A growing trend towards IT insourcing

This article was first published in Finansavisen

PA Consulting’s Tom Krohn, IT transformation expert, is quoted in an article exploring the results of new research from Whitelane Research and PA Consulting.

In recent years, Norwegian companies have seen strong growth in the outsourcing of services. But the trend of strong growth is trailing off, with insourcing a growing movement. The report explores an increasing trend towards moving services back to the business. “We have reason to believe that the coronavirus crisis will only further amplify this insourcing trend,” says Tom.

"Many companies have really experienced the vulnerability of computer systems across the globe in recent weeks and are now exploring the possibility of moving these services home," he adds.

Customer satisfaction

The annual customer satisfaction survey saw Nordic companies asked about their future outsourcing needs. Of the 340 companies that participated in the survey, one fifth are in Norway. Manufacturing & Production, Financial Services and Insurance were the three largest industries to participate in the survey.

The report finds that nineteen per cent of Norwegian companies say they will outsource less over the next two years, compared to 11 per cent in last year's survey. For those companies planning to bring more of their IT operations back in house, the most important drivers are developing a scalable model, lower costs, greater pressure on their core business and a desire to improve service quality.

For those companies planning to bring more of their IT operations back in house, the most important drivers are developing a scalable model, lower costs, greater pressure on their core business and a desire to improve service quality.

“Organisations also want a smoother way of working and now prefer to use suppliers locally, which makes it easier to get things done than on a video link to India, for instance”, adds Tom.

Norwegian customers most satisfied

Furthermore, the survey shows that 56 per cent of respondents are very satisfied or satisfied with their IT contracts. Only one per cent are very dissatisfied. Norwegian businesses have the highest percentage of satisfied customers, at 61 per cent.

At the Nordic level, the Indian firm TCS is providing the best IT services, just as they did in 2019, according to the survey. The company scores a customer satisfaction of 81 percent, an increase of four percentage points from last year. Just behind, Basefarm follows with 80 per cent customer satisfaction, while Sopra Steria moves up one spot and takes third place.

Norway cloud management performance

The survey also reveals that Norwegian companies are the leader in migrating services to the cloud.

More than half of respondents in Norway say that more than 50 per cent of their entire application portfolio has been moved to the cloud. This is significantly higher than the other Nordic countries, says Krohn.

In the cloud services category, companies are ranked in two different subcategories, infrastructure as a service (IaaS) and software as a service (SaaS). Within the infrastructure category, Amazon Web Services (AWS) moves ahead of Microsoft Azure in Norway. In the software category, Microsoft takes top spot, with Google Suite in second place.