2023 UK IT Sourcing Study Results Published
The 2023 UK IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, investigates more than 750 unique IT sourcing relationships and 1,440 cloud sourcing relationships held by over 300 participants of the top IT spending organisations in the United Kingdom.
Sixty-three per cent of organisations in the UK plan to outsource at the same rate or more in the next two years, of which 30% are planning to outsource more. Insourcing intentions remain stable compared to last year, with 18% of respondents planning to outsource less, driven by the need to build and retain their own Intellectual Property.
Access to resources/talent and cost reduction are the joint top drivers for organisations planning to outsource more. This year, we have seen the former driver grow in importance across Europe as organisations look to outsourcing as a solution to find talent in an increasingly challenging labour market.
The top IT investment area is automation as organisations look to lower costs and reduce the need to hire (more) staff in a tight labour market (58%). This is followed by simplifying and consolidating the IT estate (52%) and saving costs (48%).
Organisations are increasingly looking to implement a globally distributed delivery model. Both offshore and nearshore intentions continue to rise (33% and 27%, respectively), compared to 19% who intend to keep work onshore. Manufacturing sector offshore intentions are notably higher (54%), indicating a shift in the supply chain of talent, followed by financial services (40%), which has always been a leading sector in terms of utilising global delivery.
General satisfaction: Exceptional Performers
Close to two-thirds of the UK market is satisfied with their IT sourcing provider, with 64% of all 753 IT sourcing relationships rated as satisfied or very satisfied.
This year, 27 IT service providers have been included in the general satisfaction ranking. Infosys and TCS are joint first for general satisfaction with 83%, followed by Hexaware, Coforge, Computacenter and HCLTech (all four at 79%). The top six providers are all classified as ‘exceptional performers’. The average satisfaction has decreased by one percentage point to 72%.
Across the five IT service towers, the top providers are:
Digital transformation: Infosys, TCS and Hexaware
Application services: Infosys, TCS and Hexaware
Infrastructure hosting: Infosys, TCS and HCLTech
Workplace services: Infosys, TCS and Capgemini
Security Services: TCS, HCLTech and Infosys
The UK report includes full rankings for the above IT service towers.
Satisfaction with cloud providers remains high, with 74% of all 1,440 cloud sourcing relationships evaluated as satisfied or very satisfied (10% higher than IT sourcing relationships).
Amazon Web Services (AWS) remains top of the infrastructure cloud platforms ranking with 80%, while Microsoft Office 365 is number one again for software cloud platforms with 85%.
Amazon Web Services (AWS)
Microsoft Office 365
Headwinds in the wider economy means that the need for transformation has never been greater for a number of UK organisations, however the war for talent continues to be intense, coupled with real and significant cost pressures. This is pushing organisations to rebalance their technology delivery organisation and operating model, optimise the use of outsourcing and insourcing, utilise talent at global locations, and maximise the value from the technology investments they have made over the last few years.
The outsourcing industry continues to thrive, and the industry players that are innovative, proactive and can translate the advancements in new technologies to deliver practical, tangible solutions at pace will have the opportunity to grow even stronger.