Skip to content


  • Add this article to your LinkedIn page
  • Add this article to your Twitter feed
  • Add this article to your Facebook page
  • Email this article
  • View or print a PDF of this page
  • Share further
  • Add this article to your Pinterest board
  • Add this article to your Google page
  • Share this article on Reddit
  • Share this article on StumbleUpon
  • Bookmark this page

The outsourcing market remains strong but some subtle changes are happening

Results of the 2016 UK IT outsourcing study

UK Whitelane report 2016

The 2016 UK IT Outsourcing Study, conducted by Whitelane Research in collaboration with PA Consulting Group, shows a continued appetite for outsourcing in the UK. Nearly three quarters of respondents said that they will continue to outsource at the same rate or more this year.

Yet we are also seeing some changes in the market. The pace of outsourcing is slowing and the trend towards insourcing is accelerating.

Request a summary of the report

About the survey

The 2016 UK IT Outsourcing Study examined over 800 unique IT outsourcing contracts, held by more than 250 of the top IT spending organisations. The total combined annual value of the contracts included in this study is in excess of £15 billion, almost three quarters of the UK market by value. The responses reflect the views of senior leaders across all industry sectors.

Key findings

The rise of insourcing
The survey responses showed very clearly that the pace of outsourcing is slowing down. This reflects the increasing number of companies that are looking at the potential of selective insourcing. More than one in five UK organisations say they are planning to outsource less and insource more (a 6% increase on last year).

The responses suggest that the rise of digital means that many organisations are increasingly focus on integrating IT much more closely with their business by developing in-house capability. An increased adoption of agile methods which require closer co-ordination between teams is also driving further development of in-house provision.

Cost concerns are back
In the two previous years, survey respondents said business transformation and a focus on core business were their primary reasons for outsourcing. That has now changed, and cost reduction is seen as the primary driver for companies who are planning to outsource more (cited by 60%). This is particularly true for organisations in the public sector where cost pressures are significant and outsourcing is seen as a way of containing those costs.

The survey also revealed growing evidence that organisations believe that, by rebalancing their sourcing mix, they will be able to reduce costs. While satisfaction with providers remains high, at 86%, a number of organisations see cost benefits in being able to set up and run their own operations.

Service integration remains tricky
There are clear differences of view about the drivers of value in service integration. Only one in four clients see value in service integration being provided by an outsourcer. In contrast, vendors are relatively evenly split between the value of internal provision, external provision by an independent SI and external provision by a provider that also delivers another tower. These responses underline that there is still much to do to bring multiple suppliers together to deliver services.

The future

All these trends mean that while the outsourcing market has yet to reach complete saturation, there is a clear slowdown in organisations planning to outsource significantly more activity. This will result in fewer opportunities for new business for suppliers and fiercer competition between them.

Request a summary of the report

Contact the IT transformation team

By using this website, you accept the use of cookies. For more information on how to manage cookies, please read our privacy policy.