UK companies’ love affair with Indian outsourcers is still hot and heavy with few signs of a cool-off, according to a UK study published this week.
A clean sweep of UK businesses that outsource their IT said they offshore all or part of their IT function to India, according to the survey, which was undertaken by sourcing advisory firm EquaTerra. If anything, Indian service providers extended their popularity over European providers during the last year, securing four of the top five rankings for customer satisfaction. Meanwhile, despite China’s high profile, only 5% of the UK C-level respondents said they offshore to the region.
Numbers of UK companies offshoring rose over the last year from 47% to 57%, and more than half the respondents said they plan to shift more work abroad over the coming year. Only 9% plan to outsource less.
The services establishment needs to up its game to compete with Indian providers, according to Phil Morris, managing director of EquaTerra Europe. Globalization of services will require larger, more global suppliers such as Accenture, IBM, and HP to reposition their overall delivery models and structures in order to keep pace with newer market entrants, he said.
Cost remains the chief driver for offshoring, but over half cited other reasons such as skills, flexibility, and quality as the prime motivation behind their outsourcing strategy. Only 14% of firms said they are unhappy with their outsourcing contracts.
Business process outsourcing is growing slowly, edging forward 5% over the year to secure a 31% market share.