European Service Provider Performance & Satisfaction (SPPS) Study

Transcription

1 A Research Report by EquaTerra European Service Provider Performance & Satisfaction (SPPS) Study Management Summary Get to what matters.

2 Introduction Each year, EquaTerra undertakes an investigation into organisations satisfaction with their outsourcing service providers in Europe. The research results are recognised as the most extensive and representative perception study on the issues of Information Technology (IT) 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 year s European study investigates over 2000 outsourcing contracts held by over 750 of the top IT spending organisations in Europe. The total annual value of the contracts included in this study is over 20 billion and all commercial sectors are represented in the study, as is the public sector, including both central and local government organisations. The focus of this research is on IT services outsourcing contracts with an annual value of more than 1 million and on IT service providers that are active in at least three of the following regions: Benelux, Germany/Switzerland, the Nordics (Denmark, Finland, Norway, Sweden) and the UK. Defining the Research Model: How you Should Read and Interpret this Research Report and its Findings In reading this report you should bear the following factors in mind: 1. This is a Perception Study 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. EquaTerra conducts the market research, but the findings represent the opinions of the clients of the service providers. EquaTerra is solely responsible for defining the profile of the outsourcing contracts and selecting the buyer organisations that participate and the service providers that are evaluated in this research. The study does not seek to establish anything as absolute fact (as perceptions are by definition subjective), but to report upon the feelings and broader perceptions of key decision-makers regarding the services supplied by some of the market s most important outsourcing service providers. At the most basic level, the ranking of these organisations provides them with a valuable warning about any gaps between the market perception of their organisation and its service offerings, and the resultant feeling within their customer base. In the most extreme cases, the results highlight key issues for that provider or the industry to tackle as a matter of urgency. The rankings are solely based on the feedback received in the market study from the clients polled. They are not based on any market metrics such as deals won, revenue, profitability or growth levels. The rankings are not based on the opinion of EquaTerra, its management, or advisors. This study is 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. This study focuses on the perceived quality of relationships between clients and outsourcing service providers of large business-critical contracts. Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 2

3 2. Perception is never balanced or fair, but we always use a representative sample size Service providers rated in the study vary by size, service portfolio and client portfolio. The different providers all have a (slightly) different focus on application, infrastructure and/ or end-user management, making it not only difficult but even impossible to compare apples with apples. Participants in the study are asked to rate their outsourcing service providers on a selection of key criteria. Crucially, they only rate those providers that are currently actively delivering services to their organisation. Participation in the study is on the basis of strict confidentiality. In line with this, the absolute privacy of the respondents is guaranteed, and the research process ensures anonymous use of all aggregate data, information and comments. Performance ratings and rankings in this study are not related to the actual measurement of deliverables and/or services, but rather reflect the perception of the respondents on these achievements. The minimum number of participants required for each service provider in the study guarantees that the service provider scores reflect the opinion of a representative client group and not the opinions of individuals. The scores for each provider also represent similar seniority across many contracts, so that no contract or relationship can unfairly impact the score. 3. This study is for both buyers and service providers The results of the study are used by all leading global and regional service providers to inform their go to market strategies, assess their perceived strengths and weaknesses, educate their staff, communicate to the wider market, and fine-tune their improvement and market positioning programmes. The end-user organisations that participate use the results as a tool to benchmark their own satisfaction compared to that of others using the same service providers, as well as providing them with an opportunity to understand the perceived strengths and weaknesses of their providers in comparison to the market at large. 4. This study is focused on Information Technology Outsourcing (ITO), not Business Process Outsourcing (BPO) The providers in this study are only evaluated on their ITO contracts and not on their BPO contracts. Though there are some questions about the current status of their BPO initiatives and their future plans, the respondents in this study are most likely not directly involved in BPO. For more information on the BPO research programme, contact EquaTerra Global Research at: research@equaterra.com. Usage Policy This document is Copyright EquaTerra 2010, and all rights are reserved. It is for Internal Use Only. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any purpose whatsoever. Permission will usually be given for non-commercial uses, and permission requests will be dealt with promptly. If you wish to request permission please contact: Melissa.Gardiner@equaterra.com or research@equaterra.com Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 3

4 Management Summary The 2010 EquaTerra Service Provider Performance and Satisfaction studies provide deep insights into the changing dynamics of the outsourcing market in Europe, as well as highlighting some powerful warning signs for both clients and providers. The points below focus both on general trends in the market as well as on the perceived performance quality of service providers. Trends in the Marketplace 1. Most outsourcing service providers are doing a good job overall Eighty-four percent of all participating organisations are satisfied with their service providers and 86 percent of buyers would recommend their service provider(s) to another outsourcing buyer. 2. Outsourcing usage levels are still increasing in Europe The importance of satisfaction with outsourcing is underlined by the findings on respondents future outsourcing plans. Eighty-two percent of all respondents involved in this study confirmed that they will continue to outsource at the same or higher levels, with 54 percent indicating they will probably or certainly outsource more. Less than 10 percent of all respondents plan to reduce levels of outsourcing going forward. 3. Achieving cost savings, gaining access to third party skills and enabling process quality improvement are the main outsourcing drivers Achieving cost savings is the most important outsourcing driver for future outsourcing efforts with 67 percent selecting this response. Quality improvement and gaining access to skills also represent very important drivers as identified by 38 percent and 39 percent of respondents respectively. The desire to have greater cost flexibility is cited by 29 percent of the respondents, while 13 percent stated time to market as a reason to increase their existing levels of outsourcing. Critically, buyers are achieving the benefits they seek from outsourcing. Regarding the degree to which customers believe that outsourcing met the predefined primary objectives, 73 percent of the study participants say that outsourcing has contributed significantly or moderately positively to meeting the primary drivers. 4. More organisations are utilising offshore outsourcing Fifty-five percent of the organisations which participated in this research study are currently making use of offshoring. Noteworthy is that the UK has the most developed market in the use of offshoring with 71 percent of the polled organisations utilising offshore outsourcing. The percentages of organisations that currently use offshore capabilities are significantly lower in the Netherlands, Nordics and BeLux at 55 percent, 52 percent and 51 percent respectively. Sixty-three percent of the buyers offshoring Application Management (AM) expect to do more going forward but this is the case for only 50 percent of those offshoring Infrastructure Management (IM). Forty percent of those organisations offshoring End-User Management (EUM) expect this to increase. Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 4

5 5. European buyers are moderately satisfied with the quality of their organisations own outsourcing governance skills and competencies to manage their service providers. Respondents self-assessed their own capabilities to manage and govern existing service provider relationships and outsourcing efforts. The quality of their own service provider management capabilities is assessed as good (47 percent) or even excellent (nine percent) by the majority of the polled clients. Thirty-eight percent of organisations rate their management skills as average and six percent as weak. Interestingly Dutch CIOs are far more critical about the quality of their own governance skills than their counterparts in Belgium, the Nordics and the UK; 65 percent indicated that their governance skills are average or weak. By contrast 67 percent of the participating UK organisations perceive their management skills as good or excellent. Geographic and Industry Trending As noted above in the summary and below in the detailed findings, results from this year s series of European ITO SPPS studies often vary across different geographic markets. Complete research study results from individual markets are available. EquaTerra will also subsequently release findings of the major individual industry market segments covered in the SPPS studies, including financial services, public sector, etc. To learn more about these vertical industry results and how to obtain them, please contact research@equaterra.com. 6. Different outsourcing service providers lead in client satisfaction rankings across different process areas Outsourcing buyers participating in this study scored their satisfaction with their service providers performance across a range of key performance indicators (KPIs). When interpreting these scores and rankings it is necessary to recognise the differentiation in offerings and capabilities of the service providers ranked in this study. While overall rankings are interesting, what is more relevant is how providers ranked in the areas that represent their core service offerings. The top three service providers (in terms of general satisfaction) across the three main IT process areas covered (Application Management (AM), Infrastructure Management (IM) and End-User Management (EUM)), are all different. This shows that service providers are specialised, and all have their own strengths and weaknesses. Top 3 AM Top 3 IM Top 3 EUM 1. Cognizant 1. Logica 1. Computacenter 2. TCS 2. Siemens 2. Logica 3. Steria 3. Capgemini 3. Fujitsu Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 5

6 Profile of Service Providers and Respondents Group Service Provider profile Providers included in this study Accenture AT&T Atos Origin BT Cable & Wireless Capgemini Cognizant Computacenter CSC Fujitsu Getronics HCL HP Enterprise Services IBM Infosys Logica Mahindra Satyam Orange Business Services Siemens Steria TCS T-Systems Unisys Verizon Business Wipro Respondents profile Sectors 5% 5% 3% 3% 3% 7% 1% 1% 1% 8% 8% 16% 10% 13% Banking, Financial services, Insurance Government (central/local), Education, Non-profit Manufacturing Transportation & Logistics Energy/Utilities, Oil & Gas Retail, Wholesale Consumer Packaged Goods, Food/Beverages Telecommunication Pharma/Biotech/Life Sciences Chemicals, Minerals, Natural Resources Business Services/Consulting, Construction, Engineering Automotive Other High Tech Products/Services Healthcare providers Entertainment/Media Real Estate Commercial Aerospace/Defense Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 6

7 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, and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement, Real Estate and Facilities Management and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions. Contact Us If you would like to know more about EquaTerra, please contact us. BeLux Pegasuslaan Diegem (Brussels), Belgium Tel: +32 (0) infobelux@equaterra.com China Level 31, Jin Mao Tower, 88 Shi Ji Avenue Pudong, Shanghai , China Tel: +86 (0) infochina@equaterra.com Finland (Baltics and Russia) Mannerheimintie 12b, 5th Floor FIN Helsinki, Finland Tel: +358 (0) infofinland@equaterra.com The Netherlands Postbus AB Amsterdam, Netherlands Tel: +31 (0) infonl@equaterra.com Sweden (Nordic HQ) Strandvägen 7a Stockholm, Sweden Tel: +46 (0) infonordics@equaterra.com United Kingdom 150 Minories, London EC3N 1LS United Kingdom Tel: +44 (0) infouk@equaterra.com Germany Herriotstrasse Frankfurt, Germany Tel: +49 (0) infogermany@equaterra.com India Level 4, Rectangle No.1, Commercial Complex D4, Saket, New Delhi , India Tel: +91 (0) infoindia@equaterra.com Americas Three Riverway, Suite 1290 Houston, TX United States of America Tel: infoamericas@equaterra.com Copyright EquaTerra All rights reserved. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any purpose. 3144EU-1_Aug2010. Copyright EquaTerra All rights are reserved. European Service Provider Performance & Satisfaction (SPPS) Study Page 7