will continue to outsource
The 2020 Nordic IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, investigated more than 700 unique IT sourcing relationships and 700 cloud relationships held by more than 340 of the top IT spending organisations in the Nordic region. The study evaluated 28 IT and cloud service providers and ranked them based on client feedback. The scope of this research makes it the most comprehensive client study covering the performance of IT outsourcing and IT service providers across the Nordic region. If you want to learn more about this report, please contact one of our PA sourcing experts.
"Whilst the Nordic outsourcing market remains strong, changes continue at a rapid pace. Customers who have a clear strategy will be best placed to take advantage of the big opportunities ahead."
PA sourcing expert
Continued growth in the market can be expected with 67% of respondents intending to outsource at the same rate or more, however, insourcing is also increasing with 18% of respondents adjusting their scope and bringing services in-house.
Clients' main drivers for outsourcing are the need for "more scalability to business needs" (59%), "cost reduction" (55%) and "a focus on core business" (53%).
The increase in insourcing is primarily driven by the shift towards more "faster time-to-market and/or improved quality outcomes" (73%) and "the challenge of working with providers in Agile/DevOps teams" (54%).
Respondents are satisfied with their IT service provider(s), with 87% of all 702 IT sourcing relationships being rated as satisfactory, 9% being somewhat unsatisfied, 3% unsatisfied and only 1% very unsatisfied.
Respondents are also satisfied with their cloud providers with Microsoft, AWS and Google ranked as the top providers in terms of satisfaction for Infrastructure Cloud platforms and Google Suite, Microsoft, ServiceNow and Salesforce.com ranked as the top Software Cloud services.
TCS is in first place in the Nordic ranking with the most satisfied clients across Nordic countries followed by Basefarm and Sopra Steria.
Satisfied clients are looking to outsource more, however, clients are adjusting their scope driven by aggressive adoption of cloud services and agile ways of working. The traditional service providers are discovering they need to change and find ways to support their clients with the following initiatives:
Investments appear to continue in intelligent automation (robotic process automation, artificial intelligence, machine learning) with 68% of Nordic organisations already using and planning to increase the usage of intelligent automation. It is also noteworthy that 52% of the respondents believe the service providers are only marginally sharing the benefits of the usage of these tools with them as clients.
Clients (64%) and service providers (68%) agree that the biggest barrier to overcome for a wider adoption of public cloud is integration with existing or legacy systems. Security and privacy issues are also proving to be a major obstacle for further expanding the use of cloud solutions.