2023 Nordic IT Sourcing Study
Outsourcing market set to get more competitive
The 2023 Nordic IT Sourcing Study is set to become more competitive as clients plan to outsource fewer IT services. According to our research, 20 percent of organisations are now planning to outsource less of their IT compared with 2022.
For those planning to outsource more IT services, the top drivers reflect previous years with some variances, such as greater emphasis on access to resources. Over a five-year period, a growing number of clients expect to outsource for business transformation reasons, increasing from 20 percent now to 44 percent in future.
About the survey
The 2023 Nordic IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, investigates more than 750 unique IT sourcing relationships and 1,400 cloud relationships held by close to 400 of the top IT spending organisations in the Nordic region. The survey evaluates and ranks 25 IT outsourcing service providers and 12 cloud service providers based on the opinions of their clients. The scope of this research provides the most comprehensive client study covering the performance of IT service providers across the Nordics.
Key findings from the research
Future developments in sourcing partnerships
Security will play an increasingly important role
Global cyber security threats, combined with clients' complex supplier eco-systems, have led to a need to strenghten resilience and end-to-end cyber security defences. This will result in a closer focus on security services from all IT outsourcing suppliers, and will open up a market for highly skilled, niche players with the capabilities to take on more advanced responsibilities. That said, outsourcing the management and operation of security services will always require thorough analysis and risk management capabilities, and key expert roles within every organisation.
Suppliers will become more niched towards specific industries
Even though there are many broad IT outsourcing suppliers in the marketplace, our survey results show a trend toward specialisation. This is already visible in the delivery of specific services, but also when providing services to clients within selected industries. The reason is clear - the more value clients expect from suppliers, the more industry insight and knowledge those suppliers will need to become a trustworthy partner. The understanding and contacts required are both related to specific applicable regulations and established ecosystems, but also to industry value chains and specific suppliers.
Location strategy will evolve to address trends and legislation
Our survey suggests significant changes in future location strategies for delivery, however this depends largely on the industry and the services that will be outsourced. Four in ten private sector respondents are looking to increase their use of nearshoring, while decreased offshoring is particularly apparent in more regulated industries. This shift is driven by a mix of reasons, including high attrition rates in offshore delivery and changes to legislation, as well as the availability of talent.
Keys to a successful outsourcing strategy
Develop or revisit your IT sourcing strategy
Understand business needs and your place in the market to define what success looks like.
Align supplier objectives
Engage with existing and new suppliers, develop an understanding of their objectives and drivers, and revise contracts to include shared incentives.
Mature the relationship
Establish clear governance and responsibilities with suppliers, co-create transparent ways of working, and build personal relationships by discussing culture as well as techniques.
Identify performance levers and how to use them, establish business analytics and benchmarking, and faciliate collaboration between different service providers and business stakeholders.