and universities in order to make the most out of our capabilities and expertise. Our R&I process and expertise cover idea generation, planning, designing, developing and testing, so that we are perfectly equipped to embrace any challenge. For further information on ubiwhere please have a look at www.ubiwhere.com. 7.2 Joerg Stimmer Joerg has successfully implemented numerous offshore and nearshore outsourcing projects in past years, being responsible at customers side, in charge at the service provider or supporting customers in form of an external consultant. Furthermore he is actively engaged in combining offshore/nearshore outsourcing in SW development with applying agile methodologies (mainly SCRUM) plus supporting team collaboration and governance by tool integration. He is founder and managing director of pliXos, a venture capital backed SW startup offering a comprehensive Software as a Service toolchain to industrialise IT outsourcing, especially when applying distributed teams. This is extended by a free global B2B Marketplace for SW projects. He can be reached at joerg.stimmer@plixos.com or +49-89-44234770. pliXos is his way of actively pursuing his vision of how successful SW sourcing will take place in future:
  21. 21. Nearshore SW Development in Portugal | Nuno Ribeiro and Joerg Stimmer © Ubiwhere and pliXos Page 18 of 18 For further information on pliXos please have a look at www.plixos.com. Ubiwhere Headquarters Rua Pedro Vaz Eça 6ª 3800-322 Aveiro, Portugal info@ubiwhere.com +351 234 484 466 www.ubiwhere.com CONTACTS pliXos GmbH Munich Technology Centre (MTZ) Agnes-Pockels-Bogen 1 80992 Munich, Germany info@plixos.com +49 89 44234770 www.plixos.com