Customers will continue to rely on channel talent

Customers are continuing to struggle to recruit skilled staff and are looking to the channel to fill the gaps, with outsourcing levels set to rise as a result.

According to the 2023 UK IT sourcing study from Whitelane Research, carried out in collaboration with PA Consulting, it is clear that spending on external expertise is set to continue.

The research found the public sector was the hardest hit by the skills gap, with financial services the next highest sufferer.

In the UK specifically, 63% of the organisations quizzed revealed they planned to outsource at the same rate or more in the next two years. A third were expecting to spend more than before.

Customers are keen to lean on external help with automation – the top IT investment area – in the hunt for technology that will help lower costs and reduce the need to hire more staff. There are also signs that users want to reduce the complexity of their IT estate and unlock the value of investments they have made in recent years.

The research also found that almost two-thirds of UK customers are satisfied with their IT sourcing provider. For the first time, the report included a number of IT service providers, including the likes of Computacenter, which also fared well in the satisfaction stakes.

Satisfaction with cloud providers remains high, with 74% of all 1,440 cloud sourcing relationships evaluated as “satisfied” or “very satisfied” – 10% higher than IT sourcing relationships. Amazon Web Services (AWS) remains top of the infrastructure cloud platforms ranking with 80%, while Microsoft Office 365 is number one again for software cloud platforms with 85%.

Manish Khandelwal, IT transformation expert at PA Consulting, said there was pressure for businesses to transform, but challenges in finding the talent to support that goal.

“Headwinds in the wider economy mean the need for transformation has never been greater for a number of UK organisations. However, the war for talent continues to be intense, coupled with real and significant cost pressures,” he said.

“This is pushing organisations to rebalance their technology delivery organisation and operating model, optimise the use of outsourcing and insourcing, utilise talent at global locations, and maximise the value from the technology investments they have made over the last few years,” added Khandelwal.

“The outsourcing industry continues to thrive, and the industry players that are innovative, proactive and can translate advancements in new technologies to deliver practical, tangible solutions at pace will have the opportunity to grow even stronger,” he said.

The channel has increasingly been seen as the answer to customer talent problems. Research from Dell in April indicated the channel was key to helping customers plug the innovation gap, and there were also indications that partners are well placed to help users with cyber skills shortages.