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General information: what are you up against?
The German market is not an easy one for Indian or Chinese (or in fact any) offshore outsourcing companies to penetrate.
To tell you otherwise would be a plain lie.
What we can tell you is that we've witnessed more than one disappointed offshoring outsourcing vendor backing out of Germany, licking their wounds. Some left in a hurry too, eager to cut losses as soon as possible.
Many had invested fat budgets and enjoyed a strong overseas corporate backing to help them set up a local presence.
But that hadn't helped them.
What have they done Wrong and What can you Do Right?
We could talk to you for a long time about it all. (See our Teleseminar program). However, principally we can say they tried it with a total lack of understanding of the way the locals think and of the way things work here. They had not addressed the underlying reasons for objections, had not bothered educating their customers or consulting them in a targeted manner.
Germans are not merely concerned about trying out new outsourcing solutions, but are faced with complicated labor-laws and workers-unions to deal with, and are concerned about their public image, locally.
The common public notion prevails, that outsourcing offshore is a big no-no, that would result in contributing to the growing unemployment problem - a most unsocial thing to do and bad public image of corporate or home-brand.
The simple fact is that globalization is gathering speed and can’t be stopped. It is also a fact that global-sourcing (outsourcing- offshoring) is the way all corporates and even more and more small to medium companies are headed.
According to latest research by McKinzey, findings show that unlike the US economy which earns from global sourcing, the German economy actually loses money. (This does not mean the outsourcing offshoring corporates themselves lose money...).
It is due to the inability of German employees to redeploy as well as - for example - their USA counterparts do. The inability of the strict German labor-law system to adapt to the unstoppable changes the country will undergo, also contributes to the fact the German economy currently loses money on every Euro that is off shored, on every job lost to offshoring / global sourcing.
Offshoring could create new wealth for Germany, but only if it makes the structural reforms needed to increase its reemployment rate. The drain of wealth would end and offshoring/ global-sourcing would be perceived in a more positive light by the Germans.
Other concerns Germans businesses have are over poor quality of workmanship, cultural difficulties, language shortcomings and therefore misunderstandings when dealing with foreigners, problems getting things done on time or in the way they are used to.
Hence, it has been a slow start getting German companies to outsource offshore their IT (or other) needs.
Nonetheless, strict German labor-laws concerning the laying off workers and creating new job categories mean that German companies have trouble adjusting their use of local labor. As a result, the Germans are more likely to face poor labor utilization rates and imbalances in supply and demand.
Taking advantage of global-sourcing / offshoring, i.e., the use of foreign & cheap labor offshore or near-shore, gives German companies more flexibility for experimenting with new ideas and responding to market changes.
This makes them more likely to be competitive and survive globalization.
Global sourcing / offshoring can also create a new flexibility, helping German companies meet fluctuations in demand, thus bypassing the thicket of labor laws at home when facing hiring/ firing labor
Germany’s rapidly aging populations and negative birth-rate means that offshore labor will be increasingly needed in coming years to make up for a dwindling workforce.
MGI research on demographic trends around the world indicates that over the next 15 years, Germany’s workforce will decline by two million, while at same time the elderly population will grow by five million (and will have to be supported by remaining workers).
Germany will have no choice but to raise the productivity of those left in the workforce dramatically. This would most likely be possible only if they are shifted to higher level positions while the lower level ones get done cheaper and plentifully elsewhere.
In the same manner Germany had invited in the past so many millions of foreign workers "GastArbeiter" mainly from Turkey and the Balkans, there will soon be no choice but to do so again and in increasing industries. The attempt in past years to import labor from offshoring destinations does not fit the bill as far as significant cost reductions for the corporates. However, outsourcing business processes to workers abroad can help.
In order to keep competitive there will be no other way but for German corporates to participate in the global-sourcing / offshoring wave.
Recently, the German Market has begun to open up to outsourcing offshore.
Prognosis for 2006 is +€800 Million worth of German business contracts.
Learn from the experts- solutions that help German enterprises outsource >>
EU- German market prognosis and trends 2006 summary >>
It is absolutely vital you too are well positioned this coming year for getting your share of the offshoring cake!
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Get in touch with The GERMAN MARKET OUTSOURCING EXPERTS >>
(Contact us now by clicking this link above)
Global-Sourcing. EU Business Development Services
We have a growing partner-network of experts big and small, who are well experienced in targeted marketing in the offshoring field and who have a strong comprehension of cross-cultural mentality differences as their core strengths.
Our marketing network is a dynamic and confident team of resourceful offshoring marketing professionals with vast international exposure.
Our partner's services are designed to identify targets, manage meetings and propose/ market your offer.
OutsourcingMonitor.EU offers our offshoring vendor customers precise, agreed and reportable business development advice which is available in single or mixed modules and range from market analysis to business and account development.
you get A structured approach that gets you real results!
Remember: It is a known fact that the mass telemarketing to high numbers of companies and their decision makers can not generate value if done by call centers.
Such companies receive hundreds of calls every month and are now completely blocked to this kind of random approach. It is, in our opinion, faster and more effective to target them via a trusted source they already know and are open to.
In addition, we connect you to a databank of German, Austrian & Swiss (DACH countries) corporates with direct access to the right decision makers.
Our partners have spent years in developing this asset, which they keep spending much resources in keeping updated! Send us your inquiry >>
Our Partner's German, Austrian & Swiss (DACH) Market Entry Services
OutsourcingMonitor.EU brings you together with the right partner (matchmaking) at absolutely no cost to you!
Our DACH market-entry specialists can offer you one or all of the following:
- Analyzing your product and advising you on whether it is fit for German market. Using standard evaluation methods plus qualitative network intelligence.
- Deep, up to date database:
- Do-it-yourself solution or
- Helping you engage with a large number of the right people very quickly. You get a selection of an agreed number of companies in specific vertical sectors or horizontal requirements that get contacted on your behalf, by trusted known source with an existing relationship to targets.
- Business Development: Helping you to speak and meet with the right buyers in your target market. Creating a sales pipeline.
- Managing the sales-pipeline until a qualified deal status is reached.
- Business Partnering: Helping you manage a closed deal relationship.
for further information Click this link now to email us your request.