Swedish outsourcing customers have given their verdict on supplier performance during the pandemic. A bunch of suppliers have pulled away at the top while others seem to be parked at the bottom.
Customers are generally positive about how suppliers have handled outsourcing projects during the COVID-19 pandemic. This is based on major research carried out every year by PA Consulting and Whitelane on customer satisfaction with outsourcing projects in the Nordics. This year, they have reviewed 700 outsourcing contracts and the same number of public cloud contracts among 350 largest IT sourcing buyers in the Nordics.
Indian companies stand out
Peter Wardell, sourcing expert at PA Consulting, states: "Customer satisfaction has generally increased during this extraordinary year and it is primarily driven by the major international players, especially Indian companies."
Many of the major outsourcing suppliers sent staff home at the beginning of the pandemic and handled a larger part of their work from there. But it has not had any negative consequences in this respect and it shows that the global delivery organisations are working well.
During the year, the average customer satisfaction increased from 69 percent in 2020 to 72 percent in 2021. TCS, Infosys, HCL, Wipro and Cognizant have all seen increased customer satisfaction during the past year and are high on the list of the most satisfied customers. Accenture, which also has a global delivery model, is making great strides and occupying a top position. The only Nordic player that can compete with these major suppliers is Basefarm, which just like Accenture has a satisfaction rate of 80 percent and is closest to TCS at the top.
Gloomy for Tietoevry
Tietoevry is still at the bottom of the table, and remains at 64 percent, the same as last year. The only company with a worse figure is the Danish consulting giant KMD.
Peter Wardell says: "There have been some mergers among the regional players and this is usually reflected in these measurements."
But in general, customer satisfaction is good despite all that the pandemic brought with it. This shows that Sweden is a mature sourcing nation, and that we are able to handle global deliveries from international players.
The Nordic outsourcing market is in waiting mode right now, as shown in the answer to the question about what organisations' plans are for the next two years. As many as 44 percent said that there will be no major differences from last year. There are fewer and fewer organisations that previously planned to spend more on outsourcing or who planned to insource.
Scalability in focus
Peter Wardell states: "However, the pandemic has left its mark on companies' outsourcing plans. If you look at the main drivers behind outsourcing, it is now very much about achieving scalability. Some industries have been hit very hard by the pandemic and want to be able to quickly reduce their operations whereas other industries have experienced a period of growth and therefore want to increase their operations."
Major fluctuations in demand have been a driving force for outsourcing. For industries such as transport and manufacturing, which have had cancelled flights and closed factories, these effects are particularly big.
63 percent state that scalability is a reason to outsource more.
Resources and costs
The other strong driving force right now is access to resources, which reflects the lack of skills in the market.
The consulting industry is hot, and it is difficult to find staff. As a result, customers need resources from these suppliers.
53 percent state that access to resources is a reason for outsourcing. But the same number also refer to cost reduction as a major reason for outsourcing.
Other industry-specific trends in this year's survey, mentioned by Peter Wardell, are that retailers see the availability of resources as a particularly strong driving force for outsourcing, something that is probably linked to the explosion of e-commerce and their need for innovation.
The public sector is still hesitant about using public cloud services for regulatory reasons. Apart from this, the cloud providers are generally quite well positioned in this research. 78 percent say they are happy with AWS, 77 percent with Microsoft Azure and 76 percent with Google Cloud. Further down the table are Oracle with 66 percent and IBM with 64 percent.