Business ability to manage service providers improves

And UK organisations are more willing to work with smaller outsourcers, says study

UK companies are more capable to manage outsourcing relationships

Organisations are improving their ability to manage outsourcing service providers while loyalty to bigger outfits is declining, according to a study carried out by consultancy EquaTerra.

The study looked at over 500 outsourcing contracts held by more than 160 of the top IT spending organisations in the UK and found companies are enhancing their outsourcing governance skills. But the report noted that weaknesses lie in buyers’ use of supporting software and their ability to access accurate and timely service cost and performance data.

According to the study, the UK outsourcing market has matured to a point that businesses are now more willing to hand work over to smaller organisations.

Among the top three service providers in terms of customer satisfaction determined by the UK buyers polled are Capgemini, Cognizant and Computacenter. HP/EDS, Verizon Business and CSC came bottom.

The research also suggests that European IT outsourcers scored higher client satisfaction levels than most of their Indian counterparts. Only one Indian providers made it into the top five.

The study adds that the economic climate is still driving ‘more radical and deeper’ IT outsourcing strategies’ as businesses prepare for the upturn.

“Given the strong emphasis on cost cutting this year, the ability of service providers to deliver high quality, innovative and flexible services at a lower cost is a positive sign for the outsourcing market and its ongoing growth,” said EquaTerra’s IT advisory managing director, Lee Ayling.