* CEO says likely to hit offshoring target ahead of time
* Some small operations still to be sold, no active sales
* Believes in econ recovery, but consumer confidence fragile
* Sees no impact from Norwegian EDB-Ergo merger
(Adds quotes, details)
By Tarmo Virki, European technology correspondent
HELSINKI, Aug 23 (Reuters) - Top Nordic IT services firm
Tieto <TIE1V.HE> will likely be ahead of schedule in
transferring jobs to lower-wage countries as it looks to cut
costs and fight off increasingly global competition, its chief
said.
Tieto offers its clients -- including top global firms Nokia
<NOK1V.HE> and Ericsson <ERICb.ST> -- services ranging from
running their data centres to developing tailored software.
Globally Tieto is amongst the top three providers for the
telecoms industry, along with Wipro <WIPR.BO> and Aricent.
"We aim to keep that position," Chief Executive Hannu
Syrjala told Reuters in an interview.
Tieto aims to have 40 percent of staff in lower-cost
countries like India, China, Poland and the Czech Republic by
the end of 2011.
"We will likely reach it ahead of target as the development
has been so fast," Syrjala said.
"Due to the financial crisis, the IT industry has changed
and the competition has become global. The price competition is
tough."
Tieto had 34 percent of staff outside Finland at the end of
June, compared with 19 percent at start of 2008 when Syrjala
took over at the company.
For most European IT services providers -- which focus on
more local sectors than Tieto -- only some 20 percent of staff
are in emerging markets.
FRAGILE CONSUMER CONFIDENCE
Syrjala said the financial crises of southern Europe has
made companies more cautious and consumer confidence was
fragile, but he was confident that economic recovery is
happening.
"I believe the recovery is taking place, but it could be
slower than some public forecasts. I don't think another
recession, a double dip, is likely, but consumer confidence
could easily weaken," he said.
Tieto has sold some non-core operations and made a few
bolt-on acquisitions under Syrjala.
Syrjala said the company has not ruled out further
acquisitions, while it also had some small parts which could
still be sold.
"There is nothing urgent," he said.
When asked about divesting the business unit servicing the
financial sector in Britain, long rumoured to be on the block,
Syrjala said: "We are not actively selling it."
Syrjala was unfazed by the merger of Norwegian firms EDB
Business Partner ASA <EDBASA.OL> and unlisted ErgoGroup AS.
They agreed in June to create a Nordic IT services company
of similar size to Tieto, whose key rivals are Indian firms like
Wipro, Aricent and Infosys <INFY.BO>, and global players like
IBM <IBM.N>. []
"It will not impact us," Syrjala said.
Norway's competition authority is to make a final decision
on the EDB-ErgoGroup deal at the latest on Dec. 3.
Tieto generates around half of its turnover in Finland, and
its single largest shareholder is Finnish state investment
vehicle Solidium, which owns 10.3 percent.
(Editing by David Cowell)
