2022 UK IT Sourcing Study results published
The 2022 UK IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, the consultancy that’s bringing ingenuity to life, investigates more than 660 unique IT sourcing relationships and more than 575 cloud sourcing relationships held by over 270 participants of the top IT spending organisations in the UK.
The findings reveal that for the first time in the UK study, cost reduction is no longer the number one driver for organisations planning to outsource more. Instead, they are outsourcing to focus on core business (57%) and gain access to resources/talent (56%). Research also found that 91% of participants rated their IT service provider(s) satisfactory and the average satisfaction has increased by one percentage point to 73%, the highest score to date.
Key findings from the 2022 study include:
Two-thirds of organisations in the UK plan to outsource at the same rate or more in the next two years, with 32% confirming they will outsource more. 18% of survey respondents are planning to outsource less (one of the highest percentages in Europe), driven predominantly by the need to build and retain their own intellectual property to drive the business.
The manufacturing and chemicals sector predict the most outsourcing, followed by financial services. Across most of the sectors, organisations continue to utilise outsourcing to drive transformation forward with pace.
Overall, respondents are satisfied with their IT service provider(s), with 91% of all 663 IT sourcing relationships rated satisfactory.
Clients consider transition and change management one of their weakest capabilities, with 29% responding that significant improvements are required. 62% of survey respondents say that in-house capability is the principal challenge to deliver complex transitions.
More than half of respondents (52%) predict that 50% or more of their application portfolio will be in the cloud in two years, with 86% moving to the public cloud to achieve more agility and scalability. One in two clients reveal that it is difficult to change cloud providers, while one in five would consider moving their cloud load to a European provider.
Amazon Web Services (AWS) remains number one on the ranking for infrastructure cloud platforms with a score of 80%, with providers performing best on the security and compliance KPI with an 81% average. Microsoft Office 365 is number one again for software cloud with 81%, while providers score best on pricing transparency with 81%.
Manish Khandelwal, IT Transformation expert at PA Consulting, says: “The pandemic years have accelerated the pace of digital transformation across sectors, and organisations have no choice but to be agile, innovative and ingenious. Businesses are aggressively using opportunities presented by digital transformation to drive growth which is resulting in significant demand for technology services. The market has matured, and clients are focused more on value rather than costs.
“The outsourcing industry has used the pandemic years as an opportunity to transform its operating model and has emerged stronger. The war for talent has reached unprecedented levels and will only intensify in the short term, however the industry has the unique opportunity to drive global workforce transformation. As the world economy enters a potentially turbulent period, winners will be those that are able to meaningfully co-create with clients, help them reduce time to market and contribute to both - the top line and the bottom line.”
The UK study is part of Whitelane’s annual IT sourcing studies, which interviews sourcing executives (CIOs/CFOs or their direct reports) about their outsourcing plans and their opinions on service providers. The studies are conducted in 13 different European countries and provide a comprehensive overview of the IT outsourcing landscape in each country. The survey shows the main outsourcing trends, evaluates and ranks the main IT service providers based on a set of key performance indicators (KPIs), and analyses trends in outsourcing governance and the impact of new technologies.