IT Outsourcing Significantly Increasing in Popularity amongst Major UK Organisations as Recession Hits Hard IT Outsourcing Significantly Increasing in Popularity amongst Major UK Organisations as Recession Hits Hard 4 February 2009 – for immediate distribution – As the impact of the recession hits hard, client organisations in all sectors are turning to outsourcing in an attempt to make additional savings and are actively seeking the best deals possible, according to the findings of a major UK study launched today. The ‘Outsourcing Service Provider Performance and Satisfaction Study 2008-09’ undertaken by leading independent business advisory firm EquaTerra, reveals that IT outsourcing is significantly increasing in popularity amongst major UK organisations with 63 per cent of 2008-09 study participants looking to outsource more (compared to 54 per cent in 2007). “These study results clearly demonstrate that service providers with existing IT outsourcing contracts are unable to rest on their laurels” said Phil Morris, Chief Operating Officer of EquaTerra (EU and Asia Pacific). “As price becomes a more immediately pressing attribute than satisfaction, clients will seek opportunities to consolidate their IT service provider portfolio in an effort to gain economies of scale and drastically reduce spend levels” he warned. This in-depth UK study investigated over 400 outsourcing contracts (330 of the top 500 UK contracts) held by over 125 of the top IT spending organisations in the UK. The total annual value of the contracts included in this study is over £8 billion, accounting for approximately two-thirds of the total UK 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 clearly demonstrate the following IT outsourcing trends can be anticipated in 2009: - Further cost savings as the principal driver for choosing to increase the existing levels of outsourcing with 80 per cent of study participants showing an escalation of 11 per cent from 2007. - A continuing rise in the adoption of global sourcing. This year’s research shows the proportion of organisations using near/offshoring capabilities rising from 57 per cent in 2007 to 66 per cent in 2008. - ICT services as delivered out of India (now used by 89 per cent of respondents) are increasing. - Satisfaction levels are still relatively high with Indian firms, but the gap between them and ‘traditional’ service providers such as CapGemini, HP and Logica seems to be closing. - Almost all service providers have been focused on improving the quality of their operational relationships; a key component of overall outsourcing governance and management efforts, but there has been no discernable improvement in customer’s abilities to manage service providers. Overall, the ‘Outsourcing Service Provider Performance and Satisfaction Study 2008-09’ shows that most organisations consider service providers to be more willing to take risks, as well as being more innovative. In evaluating the seven, specific KPI areas plus general satisfaction there has been a significant improvement in the last year. Satisfaction levels with specific KPIs have risen since 2007, especially Price (up five per cent), Risk (up seven per cent), Operational Relationship (up six per cent) and Innovation (up five per cent). These improvements are a reflection of the ongoing maturing of the UK ITO market and bode well for increased buyer usage of ITO as a business tool. The research was conducted in the autumn of 2008 and therefore during the height of the economic downturn that significantly impacted markets and economies worldwide. EquaTerra expects that economic conditions will further drive demand for outsourcing as UK organisations more aggressively seek means to reduce costs, defer or limit future investments, and realign operating models to lower revenue levels. For a copy of the UK ‘Outsourcing Service Provider Performance and Satisfaction Study 2008-09’ Management Summary or to arrange a media interview please contact: Melissa Gardiner Director of Marketing EU/Asia Pacific 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 relationshipsbetween 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.