IT Sourcing Europe reveals some of the key findings of the UK IT Outsourcing and In-House Software Development survey 2011.

IT Sourcing Europe has recently finished the UK ITO and In-House Software Development Survey 2011, conducted in the frames of the All-European research. The survey was conducted online in March – April 2011 and completed by the 729 UK companies of different sizes and industry sectors. The ratio of outsourcing to non-outsourcing companies participating in the survey was 46.9% to 53.1%.

The survey allows benchmarking the following trends at the UK ITO market in 1Q 2011:

  • The vast majority of the outsourcing companies in the UK – 57.8% – are less than 50 in headcount (up 22.8% from 2010)
  • 50% of the UK companies outsource IT and/or software development projects valued at EUR 0-49K (up 18% from 2010)
  • 53% of the companies single-source their solutions (i.e. partner with a single ITO service provider)
  • 30.5% of the UK outsourcers transfer their software development nearshore (up 8% from 2010), 26.8% – within the United Kingdom (up 7.5% from 2010) and 20.5% – offshore (down 4.5% from 2010)
  • Most of the UK outsourcers – 41% – partner with their ITO services providers via the Own Team Model (also referred to as a Dedicated/Managed Team), which is up 11% from 2010. A Fixed Price project remains the second most popular outsourcing model used by almost 40% of the outsourcers (up 2% from 2010), and the Offshore/Nearshore Dedicated Center is the third most popular engagement model in the UK used by 25.7% of companies (down 3% from 2010).
  • 62.3% of the UK companies outsource Web solutions (up 33% from 2010), 31.9% of the companies outsource Enterprise development (down 2% from 2010), and 29% – Mobile computing (up 13.5% from 2010). Almost 16% of the companies do cloud-sourcing, which is up 7% from 2010.
  • 66% of the UK companies use outsourcing to reduce their operating costs and 44% – as a response to the shortage of domestic IT talent
  • 75% of the UK IT outsourcers rate the availability of the advanced English language skills and 69% – the available IT talent/resource pool as the most important criteria in the choice of the ITO destination
  • The top three ITO partner selection criteria in the United Kingdom are: sound experience in similar projects (58.3%), positive references from peer companies (51.4%) and successful pilot project completion (51.4%)

More outsourcing trends will be available in the UK IT Outsourcing Intelligence Report 2011 to be published in May 2011.

  1. Outsourcing is not just a strategy of cost reduction. It is in fact, a strategic service and essential element of growth.

    Particularly for software development services, I feel service buyer should maintain a single-minded focus on buying technology services that can drive enterprise-wide value rather than just bottom-line cost savings for their company.

    Many Indian software service providers (CMMI Certified) have capacity to lay the framework for a more flexible technology infrastructure by providing on-site project managers and a large team of programmers with strong technical skills working offshore. I feel this will be the next-best thing service buyers will look forward. An ideal model separating “value from cost”

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