John Mackie, UK Public Sector Lead

Nineteen percent of the outsourcing contracts reviewed in the EquaTerra 2010 UK IT Service Provider Performance and Satisfaction Study were for public sector organisations, representing both central and local government and non departmental public bodies (NDPBs). Given the political and economic climate in which these organisations are currently operating, findings relating to the public sector were keenly anticipated – and didn’t disappoint.

Of particular note was the finding highlighting that there would be significantly more outsourcing in the public sector – 39 percent of public sector study participants confirmed that they would probably outsource more, with a further 15 percent stating that they were certain to outsource more. All cited cost reduction as a driver of outsourcing, and 38 percent financial flexibility; reflecting the need for commercial relationships that can adjust to the changing needs of organisations. So, the results support the view that, as expected, the public sector will use outsourcing as a tool to help meet its cost reduction targets. And so it should. After all, the study results also revealed that 72 percent of public sector respondents confirmed that they felt positive about how existing outsourcing had met stated organisational objectives.

Offshoring is often seen as a path which the public sector walks reluctantly. Results from previous years’ IT Service Provider Performance Studies have shown little appetite for offshoring from the sector. However, 40 percent of this year’s public sector respondents use offshoring as part of their service delivery model – significantly, with no reduction in the level of satisfaction with their service provider.

Clearly times remain challenging for the public sector, a situation unlikely to change any time soon. Fortunately there is a strong sense that the service provider community is capable of helping public sector organisations to address the challenges to come.

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: Market Trends and News, Outsourcing, Public Sector by EquaTerra