2024 German IT Sourcing Study
The 2024 German IT Sourcing Study is Whitelane’s most comprehensive survey, with over 280 participants from Germany’s top IT-spending organisations. This year’s report offers unparalleled insights into the leading IT service providers and cloud platform providers, evaluating over 900 unique IT sourcing relationships and more than 850 cloud platform relationships.
An Increasing Number of Clients Expect to Spend Less with IT Providers
In 2024, 29% of organisations plan to spend less of their IT budget on external providers in the next two years, marking the highest percentage in Europe and a significant rise from 19% last year. Meanwhile, 27% of organisations plan to increase spending on external providers, a slight drop from 30% in 2023. An additional 31% predict no change, while 13% are still unsure about their future sourcing plans.
Clients Planning to Spend More with IT Providers Seek to Focus on Core Business Operations and Innovation
Organisations increasing their IT budgets are motivated primarily by a desire to focus on core business operations, cited by 56% of respondents. Access to innovation is the second-most important factor, mentioned by 42% (up 15% from last year). Cost reduction and access to talent are also key, with each being cited by 41% of respondents.
Clients Planning to Spend Less with IT Providers Largely Expect Insourcing to be More Cost Attractive
Among the 29% of respondents planning to reduce external IT spending, the leading reason is cost-efficiency, with 58% finding it more economical to manage IT in-house. Knowledge retention ranks second (44%), as companies aim to safeguard expertise and reduce third-party reliance. Additionally, 41% cite faster time-to-market and improved quality as benefits of insourcing.
Continued Growth in Nearshore Outsourcing
Nearshore outsourcing is expected to grow significantly, with 44% of organisations planning to increase this delivery model. Only 9% expect a reduction, and 47% foresee no change, reflecting the appeal of nearshoring for its balance of cost-effectiveness and geographic proximity.
Top Investment Areas for CIOs: Automation and Security
For the second consecutive year, automation leads client IT investment priorities, with 68% of organisations focusing on process automation. Security is the second key investment area for 63% of organisations, as they prioritise enhancing resilience and cyber defence. Cost-saving initiatives rank third, with 57% investing in solutions to optimise expenditures and improve IT resource efficiency.
Current Impact of AI and Generative AI Remains Limited
13% of respondents have seen a significant or transformational impact of AI or Generative AI on their business operations. This means that 87% of organisations do not see a significant impact of AI on their business today: 48% see a minor impact, 22% are only experimenting with AI, 13% indicate they do not use AI, and 5% are unsure.
Decreased Client Satisfaction in Germany, Compared to Last Year and the Rest of Europe
The 2024 general satisfaction ranking includes 35 IT service providers in Germany. NTT DATA retains the top spot for another year with an 81% satisfaction score, followed closely by HCLTech and EPAM at 80% and Stefanini, TCS, and CGI (all three at 78%). The average satisfaction score dropped to 72%, the lowest in Europe, reflecting broader challenges in client satisfaction.
This year’s ranking includes newcomers such as BT, CANCOM, Deutsche Telekom, msg global, Orange Business, Stefanini, Verizon and Vodafone.
2024 General Satisfaction Ranking (Top 5)
Exceptional Performers
Thirteen service providers have achieved exceptional performance in one or more IT service towers, with satisfaction scores exceeding the market average and above the standard deviation:
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General satisfaction: CGI, EPAM, HCLTech, NTT DATA, Stefanini, TCS and Wipro
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Application services: CGI, DATAGROUP, EPAM, HCLTech, NTT DATA and TCS
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Digital transformation: Bechtle, CGI, Cognizant, NTT DATA and Wipro
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Cloud & infrastructure services: Capgemini, DATAGROUP, NTT DATA, TCS and Wipro
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Workplace services: DATAGROUP and Stefanini
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Network & connectivity services: Deutsche Telekom, Infosys and NTT DATA
Cloud Platform Rankings
Among the 850 cloud platform relationships evaluated, 55% were rated as satisfied or very satisfied, a 9% decline from last year. Microsoft Azure leads with a 75% satisfaction score in the infrastructure cloud platforms ranking, followed by Amazon Web Services (AWS) and Google Cloud Platform (GCP) at 74%. In software cloud platforms, ServiceNow and Microsoft Dynamics 365 are top-ranked (70%), followed by Salesforce (69%).
2024 Satisfaction
55%
2023 Satisfaction
64%
2024 German IT Sourcing Study – Final Report
The 2024 final report encompasses the latest sourcing and governance trends for Germany. It includes rankings by six IT service towers, Key Performance Indicators spanning four dimensions, and cloud platform provider rankings. For further details, please contact info(@)whitelane.com (available in both German and English).
