IT outsourcing in BeLux still growing in popularity but buyers becoming more price sensitive as recession takes hold Service providers perform well but study reveals buyers are becoming more focused on cost savings and pricing flexibility 9th April 2009 – for immediate distribution In these current trying economic times client organisations are now, more than ever, demanding that their outsourcing contracts deliver the benefits they expect. Cost savings and flexibility are now both showing increased importance as key drivers.   One area of concern for service providers highlighted by the Outsourcing Service Provider Performance Study is around their pricing levels which was the one performance indicator that dropped from 2008. “Whilst overall client organisations are satisfied with the performance of their outsourcing contracts and the related service providers, there is an increasing need in the current economic climate for greater cost savings being driven out of outsourcing contracts and a greater emphasis on governance capabilities within buyer organisations, which are currently lacking,” comments Jef Loos, Director, EquaTerra Belgium. The ‘Outsourcing Service Provider Performance and Satisfaction Study 2009’ undertaken by leading independent business advisory firm EquaTerra, reveals that IT outsourcing is still growing in popularity amongst major BeLux organisations with 56 percent of 2009 study participants looking to outsource more. This in-depth BeLux study investigated over 400 outsourcing contracts held by over 140 of the top IT spending organisations in the BeLux region. The total annual value of the contracts included in this study is over Euro 1.5 billion, accounting for over 80 percent of the total outsourcing market in terms of annual contract value. All commercial sectors are represented in the study, as is the public sector, including both central and local government organisations. It was conducted with senior management or C-level executives with influence over corporate strategy and third party services decisions. All participants in the study are responsible for the outsourcing strategy within their organisation. The study results also show the following trends: The Service Providers in the BeLux region are doing a very good job at delivering the outsourcing services to client organisations with 88 percent of buyers willing to recommend their service provider to someone else. Global sourcing is still a growing trend with an increase of 10 percent in its use in the region, and whilst India is still the top cited location there is a significant increase in the number of organisations using Eastern Europe as a near shore destination. In the three main areas covered by the study, Application Management, Infrastructure Management and End-User Management, it is worth noting that there are different service providers in the top three positions, with one exception, showing that organisations are willing to use multiple providers based on their specialisations and skill sets. Overall, the ‘Outsourcing Service Provider Performance and Satisfaction Study 2009’ shows that cost savings and cost flexibility are the primary outsourcing drivers that client organisations are indicating as most important.   The negative global economic market conditions are spurring buyers to increase their use of outsourcing as a common business tool to reduce costs, enable a more flexible business model and shift scarce resources to focus on the most strategic activities. The research was conducted in January 2009 and therefore during the current turbulent economic times that significantly impacted markets and economies worldwide. EquaTerra expects that economic conditions will further drive demand for outsourcing as BeLux organisations more aggressively seek means to reduce costs, defer or limit future investments, and realign operating models with lower revenue levels. For further information about the BeLux ‘Outsourcing Service Provider Performance and Satisfaction Study 2009’ or to arrange a media interview please contact: Melissa Gardiner Ph: +44 (0) 207 347 5101 E: Melissa.gardiner@equaterra.com Please also see the EquaTerra online press office. Ends Notes for editors Each year, EquaTerra undertakes an investigation into organisations’ satisfaction with their outsourcing service providers. The research results are recognised as the most extensive and Representative ‘perception study’ on the issues of Information and Communication Technology (ICT) sourcing in the marketplace today. This comprehensive research study is conducted in a number of European countries using a common format to enable Europe-wide analysis and conclusions. This study focuses on the perceived quality of relationships between clients and outsourcing service providers of large business-critical contracts. This study does not represent the opinion of EquaTerra on the skills, capabilities or performance of any of the outsourcing service providers covered in the research. This study was conducted with senior management or C-level executives with influence over corporate strategy and third party services decisions. All participants in the study are responsible for the outsourcing strategy within their organisation. They also decide on or greatly influence budgets and are the influencers of decisions related to provider choice. Satisfaction is not only based on actual delivery, but also on how these individuals perceive the value they get from their providers. About EquaTerra EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported more than 2,000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions.  For more information, please contact Melissa Gardiner at +44 (0) 845 838 7500; www.equaterra.com.