2025 IT Sourcing Study – UK & Ireland
The 2025 UK and Ireland IT Sourcing Study is the most comprehensive survey of IT service providers and cloud platform provider performance. This year, nearly 400 respondents from the top IT-spending organizations in the United Kingdom and Ireland evaluated more than 1,000 unique IT sourcing relationships and over 1,100 cloud platform relationships.
61% of Organisations Plan to Maintain or Increase IT Spending on External Providers.
Thirty per cent of survey respondents plan to increase their IT spending on external providers over the next two years, down 5% compared to 2024. Meanwhile, 31% expect no change in their spending, 22% plan to spend less, and 17% remain unsure.
Financial Services Sector Leads in Plans to Insource More.
Across the UK and Ireland, 22% of organizations plan to spend less of their IT budget on service providers, indicating a shift toward insourcing. This trend is strongest in the financial services sector, where 26% of organizations indicate they will move their spend from outsourcing to insourcing.
Business Transformation Top Driver for Increased Outsourcing.
Business transformation emerges as the primary driver for organizations planning to spend more on external providers, cited by 59% of respondents, a 7% increase from last year. Scalability follows closely at 52%, with access to innovation at 50%. Although access to resources and talent remains significant (44%), it has declined by 13 percentage points from the number one spot in 2024.
Knowledge Retention and Cost Reduction Drive Insourcing.
The primary driver for reducing spending on external providers is the desire to retain critical in-house expertise (68%). Additionally, 49% find insourcing more financially attractive than outsourcing, highlighting a focus on cost management. Other drivers include faster time to market/improved quality, and the development of captive delivery centres (33%).
AI Usage Grows, But Business Impact Still Limited.
AI adoption is accelerating, with only 6% of respondents not using AI/GenAI, down from 22% in the previous year. The majority (42%) rely on accessible tools such as ChatGPT and Copilot. However, the business impact remains limited: 18% say the impact has been minor, 5% note significant operational changes, and only 4% have seen a full business transformation.
Strong AI Investment Outlook Despite Operational Barriers.
Eighty-eight per cent plan to increase AI investments over the next 2 to 3 years, with 34% anticipating a significant increase and 54% a moderate one. Only 4% intend to maintain current levels, and none foresee a decrease. Key challenges to AI adoption include compliance concerns (55%), a lack of skilled personnel (46%), and data quality issues (45%).
Significant AI Investment
34%
Moderate AI Investment
54%
Offshore Delivery to Increase, Driven Mainly by the Financial Services Sector.
Offshore outsourcing remains appealing, with 35% of respondents planning to increase offshore activities, while only 14% intend to reduce them. The majority (51%) anticipate no change. Financial services are leading this trend, with 48% planning increases, notably above the UK and Ireland average, compared to 33% in manufacturing and chemicals, and 24% in the public sector.
Satisfaction Scores for IT Service Providers Reach Record Highs.
38 IT service providers feature in the UK&I study, including five new entrants: GTT, KPMG, Stefanini, Vodafone, and Zensar. Hexaware remains number one for general satisfaction, with a score of 85%, followed by EPAM (83%), HCLTech, TCS, Infosys, and Persistent (each with a score of 82%). The average satisfaction score has risen to 75%, the highest to date.
General Satisfaction (Top 5)
Exceptional Performers
Thirteen service providers have achieved Exceptional Performer status in one or more IT service towers, with satisfaction scores exceeding the market average and above the standard deviation:
• Application Services: Hexaware, EPAM and Persistent
• Cloud & Infrastructure Services: HCLTech, Infosys and TCS
• Workplace Services: Wipro, HCLTech, Stefanini and Capgemini
• Network & Connectivity: GTT, DXC Technology and TCS
• Security Services: TCS, Deloitte, HCLTech and KPMG
• General Satisfaction: Hexaware, EPAM, HCLTech, TCS, Infosys and Persistent
Clients Call for More Strategic Engagement from Providers.
Clients desire more proactive challenge from their IT service providers: 41% cite a lack of proactive challenge as the top weakness. Additionally, 29% say providers lack sufficient business knowledge, and another 29% cite the use of inexperienced resources.
Public Cloud Adoption Remains Strong.
Most organisations (77%) plan to either maintain their current level of cloud adoption (41%) or expand their public cloud volume significantly (36%). A small percentage (2%) plan to reduce their public cloud usage, while 21% are unsure.
AWS and Microsoft Lead in Cloud Platform Satisfaction.
Among the 1,119 cloud platform relationships evaluated, 58% received ratings of satisfied or very satisfied. Amazon Web Services (AWS) leads the ranking for infrastructure cloud platforms with a score of 77%, improving from second place last year, while Microsoft Dynamics 365 tops the ranking for software cloud platforms with a score of 73%.
IaaS/PaaS
SaaS
2025 UK & Ireland IT Sourcing Study – Final Report
Whitelane’s final report offers key insights into IT sourcing and governance trends, featuring rankings of IT service providers across five IT service towers and five key performance indicators (KPIs). It also includes rankings of the leading cloud platform providers for both IaaS/PaaS and SaaS. For more information, contact info(@)whitelane.com.
