Outsourcing: Equaterra report shows UK market continues to grow

News Analysis

Outsourcing: Equaterra report shows UK market continues to grow

Karl Flinders

An in-depth study of 220 corporates and 660 IT outsourcing deals in the UK has revealed increased satisfaction with outsourcing contacts and a bigger appetite for outsourcing next year.

The study, carried out by sourcing consultancy Equaterra is in its fifth year. It looks at service provider performances in the UK but also reveals information about the outsourcing strategies of large UK based companies.

Lee Ayling, managing director at Equaterra, said there is evidence of an upturn in the economy because of sharp increases in the use of outsourcing for reasons other than cost cutting.

Click here to dowload a management summary of Equaterra's latest research into IT outsourcing. (Requires registration)

Although this was still the main reason for outsourcing, there were marked increases in importance for almost every other traditional driver. These included financial flexibility and access to skills.

"During the recession we saw that technology outsourcing increased but the driver was taking cost out but this year other drivers increased," said Ayling.

The research also reveals the relative performance of suppliers measured against different key performance indicators (KPIs). These were: general satisfaction; quality; price; risk; operational relationship; strategic relationship; innovation; flexibility; service provider governance; and successfully delivered transition.

Three Indian suppliers headed the general satisfaction list. Wipro was top followed by Mahindra Satyam and Cognizant. Orange Business Services came last, with BT and Accenture joining it in the bottom three. Supplier performance is measured in relation to each other.

There was a continued move towards multi-sourcing, with an average of 3 suppliers used by each business, compared to 2.4 reported in the study last year.

The sample

Businesses surveyed came from across sectors with over half from a combination of the financial services, manufacturing and consumer goods sectors.

Satisfaction with outsourcing contracts

The study revealed that 57% of respondents were satisfied with their outsourcing agreements, compared to 51% last year.

Outsourcing plan for next year

Slightly more companies plan to increase their outsourcing, with 61% expecting it to increase in the next year compared to 59% last year.

What they outsourced

Infrastructure management is the most common process to be outsourced, with 70% of respondents outsourcing this.

Application management is outsourced by 62% of companies interviewed, while 47% outsourced end user management and 19% business process management.

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