Companies based in Germany continue to rely predominantly on onshore services when awarding IT projects. This was the result of an annual survey of IT decision-makers conducted by IDG Research Services in cooperation with the personnel and project service provider Allgeier Experts. According to the study, nearly 80 percent of participants consider Germany as an outsourcing region. Western Europe follows in second place with 36.8 percent. IT infrastructure projects are outsourced particularly frequently (84.4 percent), followed by application management (80.3 percent), business processes (76 percent) and the IT service desk (75.4 percent). Overall, more and more companies are planning to outsource projects.
Source: Sourcing Study, IDG Reserach Services, Munich 2018.
In most companies, outsourcing is predominantly a strategic issue. According to the IDG study, sourcing decisions are made in almost 85 percent of cases by management, the CIO or the IT manager. Board members are primarily responsible for making decisions in smaller companies (up to 499 employees), while responsibility in larger companies and groups increasingly lies with the CIO or CTO. Specialist departments, purchasing and vendor/risk management are also having an increasing say, as comparison with the previous year shows (2018: 15.4 percent; 2017: 6.6 percent).
Digitalization, cloud and security are the hottest topics
Internal IT is currently primarily concerned with digitalizing business processes (32.4 percent), cloud computing (32.1 percent), security and cyber security (29.4 percent) and IT-based innovations (28.8 percent). In this extremely challenging technical environment, companies are requiring increasingly more external support. The primary areas sought are experts with skills in software development (34.1 percent), IT architecture and design (29.9 percent), training (26.9 percent) and data protection/security and consulting (25.2 percent each). There are significant differences between large and small enterprises, however; while larger companies prefer to handle data protection in-house (only 21.1 percent of entries), it is the second most important external skill for medium-sized companies (31.9 percent). Conversely, large enterprises tend to rely more on external trainers and training, hardware needs and IT-related engineering.
The trend towards outsourcing IT continues. The proportion of companies that do not outsource at all is expected to fall from just under 30 to less than 20 percent over the next five years. But which sourcing strategy are the decision-makers pursuing? Today, approximately 17 percent of those surveyed are engaged in full IT outsourcing. Looking to the near future, decision-makers assume that this area will grow only slightly. Cloud services in particular are becoming increasingly important. Today, the largest area overall is selective outsourcing (a total of 31.4 percent of entries), which is when larger sections or individual tasks (“outtasking”) are handed over to external parties, or project staff members are temporarily integrated into the company. A majority of companies that outsource is in favor of working with a small circle of service providers (64 percent of those surveyed rely on two to five partners) as opposed to multi-sourcing.
Outsourcing processes – bringing in knowledge
Besides the availability of resources (21.9 percent), respondents hope for greater operational stability (19.7 percent), better service quality (19.1 percent), faster provision of new functionalities and compliance with security requirements (18.8 percent each), as well as greater agility (18.6 percent) and flexibility (17.5 percent). In cooperation with service providers, they particularly require pronounced technological and industry expertise. Markus Ley, CEO of Allgeier Experts: “The results of this study illustrate the role service providers are playing today due to the multitude and complexity of IT tasks. Service providers are no longer used by companies merely to relieve IT management or to cover peaks in demand, but as partners on equal footing who are expected to consult on complex issues and help develop specialist knowledge within the company by creating an internal transfer of knowledge among employees.”
Get the complete study
The results of the study are based on a total of 361 completed and qualified interviews conducted by IDG Research Services through an online survey in February 2018. You'll find the complete study here (in German). Moreover, several graphics from the study can be accessed in our download area.
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