Research reveals huge appetite for IT outsourcing

Over three quarters of Europe’s corporates in terms of IT spending will either outsource more this year or continue with current amount while only 10% will reduce IT outsourcing, according to research

More than three quarters of Europe’s big businesses will either outsource more IT spending this year or continue with current amount, while just 10% plan to reduce IT outsourcing, according to research.

The study of 1,300 businesses in Europe from Whitelane Research revealed that 42% of organisations will outsource more IT in 2014 compared to 2013 and 36% will outsource the same amount. Only 10% said they will outsource less IT and 12% said they currently don’t outsource IT.

The main reason for IT outsourcing for those that do so was to cut costs (69%). Just over half (52%) said that by outsourcing IT they can focus on their core business, 47% wanted access to more resources, 43% wanted higher service quality, 35% financial flexibility and 25% outsourced IT to support business transformation.

“Cost reductions are the main driver for those companies that decide to outsource more. Non-cost based drivers are also important with focus on core business, access to resources and improvement of service quality cited by almost 50% of organisations,” said the research report. 

The research revealed that 9% of the companies outsourced were very satisfied with the outcomes, 41% said they were satisfied and 29% were somewhat satisfied. A total of 15% were somewhat unsatisfied, 5% were unsatisfied and 1% were very unsatisfied.

It also revealed that Indian heritage IT services firms dominate the top of customer satisfaction tables with four of the top five having the majority of staff in India. In fact, Tata Consultancy Services (TCS) was ranked number one out of 22 UIT services firms measured. 

TCS was the only supplier to achieve the status that customers were satisfied with all others being in the somewhat satisfied group. Suppliers were ranked using nine key performance indicators.

The research found that satisfaction with suppliers is leading to private sector firms doing more business with sole suppliers. “Overall, the service provider community shows strong satisfaction performance with 87% satisfied with their outsourcing contract. With the exception of the public sector, Whitelane recommends that this results in more sole sourcing renewals wherever possible,” said the report.

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