European IT providers are better-positioned than their US competitors for long-term sales and earnings growth, according to a study conducted by German strategy consultants Roland Berger.
According to the study, European IT providers outperformed US rivals in both sales and earnings growth in the 1998-2007 period. They also compared favorably to Japanese competitors.
Roland Berger cited European companies' long-term orientation and a "desire to bring all the stakeholder interests on board" as key factors behind the positive performance.
The study, titled "Next-generation IT providers - The European way," recommended that, in line with the title of the report, IT providers should build on specifically European strengths.
There's no reason for European companies to copy US or Indian competitors, said Carsten Rossbach, a Roland Berger partner.
Another Roland Berger partner, Markus Puttlitz, said in a statement: "We have traced the success of the European IT providers to a distinctively European 'corporate DNA.'" He noted that, while US providers tend to focus heavily on sales, Europeans have "a much sharper focus on technology and relationships." Puttlitz added that European IT providers are "rather conservative" in their promises, which often leads them to exceed expectations. Non-European providers often promise too much and disappoint the customer.
In addition, Puttlitz said, European providers' high technical expertisetends to build trust.
Roland Berger said Europeans are at a disadvantage when it comes to speed, innovation, flexibility and responsiveness to market trends. But their longer term orientation helps overcome these disadvantages.
Puttlitz said European IT providers should build on their strengths by learning from non-European competitors too. The Roland Berger strategist said these new insights could include giving sales its rightful seat at the management table, adopting a more pragmatic way to develop solutions, more innovative thinking and increased flexibility." Said Puttlitz: "It's worth learning the lessons here."
By Arjen Bongard