2024 UK IT Sourcing Study
The 2024 UK IT Sourcing Study represents the largest survey to date. With more than 330 participants from the UK’s leading IT-spending organisations, this year’s report provides insights on the top-performing IT service providers and cloud platform providers, with close to 900 unique IT sourcing relationships and nearly 900 cloud platform relationships evaluated.
More organisations in the UK plan to increase their spending on IT service providers.
In the next two years, 35% of respondents plan to increase their IT budget spending on external providers, a notable rise from 30% in 2023. Conversely, 21% are considering a decrease in spending, a slight increase from 18% and one of the highest figures in Europe. This decrease is attributed to organisations looking to retain their own intellectual property, prioritise financial attractiveness, and ensure team stability.
35%
Organisations seek access to resources and talent through IT service providers; business transformation also higher on the agenda.
For the second consecutive year, organisations in the UK prioritise access to resources and talent as the top driver for using external IT providers. This reflects the challenges that clients face in finding/hiring the right IT talent. The second most important driver is scalability to business needs, at 54%, followed by business transformation (52%), which is up 18% in importance compared to last year. There has been a notable decrease in the importance of cost reduction, dropping by 19% to 38%, indicating reduced interest in achieving cost savings through external providers.
27% of organisations expect nearshore growth, but capacity may be an issue.
Demand for nearshore delivery is up significantly: 27% of organisations expect nearshore to grow (versus only 7% of organisations who predict a decline). However, capacity in nearshore will not be able to cater for this significant increase in demand. Clients should be aware that pressure on rates and attrition will likely increase, complicating large transitions to nearshore.
Nearshore delivery
While many organisations are experimenting with AI/GenAI, 95% of respondents indicate that it has not significantly impacted their business yet.
The survey reveals a diverse landscape in AI/GenAI adoption among organisations. 40% of organisations are already using AI with either a minor (35%) or significant (5%) impact on their business. Another 29% are still in the experimentation phase, and 22% have limited AI usage. None of the organisations have responded that AI/GenAI has transformed their business. The public sector lags in AI adoption, with 42% of respondents not using AI/GenAI significantly, almost double the UK average.
Clients are overall more satisfied with their IT service providers.
This year’s survey findings reveal that 67% of the 871 evaluated IT sourcing relationships received either a satisfied or very satisfied evaluation, showing a three-percentage point increase from the previous year. The overall percentage of unsatisfied clients has decreased from 12% to 8%, signalling some improvement in client satisfaction within the IT sourcing landscape.
The general satisfaction ranking features 34 IT service providers, including newcomers such as Colt, EPAM, Orange Business Services, Persistent, PwC, and Verizon.
Hexaware emerges as the number one service provider, moving to the top spot from third place in 2023 with a score of 84%. Following closely, Coforge secures second place with 82%, while TCS, HCLTech, and Infosys all score 81%. These top five providers stand out as exceptional performers in general satisfaction. Overall, the average satisfaction has increased by one percentage point to 73%.
2024 UK General Satisfaction Ranking (Top 5)
Across the IT service towers, the exceptional performers are:
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Application services: Hexaware and Coforge
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Cloud & infrastructure services: TCS, HCLTech, Infosys and Coforge
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Network & connectivity services: TCS
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Security services: TCS and HCLTech
Cloud platform providers
Of the 874 cloud platform relationships evaluated by clients, 63% were rated as satisfied or very satisfied, marking an 11% decrease compared to last year. Notably, the ‘very satisfied’ category experienced a significant drop from 21% to 11%.
Microsoft Azure secures the top position for infrastructure cloud platforms with 77%, followed by Amazon Web Services (AWS) at 76% and Google Cloud Platform (GCP) at 72%. Microsoft Dynamics 365 leads with a 74% satisfaction rating in the software cloud platforms ranking, followed by Salesforce.com, ServiceNow, and Workday, all three at 73%.
2024 Satisfaction
63%
2023 Satisfaction
74%
2024 UK IT Sourcing Study – Final Report
The 2024 final report encompasses the latest sourcing and governance trends for the UK. It includes rankings by six IT service towers, Key Performance Indicators spanning four dimensions, and cloud platform provider rankings. For further details, please reach out to info(@)whitelane.com.
