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Time for the Swedish public sector to try Indian IT

Carl Astvik and Jad Andersson

Dagens Samhälle

7 May 2014


To read the full article in Swedish, click here

Carl Astvik and Jad Andersson, PA IT sourcingexperts, have had a byline published in Dagens Samhälle in which they ask why Sweden’s public sector has yet to engage Indian IT suppliers on a large scale. The article comes in the wake of PA and Whitelane Research’s 2014 Nordic IT Outsourcing Study, which showed that client satisfaction with outsourcing arrangements has reached an all-time high.

In the article, Carl and Jad write that the public sector still has much to gain from outsourcing and plans to outsource more. They refer to a survey by Tieto that found that 78% of the public sector has outsourced at least part of its IT operations. This suggests that "the public sector is increasingly looking to outsource as an option.

They explain that Sweden’s private sector “has been characterised in recent years by Indian suppliers gaining more and more ground”. PA and Whitelane’s survey – which researched over 1,000 outsourcing contracts held by more than 350 of the top IT-spending organisations in the Nordics – found that Indian suppliers were present in the telecommunications and manufacturing industries in particular. This trend has not, however, been adopted by the public sector.

“So why are Indian suppliers notable by their absence in the public sector?” Carl and Jad suggest that this may be due to fears about where data is stored and a reluctance to move data outside Sweden and the EU. They also suggest that there may be fears about cultural and language differences, as well as issues around the large geographical distance between customer and supplier.

The experience of the private sector, as documented in PA and Whitelane’s survey, shows these fears to be unfounded. Not only do Indian suppliers rank among the top IT vendors, but they are also increasingly opening offices in Sweden to be closer to their customers.

Results from PA Consulting Group and Whitelane Research’s survey into customer satisfaction in the IT outsourcing sector is covered in Computer Sweden.

The article covers the relatively short history of outsourcing, which has not always been straightforward. The market ‘exploded’ in the early 2000s with companies such as Skandia, Nordea, Ericsson, Sweden Post and Apoteket carrying out huge outsourcing projects. However, several of the projects  were marred by problems and disputes.

The report shows that there has been a positive development, with customer satisfaction generally high – the average for the Swedish market at 73%. It demonstrates the market has matured and that customers and providers have learned from their mistakes to become more skilled in handling these complex projects.

The article concludes that the IT outsourcing trend will continue as it gives companies a chance to focus on their core business. However, this will only remain true if customer satisfaction with outsourcing remains at high levels. If satisfaction starts to fall, it is likely we will see an ‘insourcing trend.

Carl Astvik and Jad Andersson are IT outsourcing experts at PA Consulting Group

To read PA´s and Whitelane´s latest insight in the research, click here or contact us.

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