2024 Nordic IT Sourcing Study
The 2024 Nordic IT Sourcing Study represents the largest survey to date. With more than 450 participants from the region’s leading IT-spending organisations, this year’s report provides insights on the top-performing IT service providers and cloud platform providers, with over 1,000 unique IT sourcing relationships and more than 1,300 cloud platform relationships evaluated.
Significantly more organisations plan to increase spending on IT Service Providers.
28% of respondents plan to increase spending on external IT providers, marking an 8% rise compared to last year. The percentage of organisations maintaining the same level of external IT providers has decreased by 11%, from 47% to 36%. 22% of clients plan to spend less of their IT budget on external providers, the highest figure in Europe, while 14% are undecided. Financial attractiveness is now the primary driver for insourcing, showing a 16% increase from the previous year.
28%
Scalability re-emerges as the primary driver and cost reduction no longer in top 3.
Scalability re-emerges as the primary driver for organisations planning to allocate more of their IT budget to external providers (54%). This is a reflection of heightened (economic and geopolitical) uncertainty: clients increasingly want the flexibility to scale up or down depending on the future. Access to resources and talent drops to second place (50%), followed by focus on core business (37%). Cost reduction has fallen out of the top three drivers, declining significantly by 16% and indicating that clients are now prioritising strategic outcomes beyond purely financial considerations.
Security and automation top the agenda, with significant investments in AI/Machine Learning.
Security remains the primary focus for investment, with 63% of clients intending to increase security measures and cyber defence capabilities over the next two years. Automation follows at 57%, while 52% are planning investments in solutions to optimise expenditure. Investment in AI/Machine Learning solutions has increased by 24%, indicating a recognition among clients of the competitive advantage that AI technologies offer.
Top 3 client investment areas:
Most organisations experimenting with AI/GenAI or are using it with minor impact on business.
The survey indicates a diverse landscape in AI/GenAI adoption among organisations: 31% of companies are experimenting with it, while 43% already use it, albeit with only a “minor impact” on business today; 6% of organisations see a significant impact of AI and 2% indicate that AI/GenAI has already transformed their business operations.
38% of organisations expect nearshore growth, but capacity may be an issue.
Demand for nearshore delivery is up significantly: 38% of organisations expect nearshore to grow (versus only 8% who predict a decline). Capacity in nearshore will not be able to cater to this significant increase in demand, and clients should be aware that pressure on rates and attrition will likely increase. Nearshore demand is highest in manufacturing (44%) and lower in the public sector (24%).
Client satisfaction with IT sourcing relationships:
65% of the 1,012 evaluated IT sourcing relationships received a satisfied or very satisfied evaluation. Norway has above-average satisfaction with 70%, while Finland lags with 59%.
Norway
70%
Finland
59%
Exceptional performers
Ten service providers have achieved exceptional performer status across one or more IT service towers/countries, with satisfaction scores exceeding the market average and above the standard deviation. The exceptional performers are:
IT Service Towers:
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Digital transformation: Accenture and EPAM
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Cloud & infrastructure services: TCS and Accenture
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Workplace services: TCS
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Network & connectivity services: TCS and Elisa
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Security services: TCS, Orange Cyberdefense and DXC Technology
General satisfaction (Overall and by country):
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Overall: TCS, Accenture, EPAM and Wipro
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Denmark: TCS, Accenture, DXC Technology and Cognizant
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Finland: Infosys and ATEA
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Norway: TCS and Accenture
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Sweden: TCS, Accenture, Wipro and EPAM
Cloud platform providers
Among the 1,311 cloud platform relationships evaluated by clients, 57% were rated as satisfied or very satisfied, marking a 15% decrease from the previous year. Notably, the ‘very satisfied’ category dropped from 18% to 8%.
Microsoft Azure remains at the top of the infrastructure cloud platform ranking, scoring 76%, while Microsoft Dynamics 365 leads the software cloud platform ranking with a 72% satisfaction rating.
2024 Overall Satisfaction
57%
2023 Overall Satisfaction
72%
2024 Nordic IT Sourcing Study – Final Report
The 2024 final report encompasses the latest sourcing and governance trends for the Nordics (overall and by country). It includes rankings by six IT service towers, Key Performance Indicators spanning four dimensions, and cloud platform provider rankings (overall and by country). For further details, please reach out to info(@)whitelane.com.
