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2018 Nordic IT Outsourcing Study

Innovation is higher on corporate agendas this year

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2018 Nordic IT Outsourcing Study

The Nordic outsourcing market shows overall healthy signs with high satisfaction and continued growth. 74% of all respondents in the study confirm that they will continue to outsource at the same rate or more, with 36% citing that they are planning to outsource more. Overall, respondents are satisfied with their IT service provider(s), with 81% of all outsourcing contracts being rated as very satisfied, satisfied or somewhat satisfied. 13 % are either somewhat unsatisfied or unsatisfied and only 1% indicates they are very unsatisfied. 

About the survey

The 2019 Nordic IT Outsourcing Study, conducted by Whitelane Research in collaboration with PA Consulting Group, investigated more than 1,000 unique IT outsourcing contracts held by 330 of the top IT spending organisations in the Nordic region. The scope of this research makes it the most comprehensive client study covering IT outsourcing and IT service provider performance across the Nordic region.

The Nordic outsourcing market continues to change. Less outsourcing is predicted combined with some increase in insourcing. Local, regional and cloud providers are climbing the rankings, breaking the previous domination of Indian service providers. While customer satisfaction remains high, use of robotics, artificial intelligence and Agile methods are rapidly increasing in a mature market where clients have more options than ever.

Tom Krohn,
PA sourcing expert

All across the Nordic more insourcing is expected

Less outsourcing is predicted in the Nordics. 36 % of all respondents in the study confirm they'll continue to outsource more compared to 44 % last year

'Focus on core business' is still the primary reason for outsourcing – cited by 67%. But innovation is gaining importance with 30% of the respondents selecting it as a top-three objective

The survey shows a two-percentage point increase in the number of companies looking to insource across the Nordics, with some differences between countries. The main reasons given for insourcing are speed, quality of delivery and innovation

The overall satisfaction with outsourcing remains high with 88 percent of all clients being very satisfied, satisfied or somewhat satisfied. 81% of all outsourcing contracts being rated as very satisfied, satisfied or somewhat satisfied. 13% are either somewhat unsatisfied or unsatisfied and only 1% indicates they are very unsatisfied.

TCS continues to be ranked as overall number one service provider for customer satisfaction across the Nordic countries

Customer satisfaction with cloud providers increased in the Nordics with, Amazon and Microsoft among the five providers with highest customer satisfaction

Robotic process automation (robotics) and artificial intelligence (AI) results show that 60% of organisations have adopted new technologies of robotics/AI with 3 out of 4 quantifying the benefits to be significant

Future trends

Clients are placing more importance on innovation putting it in their top-three objectives for outsourcing. But the survey shows that fewer than 20 percent of clients actually achieve this with their current service providers. As innovation is also important for insourcing too, clients and service providers need to prioritise it and put mechanisms in place to address it properly.

Bridge gaps in understanding

Service providers need a better understanding of why clients outsource. Their perspectives are more in synch than in the past. But some significant differences still exist, especially when it comes to cost reduction and business transformation – service providers believe they're more important than clients do.

Providers need to deliver more

Service providers will want more process/governance and tools/automation in future. They already say they need more from their service providers than they deliver today.

Increasing the use of Agile

Overall, almost half of organisations are already using Agile as the preferred delivery model while another 40% plan to adopt it. There are differences across the countries and sectors. On a country basis, Finland has the highest use of Agile (62%) and it's used most in the Financial Services sector.

Robotics and AI

60% of organisations have adopted robotics or AI with three out of four clients saying the benefits are significant.

what do outsourcing clients in the nordics do to succeed?

  • Create a climate for cooperation and trust
  • Dare to expose the service provider to the business representatives
  • Benefit from supplier innovation
  • Understand that service providers need to make a profit
  • Ensure ongoing healthy competitiveness between key service providers
  • Maintain a long term view on the sourcing relationship
  • Balanced contracts with proper change management and active governance
  • Visit service provider delivery sites and meet the delivery team frequently.

Related Insights

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Henrik Ringgaard Pedersen

Sourcing and IT transformation and financial service expert

Peter Wardell

Digital, IT-strategy and sourcing expert

Tom Krohn

IT transformation expert

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