21
Nov

SPAIN, THE NEW “EUROPEAN INDIA” IN IT?

Escrito el 21 noviembre 2010 por Jesus Guerro en General

Spain is living a fact that is worthy of mention and study. While unfortunately, the Industry is suffering a process of investment dislocation, a significant number of large global companies have chosen Spain for the location of IT Shared Services Centers (i.e.Cemex, Holcim, Roche, Daimler Benz, Sanoffi Aventis …etc) where IT architecture models are designed to provide infrastructure, development and support services to various administrative and production Centers globally distributed. Also, the so-called Software Factories, most of which respond to a subcontracting deal by the Client companies in the areas of development, help desk and evolutionary information systems with global consulting firms in charged of managing all these services. Companies like IBM or Accenture where 40% of its 200,000 employees work in such centers, rule this business model, although other smaller companies also provide excellent services so that, gaining market share.
The area of action and influence of these centers located in Spain, both Corporate Shared Service centers and Software Factories are usually limited by the EMEA region (Europe, Middle East & Africa).
Thus, the geostrategic position of Spain with regard to territories around the Mediterranean on one side (from off-shore to Near-Shore) and the excellent quality standards of Spanish IT Professionals related to their costs on the other side, have allowed Spain to become in some way the “European India”. In other words, the ideal location to build and manage EMEA Near-Shoring Information Technology projects.
Not surprisingly, the costs in Spain account for 50% of those represented in the United Kingdom and the quality of Spanish computer professional efficiency and performance overcomes the European average. Moreover, Spain is at the head of Software Factories in number of Standard CMMI certified Centers, and Gartner has placed Spain among the top 20 countries in this activity.
Three regions: Madrid, Castilla y León (with its important Technology Center in Valladolid) and Andalusia host 60% of the more than 100 factories operating software in Spain today.

The growth of these development and support centers is highly significant, since this activity has grown at rates exceeding 20% over the past 5 years.
Far from being affected by the crisis, the need for companies to reduce IT management costs strongly favored the proliferation and growth of these centers of Off-Shoring. As example, a Spanish technology company Indra , employs more than 3,000 people in this activity.
These IT centers offer economies of scale through synergies in hardware and infrastructure investments (Data Centers and Networks) that allow them to share resources among multiple clients optimizing their financial performance. Thanks to improved Work Loan organization, IT professionals can better optimize their knowledge offering its service to various companies in parallel.
These centers are focused  depending on the target sector in some cases or on the type of technology or applications to which they support, in rest of cases.
However, this new industry is not protected from dangers or threats. On the one hand the delay that Spain continues to suffer in terms of language skills compared to competing countries (even in English) and on the other hand, the certainty that Spanish IT professionals have on increasing significantly their rewards and compensation north beyond the Pyrenees.

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