SYSTEMS is a large IT trade fair held annually in Munich (Germany). It has been widely considered as the second most important IT fair in Europe (after CeBit). SYSTEMS is a solution oriented, B2B exhibition for the IT, digital media and telecom sector. SYSTEMS is also one of the five largest ICT exhibitions in the world.

SYSTEMS 2004 was held 18 - 22 October 2004.

SYSTEMS 2005 will be held 24 - 28 October 2005 at the New Munich Trade Fair Center.

Connect to other European and global IT trade fairs and outsourcing events at the EuroITX Resource Center.

Key to SYSTEMS 2004

A major trade fair for offshore IT service providers from Central and Eastern Europe

Number of exhibitors (1,289 companies) remains stable at last year's level

Consistent focus on IT decision makers and executives attracted some 67,000 trade visitors

Large number of business transactions are conducted during fair

SYSTEMS 2004 confirms BITKOM's positive market development assessment

SYSTEMS clearly showed signs of IT sector recovery in Germany.

SYSTEMS, unlike other IT trade fairs in Europe, does not focus on the amount of exhibition space sold or the number of visitors. The criteria for success are the business transactions that exhibitors prepare and actually conclude with visitors at SYSTEMS. This business model emphasizes the return on investment (ROI) that exhibitors and visitors achieve.

In 2004 there was another increase in the number of exhibitors from Central and Eastern Europe, who now account for approximately 10 percent of all SYSTEMS exhibitors. There was also a 20% increase in the number of exhibitors in the sector for IT security. Despite the fair's clear focus on IT decision makers, managing directors and upper-level management, the number of visitors was not considerably lower than in 2003.The number of managing directors and CIOs as well as upper-level managers from small and medium-sized enterprises and major corporations was higher than in 2003. Approximately 10 percent of all visitors were from countries other than Germany.

The timing of SYSTEMS (late autumn of every year) is quite favorable for decision makers (and to meet decision makers) as this is the time when budgeting and investment decisions are made for the next year.

Approximately one-third of the visitors go to SYSTEMS to prepare for or actually make investments in IT and/or telecommunication.

The exhibition areas

Software, Systems & Integration

Digital Media & Technology

Telecommunications & Networking

Office & Peripheral Technology

Offshore service providers from CEE

SYSTEMS has become probably the most important European trade fair for offshore IT service providers from CEE. Bulgaria, Romania, Czech Republic, Hungary, Yugoslavia and Slovenia presented the most exhibitors. Other countries, such as Croatia, Macedonia and Poland, also showcased their IT sector capabilities, even though with less exhibitors.

To underline the Central and Easter European focus SYSTEMS also featured the East - West Business Forum, with the ‘International Partnering Conference’, a direct matchmaking forum. The business forum program included various presentations;

World Bank presentation on its sector specific programs

Managing offshore outsourcing relationships and projects

Country presentations

Marketing offshore services in Western Europe

Risks and rewards in offshoring

Unlike last year, the business forum attracted quite a number of visitors, showing clearly that German companies are looking for offshore outsourcing opportunities in CEE.

Offshore - nearshore context

SYSTEMS is (one of) the major IT trade fairs focusing on B2B interaction and decision makers.

SYSTEM is about business processes and various business domains.

SYSTEM is a "European" trade fair creating market space for offshore IT service providers from Central and Eastern Europe. Companies from Asia did not participate at all.

The offshoring picture in Central and Eastern Europe

Countries and companies sometimes do not have a clear and most importantly visible value proposition. Companies not always know how and what to offer, what to show, how to present and what to expect from the trade fair.

Macedonia and Yugoslavia have made steps to organise their respective IT sectors and offer nearshore IT services. A lot still has to be done though. Vital information is not available and not visible about the IT sector. Companies have limited experience presenting their capabilities and not quite aware of the various elements of the outsourcing process.

Hungary and Poland did not have a clear message and value proposition at the fair. Pure cost wise these two countries are getting less attractive. In Poland, according to one of the Polish exhibitors, the domestic market is strong and growing which makes offshore outsourcing less interesting for many companies.

The Czech Republic is becoming one of the offshore (nearshore in fact) hotspots in Europe. Offshoring to the Czech Republic is promoted largely by CzechInvest. Read the latest news about offshoring to the Czech Republic here.

Hungary and the Czech Republic is on the radar of major offshore IT outsourcing firms from India. They set up representations and  (captive) development centers in these countries to offer nearshore services to West European clients while enjoying all the benefits of EU membership, low labor and overhead costs, high quality education system and world class infrastructure.

Romania is emerging with a strong nearshore offer. Country promotion is supported by ARIES. The Romanian value proposition is quite clear;

High level and high quality education

Research capabilities

Languages

Close geographical and historical ties with Europe

Cultural affinity

Offering offshore (nearshore) IT services in Germany

Companies in Germany are looking at outsourcing seriously. Even SMEs are practicing outsourcing – mostly near shore.

Major market constraints and fear factors are:

Cultural, language and business practice (management) differences

Loosing control and oversight

Inability (or fear) to break processes

Key areas of offshore IT outsourcing

Legacy system maintenances

Software development

EIP integration

SAP/ERP development and customization

Data warehouse and document management

Migration

The distinction is very clear between offshore (India, China, Philippines, Russia, Mexico, Canada) and nearshore (Central-, Eastern Europe - CEE, Ireland, Egypt, Israel).

India and South East Asia:

The overall process maturity is about CMM Level 2 or 3 in CEE while Level 3 – 5 in India

Indian firms are buying smaller companies in Germany in order to create a “language interface” as well as use them as support, marketing and contracting platforms.

Companies in Germany experienced serious cultural issues in India and SEA.

Central and Eastern Europe

Cultural affinity

Geographical distance

Language capabilities

European business domain knowledge (automotive, textile, etc.) with historical foundation

Universities and research institutions are participating in IT outsourcing as well as branding their respective country.

Higher costs than in India or SEA.

Lower overall process maturity level and less experience with offshore processes and management issues

Key success factors for offshore service providers in Germany

Communication and language skills

Availability of long term goals

Single Point Of Contact (SPOC)

SLA and cost control

Change management process

Flexibility in pricing and contracting

Account management in German