Anthony Allinson, Senior Advisor, IT Advisory Services, United Kingdom

This year’s study shows the original western global providers, and to some extent the larger heritage Indian providers, struggling with lower client satisfaction scores for Application Management than in previous years. This is thought to be driven by the scale and complexity of these global deals. Conversely, there is a perception in the market that only these few providers have the reach and capability to deliver higher risk global services.

Despite the challenges, there is continued investment in large Application Development Management (ADM) deals where clients are seeking to achieve global strategies and transformations, particularly as emerging markets such as Asia and Latin America continue to grow rapidly. At the other end of the spectrum, we continue to see even the larger providers invest in smaller deals to gain share and raise their profiles in market sectors where they see opportunities for growth, such as in the retail sector where the need for efficiency is driving outsourcing. It is also worthy of note that more than 75 percent of all organisations that have participated in the study have outsourced all or part of their application management.

Further, Application Management outsourcing trends this year include service providers investing in developing both deeper relationships with clients and their sector expertise – backed up by cost effective global services. On the client side, in addition to cost savings, this improved offering is supporting flexibility, global capabilities, reliable service quality and most critically, strategic business goals. In some cases, clients are linking their business strategies directly to their outsourced Application Management capabilities.

Test services are now mature and increasingly industrialised. Test automation, specialised performance testing and cloud-based environment management are now packaged and available from most leading service providers. To the end-user this offers efficiency and increased flexibility in an area that has been a bottleneck in IT departments for many years. As confidence in test services has grown buyers are, in some cases, beginning to bundle these back into core Application Management contracts – another development which will be interesting to watch.

The UK IT Service Provider Performance and Satisfaction Study management summary is now available to download.

About the UK IT Service Provider Performance and Satisfaction Study:  Each year, EquaTerra undertakes an investigation into organisations’ satisfaction with their outsourcing service providers. This year’s UK study is the most extensive to date, both in terms of the level of participation and the insights gained. More than 220 different organisations participated and evaluated over 660 IT outsourcing contracts with an annual value of £14bn.

Filed under: Information Technology (IT), Market Trends and News, Outsourcing by EquaTerra