The IT Sourcing Study 2022, conducted by Whitelane Research in cooperation with Navisco AG – Sourcing Professionals, examines more than 450 IT sourcing and more than 300 cloud sourcing relationships created by over 180 participants from the organizations with the highest IT expenditures in Germany.
The study shows that the German IT outsourcing market will continue to grow, with 72% of the companies surveyed planning to outsource more or the same amount in the next two years. The pandemic has shown that scalability, up or down, is a major reason for outsourcing. For 44%, access to innovations remains one of the three most important drivers. The study also shows that supplier selection and contracting are the strongest governance skills, while transition and change management was rated as one of the weakest skills.
Satisfaction with IT service providers is high, with NTT DATA and TCS receiving the best ratings. Microsoft Azure is the #1 infrastructure cloud platform, while Microsoft Office 365 is #1 software cloud platform for the second consecutive year.
The study shows the most important procurement trends and positions the largest outsourcing service providers according to different key figures. It also highlights business developments and trends in IT governance.
Key findings from the 2022 study include:
The German IT outsourcing market is expected to continue growing, with 72% of companies planning to outsource in the same amount or more over the next two years. 41% say they will outsource more. Insourcing plans have been stable since 2020, with 14% of companies planning to outsource less.
Being more scalable to their business needs is the top reason for companies planning to outsource more (reported by 61% of companies). Especially during the pandemic and related lockdowns, organizations have experienced the need to scale up or down. Outsourcing can help achieve this flexibility. The second reason why companies in Germany are planning more outsourcing is to focus on their core business (52%). At 44%, access to innovations remains one of the three most important drivers and ranks significantly higher in Germany than in the rest of Europe.
This year, respondents cite vendor selection and contracting as their strongest governance skill, followed by sourcing strategy. In contrast, change and transition management is rated as one of the weakest skills, with 26% stating that very significant improvements are needed in client-side organizations. Service providers in Germany rate the capabilities of their customers in the area of change and transition management even worse: 83% of them state that customers need “(very) significant improvements” in these areas.
Overall, respondents are satisfied with their IT service provider(s), with 91% of all 458 IT sourcing relationships rated as satisfactory.
NTT DATA and TCS are the top rated vendors with a combined score of 82%, followed by Capgemini (81%) and DATAGROUP, DXC Technology and PwC (all three with 78%). DXC Technology enters the top five for the first time, up 11% since last year.
Bechtle leads the new security KPI with 83% – the highest score and placement of the German provider among the eight KPIs. Wipro gets the top score for sustainability at 77%, while new entrant Tech Mahindra is perceived as the most transformative service provider at 73%. On average, vendors performed best in account management at 75%, while transformative innovation and sustainability shared the lowest average at 63%.
Microsoft Azure tops the infrastructure cloud platform rankings with 80%, while Microsoft Office 365 tops the software cloud platform rankings for the second year in a row with 81%.
In terms of cloud trends, 71% of respondents say 30% or less of their application portfolio is currently running on a cloud platform, while 24% expect 50% or more of their apps to be in the cloud in the next two years will be at home. Almost half of respondents (47%) said it was difficult to very difficult to switch infrastructure cloud providers, while this figure was 9% higher for software cloud providers (56%). 62% would also consider moving a significant percentage of their cloud load to a European solution.
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