UK business still outsourcing to India

By Staff Writers

Jan 17 2008 6:59PM

The use of Indian IT service providers by large UK businesses shows no signs of waning, according to a national UK study by sourcing advisory firm EquaTerra.

The study found that UK companies get a high level of client satisfaction with Indian companies compared to US or European providers.

Every UK businesses currently offshoring all or part of their IT functions are using India as one of their locations, the report found, and have no plans to take their business elsewhere.

"Business people are making the decision to outsource to India because they cannot find the same resources in the UK," said Phil Morris, managing director of EquaTerra in Europe.

"Indian firms such as Wipro and TCS are achieving real satisfaction in providing skills, flexibility and quality of work.

"The globalisation 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."

The research suggests that cost is still the primary driver for many organisations outsourcing some or all of their IT services.

But over half are now outsourcing for other reasons, such as availability of skills, flexibility and quality of work.

EquaTerra's researchers also warned that quality and flexibility are increasingly seen as the most important attributes influencing customer satisfaction.

The study showed that Indian providers frequently outscore their established global counterparts in these rankings.

Despite the current high profile of China as a growing force in the global outsourcing market, only five per cent of the organisations that participated in the study are currently outsourcing to the region.

The news is not all doom and gloom for IT services companies in Europe, however. The survey revealed that a multi-sourcing environment, as opposed to sole sourcing, tends to lead to higher satisfaction rates.