2020 UK IT Sourcing Study Results Published
The 2020 UK IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, the innovation and transformation consultancy, investigates more than 550 unique IT sourcing relationships and 600 cloud sourcing relationships held by over 250 participants of the top IT spending organisations in the United Kingdom. This makes it the most comprehensive UK survey to date with more than 1,150 contracts investigated.
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Key findings from the 2020 UK Study:
Over the next two years more outsourcing is predicted for the UK, with 66% of respondents planning to outsource at the same rate or more (down 5% since last year). Insourcing remains stable with 15% of organisations planning to outsource less (insource), in a bid to achieve faster time to market and improved quality outcomes. In contrast to the UK, we have seen a trend in insourcing in the rest of Europe for the first time this year. COVID-19 is also expected to have an impact on IT outsourcing, but the true scale and implications will only become visible in the coming months.
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Financial services and manufacturing businesses are predicting the most outsourcing, with half of organisations planning to outsource more (20% above the average for the UK). This is in sharp contrast with the public sector, where only 22% plan to increase their level of outsourcing and almost one in five will outsource less.
Cost reduction is the main driver for organisations planning to outsource more in the UK by a significant margin (71%), jointly followed by business transformation and improvement of service quality (both cited by 50%).
Overall, respondents are satisfied with their IT service provider(s), with 87% of all 564 IT sourcing relationships being rated as satisfactory. In comparison with last year the overall percentage of dissatisfaction has decreased from 16% to 13%.
On the overall ranking for general satisfaction, TCS is the top-scoring service provider with 81%, followed by Hexaware (79%), NIIT Technologies (78%), HCL (75%) and Cognizant (74%). Whitelane and PA’s detailed report ranks the service providers by applications, data centre and end-user services and the cloud providers by software cloud platforms and infrastructure cloud platforms.
Top 5 only (UK)
Use of cloud continues to grow in the UK with more than 600 cloud sourcing relationships evaluated and 37% of organisations predicting that more than 50% of their application portfolio will be in the cloud by 2022. There are differences across the sectors, with 62% of public sector organisations predicting more than 50% of their portfolio will be in the cloud, compared to just 18% in the manufacturing sector.
77% of respondents cite integration with existing or legacy systems as the biggest barrier to successfully transition to the public cloud, followed by security and privacy issues and governance and internal capabilities to manage cloud providers/solutions. In comparison with last year, challenges over security are less prominent (down 20%) showing some issues have potentially been resolved.
Intelligent automation (IA) continues to increase in the UK with 53% of organisations currently using these technologies. By industry, the financial services sector is significantly ahead of other sectors with 75% using IA compared to 54% in the manufacturing sector and 26% in the public sector. While all sectors are predicted to increase their investment in IA, the biggest change will likely take place in the public sector with 50% planning to use it in the coming years.
Use of Intelligent Automation (IA) by industry
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Intelligent automation (IA) continues to increase in the UK with 53% of organisations currently using these technologies. By industry, the financial services sector is significantly ahead of other sectors with 75% using IA compared to 54% in the manufacturing sector and 26% in the public sector. While all sectors are predicted to increase their investment in IA, the biggest change will likely take place in the public sector with 50% planning to use it in the coming years.
Use of Intelligent Automation (IA) by industry
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Financial Services
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Public Sector
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Manufacturing
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Other Sectors
Manish Khandelwal, IT Transformation expert at PA Consulting, says: “Technology investments continue to grow and together with the impact of-COVID-19, the trend will only accelerate as organisations move from physical to digital workplace. There is a significant opportunity for service providers that are able to drive seamless delivery using collaboration technologies.”