Top Ranked Service Providers for the Dutch Market Revealed
EquaTerra’s 2011 Dutch Strategic Outsourcing Study Results Announced
Amsterdam and London (24 June, 2011) – This year’s study provides deep insights into the changing dynamics of the Dutch outsourcing market. Trends identified are as broad as highlighting that IT outsourcing demand continues to grow in the Netherlands and as specific as identifying a ten percent increase in the ‘flexibility’ key performance indicator (how flexible a service provider is in making contractual changes) - this significant increase is noteworthy and likely highlights that many service providers proactively engaged with clients to renegotiate in 2010 because of the extremely challenging economic conditions. Service providers ranked most highly for ‘general satisfaction’ by Dutch CIOs this year are Accenture, with an 81 percent score, closely followed by TCS, HCL and Infosys (all three at 80 percent). Overall IT outsourcing demand continues to increase, driven strategically by ongoing shifts in preference for how organisations deliver core IT services. Seventy-four percent of all respondents involved in this study confirm that they will continue to outsource at the same rate or more and 56 percent say that they will ‘probably’ or ‘certainly’ outsource more.
The study findings are based on the perceptions of CIOs and their direct reports. It investigates over 500 unique outsourcing contracts held by over 170 of the top Dutch ICT spending organisations. The total annual value of the contracts included in this study is over four billion euros, accounting for more than four-fifths of the total Dutch IT 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. Only contracts with an annual value in excess of €1 million are included in this study.
Three Key Findings
- Cost reduction, access to skills and quality improvement goals dominate
In recent years, cost saving has been a particularly important rationale behind organisations’ decisions to outsource. This year’s research shows this continuing to hold true with 62 percent of all organisations basing future outsourcing decisions around the desire to achieve further cost savings. The second most influential factor, access to skills, was cited by 51 percent of respondents, up from 39 percent last year. The view in the market in general, is that benefits are being realised and hence cost savings are being achieved.
- Quality of customers’ abilities to manage and govern service providers remains low
The market study asked respondents to assess their own abilities to manage and govern their service providers in existing relationships. Thirty seven percent of organisations now rate their management skills as excellent or good (compared to 35 percent in 2010). EquaTerra client engagement and research efforts have consistently found a direct correlation between outsourcing governance capabilities and buyer satisfaction with outsourcing efforts. Focusing on how best to improve outsourcing governance capabilities will therefore very likely lead to heightened satisfaction levels in the market.
- Global sourcing is a significant element in organisations’ sourcing strategies
The study findings reinforce the view that offshore service delivery is now commonplace. Global (or offshore) sourcing is a significant element in Dutch organisations’ sourcing strategies with 55 percent of the organisations using offshoring. India remains by far the most dominant offshore IT outsourcing location.
Nico Boot, Partner, Sourcing Advisory said, “Respondents continue to be satisfied with the service they are receiving from providers across Applications Management, Infrastructure Management and End-User Management. This year, the average general satisfaction score for outsourcing contracts was 69 percent, up two percent from last year."
“This year we also asked a question about cloud computing. Twenty three percent of the organisations which participated in the study stated that they have already adopted cloud computing in some way, while another 21 percent are launching efforts in the coming twelve months. Throughout the year, customer demand for IT services delivered from the cloud increased, and this is set to continue in 2011 and beyond. This shift in the way IT services are being purchased and consumed represents both challenges and opportunities for both service providers and end users.”
For a copy of the 2011 Dutch Outsourcing Service Provider Performance and Satisfaction Study Management Summary, or to schedule an interview please contact:
Melissa Gardiner
P: +44 (0) 207 6945903
E: melissa.gardiner@kpmg.com
Jan-Willem Wits
P: +31206 564404
E: wits.jan-willem@kpmg.nl
About the Strategic Outsourcing Study
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, also known as Service Provider Performance and Satisfaction study, is conducted in a number of European countries using a common format to enable Europe-wide analysis and conclusions.
EquaTerra research as part of the KPMG Advisory research group will continue to conduct all of the Service Provider Performance and Satisfaction studies. For questions, please contact Stan Lepeak at slepeak@kpmg.com.
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 further information visit: www.equaterra.com
On 18 February 2011, KPMG announced the acquisition of certain assets of EquaTerra Inc., including its subsidiaries in Europe. The acquisition has created one of the broadest global sourcing and shared services advisory offerings across the Americas, Europe and Asia Pacific.
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