Significant growth potential for BeLux outsourcing market
Results from the 2015 Belux IT Outsourcing study
The BeLux market for outsourcing still has significant growth potential as companies continue to outsource more. The main drivers for outsourcing are a stronger focus on the core business and cost reduction. The majority of contracts surveyed are meeting their objectives, and client satisfaction is high with an average satisfaction score of 75% across all providers assessed.
These are the key conclusions of the 2015 IT Outsourcing Study for Belgium and Luxembourg, which was conducted by Whitelane Research in collaboration with Vlerick Business School. The study investigates more than 500 unique IT outsourcing contracts held by over 200 of the top IT spending organisations in the BeLux region. The total combined annual value of the contracts covered by this study is more than €1.5 billion and all industry sectors are represented.
1. Companies will continue to outsource more. Eighty-one percent of all respondents in the study confirm that they will continue to outsource at the same rate or more, indicating that the BeLux market still has significant growth potential (Figure 1).
2. Focus on core business (cited by 70 percent) is the main driver for companies planning to outsource more (Figure 2). The driver, which has increased by 15 percent from 2014, overtakes cost reduction as the most important factor for the first time in three years.
3. Almost 60 percent of all organisations are making use of nearshoring and/or offshoring. This is expected to further increase in the coming years. Organisations are generally satisfied with their offshoring and nearshoring component.
4. The service provider community shows a strong overall satisfaction performance with an impressive 93 percent of the clients being satisfied with their outsourcing contract (Figure 3), a two percent increase from last year. Still, there are significant differences between the performances of the 26 IT service providers ranked in this year’s study, and our full report contains more detailed information, such as the service providers ranking by IT domain as well as by 11 different KPIs.
5. Computacenter is ranked first (Figure 4) in the overall service provider satisfaction ranking with a score of 85 percent, followed by Econocom (82 percent) and TCS (81 percent). The local Belgian vendors are performing well, with a significant number of these providers appearing in the top ten.
6. In general outsourcing is meeting its objectives: of all the contracts that have been evaluated, almost 75% is meeting its objectives. Twenty-three percent is partly meeting its objectives and less than 3 percent is not meeting its objectives.
7. Fifty percent of all BeLux organisations are using or planning to use public cloud vendors. The report shows the satisfaction ranking with these cloud vendors, such as Amazon, Google, Microsoft, Salesforce.com and SAP.
8. We also asked the clients how satisfied they are with their own sourcing capabilities in the following four areas
(Figure 5): 1) Sourcing strategy 2) Supplier selection and contracting 3) Transition management 4) Governance and supplier management.
Carine Peeters, Professor of Strategy at Vlerick Business School: “For an outsourcing deal to be a success, providers need to do their homework: deliver the expected level of quality at a fair price, provide clear and honest reporting, and be proactive in continuously improving the deal. But clients too, must do their share of the work and invest in the necessary strategic planning and governance. The results of the survey show that outsourcing works. But “it takes two to tango”.”
The BeLux study is part of Whitelane’s annual extensive IT outsourcing studies. We interview sourcing executives (CIOs/CFOs) about their outsourcing plans and their opinions on service providers. The study is conducted in 14 different European countries and provides a comprehensive overview of the IT outsourcing landscape in each respective country. The survey also shows the main sourcing trends and positions of the main outsourcing service providers based on different key performance indicators (KPIs). The survey shows cloud computing and governance trends.
The full research report can be obtained from Whitelane Research.