Prospectus – Twelfth Edition
outsourcing Performance 2014 The annual Benchmark of client satisfaction in the Dutch market
prospectus | outsourcing Performance 2014
preface
Who has the appropriate response to the changing demand? From the many discussions that Giarte constantly has with organisations that outsource IT operations a clear connecting thread can be discerned: a service provider often delivers which has been agreed, but the growth potential is still limited if he does not deliver what is really needed. Even if the current application runs like a charm, the management contract can be terminated just like that if a customer has taken the path towards a service model and the service provider continues to deliver in the traditional manner.
With creativity and the necessary discipline, enough successes can be achieved in the market. This year, Outsourcing Performance once again shows where the opportunities lie and whether service providers are properly prepared to seize them. Together with you, we, as Giarte, formulate an appropriate response to the changing needs of your customer base. This prospectus describes the opportunities for participating this year.
Marco Gianotten
When extending workplace contracts, client organisations look at the performance over the past few years, but they assess their current provider primarily on the vision they have of how the workplace concept is going to change within the next five years. Without a clear vision of the future, the service provider leaves the door wide open for the competition.
Managing Director Giarte
Outsourcing Partnership Process
The new market reality requires a lot of creativity and imagination on the part of service providers. Working on the basis of rigid and standard services means that you quickly side-line yourself. Client organisations are looking for a clear story that is in line with their own situation. At the same time, the level of expectations becomes ever higher: a consequence of the increasing impact of IT on the continuity of operations. Selling services that you are not good at, thus immediately entails a degree of risk: failure becomes ever more rapidly visible. Customers therefore prefer a services portfolio with the focus above an old-fashioned ‘you ask – we deliver’ approach.
start
Effort
success
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it-outsourcing
The Dutch market for IT outsourcing change of a contract renewal with the current service provider (reletting) Application Management
6
Infrastructure Management
29
42 34
10
change of a contract renewal per client group
23 36
20
100% 88
90%
Detractors
88 80
80%
Passives Promoters
70%
End User Management
12
43
35
10
60% 50%
0%
20%
40%
60%
80%
100%
46 37
40%
36
30% Probably not
Probably
20%
Possibly
Certainly
10% 0%
Percentages above indicate how many respondents within the group will ‘probably’ or ‘certainly’ renew the current contract (reletting).
0 Application Management
4 Infrastructure Management
0 End User Management
The graph above shows the chance of reletting based on the recommendation. Detractors do not recommend their service provider, Passives give no negative or positive recommendation, and Promoters will (certainly) recommend their service provider. The graphic shows that Detractors will not renew their contract, while Promoters are very loyal to their service provider.
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it-outsourcing
agility and flexibility require future-proof IT
There are many parties active in the Dutch market for IT outsourcing. Last year, 31 service providers were included in the results of the study. Outsourcing has acquired a permanent position in the IT delivery strategy within large organisations. Only very few organisations are planning to be entirely self-sufficient again in this field. They are, however, looking for new strategies in order to distribute the work more effectively and thus also bring in new players. A lot of growth in the field of outsourcing comes from medium-sized organisations. IT now has just as much impact on business continuity as it does with larger organisations. And they are struggling to attract the right talent to cater for the increased IT demand. Outsourcing is also a logical step for them. With the increasing interest in IT outsourcing in the mid-market segment, we also see the emergence of new service providers that cater for this need. It is expected that this number will continue to increase in the coming years. The new players come from the Netherlands, but also from abroad or from adjacent markets: names like Microsoft and Salesforce increasingly appear as service providers. In recent years, great strides have been taken in the professionalisation of the area of expertise. There is no longer any question of structural dissatisfaction. The challenge for service providers has now actually been turned on its head: client organisations are banging on the door for innovative services, but believe that they are being served too slowly!
now
then
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outsourcing performance
Outsourcing Performance The Dutch market for IT outsourcing is mapped out each year by Giarte in the form of the Outsourcing Performance study. Decision-makers within organisations that outsource all or part of their IT facilities, offer their opinion about the relationship that exists between customer and service provider. The insights that emerge from all the collected input provide a complete overview of the developments within the client base of a service provider and of the Dutch market as a whole. Outsourcing Performance can boast of a long history: Giarte is conducting the research for the twelfth time in 2014. Because the market for IT outsourcing changes so rapidly, Giarte’s point of departure is that looking forward generates more value than rendering detailed historical perspectives. Therefore, since the start of the study, changes have been implemented each year in order to properly identify changing market conditions. Outsourcing is a market where trust forms the basis for all decision-making. The quality of the relationship is therefore just as important as the quality of the services performed. The main aim of Outsourcing Performance, as perception research (the study asks for the opinions of decision-makers), is to provide service providers with realistic and unfiltered feedback about their client relationships. This is important
because the quality of the relationship has a predictive value for the growth potential within an account. Giarte gives the study participants a thorough check with respect to the commercial potential within the entire customer base. Participation in the study also has external benefits: Outsourcing Performance gives service providers an external validation of their activities. Service providers let customers and prospects see that they have a solid customer base and rely on mature market feedback. Results of the research appear both in the yearbook published by Giarte and on the Outsourcing Performance website, on which each assessed service provider has its own profile.
research response 2007-2013 2007
2008
2009
2010
2011
2012
2013
Number of respondents
274
275
306
354
403
400
526
Number of organizations
240
242
277
292
306
293
347
Number of unique relations
550
674
646
584
705
682
805
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outsourcing performance
Research structure Outsourcing Performance focuses on the customer relationship, which is examined from various angles. A number of aspects are examined at the level of the service provider as a single organisation and a number of additional aspects are investigated in each domain. Outsourcing Performance has three domains: Application Management, Infrastructure Management and End User Management. The overall study design is as follows:
The questions per domain cover the recommendation, the satisfaction with delivery and the commercial opportunities. In addition, Outsourcing Performance describes the quality of the relationship by presenting the respondents with eight propositions. The eight propositions have a structure that commences with the foundation of a relationship and then works towards its strategic aspects. The figure below shows the structure used for last year’s study; Giarte reserves the right to further amend the design for this edition of the study.
overview methodology
building blocks of outsourcing relationships Asked once per service provider
Asked per domain Satisfaction standard delivery Satisfaction non-standard delivery
Strategy right
Future Orientation
Recommendation
Reletting
challenging partner Commitment
productive partner
Share of wallet Feedback
8 relationship building blocks
Delivery Mandate
professional partner Control
Quality Management
trusted partner Basics right
Reliability
Act-as-One
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outsourcing performance
Participation in the study Participation in the study is in principle open to every service provider. However, certain constraints apply with regard to the size of the customer base and the contract volume. These determine whether participation generates sufficient value for an individual provider. On this point, Giarte always consults new parties wishing to participate, and reserves the right not to include parties in the results. Outsourcing Performance employs three broad service domains: • Application Management (AM) • Infrastructure Management (IM) • End User Management (EUM) At least seven evaluations are required in a domain for a player to be included in the research results for that domain. In the case of external publications, Giarte requires a minimum of ten evaluations per domain before results are released.
To obtain an Outsourcing Recommendation Score, Giarte imposes a lower limit of fifteen recommendations. These recommendations may be concentrated in one domain or spread among several domains, with at least seven recommendations being awarded in each domain. Contract review In preparation of the study, Giarte performs a contract review with service providers to gain an accurate image of the client group. The review aims to ensure that non-existing relationships are excluded from the results and to check the completeness of the client group. Giarte provides an overview of contracts to the service provider for completion and correction. Cooperation is completely voluntary and is separate from participation in the study. Service providers who do not participate in the contract review, do not obtain accountability for participating organisations afterwards.
planning outsourcing performance Deadline contract reviews
Contract reviews
Selection and invitation
Publication yearbook Outsourcing Performance and Outsourcing Performance Day
Reports ready for service providers
Data collection, analysis and production reports
Online survey
Presentations and workshops
In depth interviews with clients
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
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outsourcing performance
Design of the study
The results of the study
Outsourcing Performance provides insight into the opinion and motives of sourcing executives that have (strategic) control over the relationship with service providers. Giarte translates all information into complete profiles for each service provider. A profile is composed of the following elements:
Participants in the study receive detailed results from Giarte. The results are derived from the online survey and from a large number of interviews with sourcing executives, which are conducted both by phone and face-to-face. Participants not only receive a report with figures: they also receive the story underlying the figures. The results are supplied in a number of ways:
Quality of the relationship How does the client base see the service provider on the basis of eight characteristics that are important for developing a good relationship? Recommendation and satisfaction To what extent does an organisation recommend a service provider in one of the three domains (AM, IM and/or EUM) and how satisfied are they about the delivery organisation? Commercial opportunities in the market The probability that existing contracts will remain with the service provider (reletting) and the opportunity for generating more business within the client’s account (share of wallet). Giarte also reports on general market developments within the sourcing market that are relevant to a service provider’s business development strategy.
1. Report The quantitative results are processed in a clear report. Each year, Giarte examines the best way of rendering the results of the study. 2. Presentations and workshops Giarte presents the results during presentations with the service provider. Depending upon the form of participation, Giarte also provides workshops that delve deeper into specific subjects. The sessions can be tailored to specific roles (e.g. sales, delivery, and strategy), market segments or IT domains. 3. Profiles A description of each service provider with sufficient evaluations is included in the Giarte yearbook that is published in October. The study website also includes profiles that are updated during the year on the basis of the latest news and relevant developments.
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outsourcing performance
Purchase Options There are several options for gaining insight into the results of the study. Giarte has developed three different purchase options for the study:
Bespoke Upon request, Giarte provides support that is complementary to the purchase options of Outsourcing Performance.
purchase options Price
Focus
Basic
€ 12.500,-
intended for medium-sized service providers and new participants
Insight
€ 22.500,-
focused on an in-depth analysis of the existing client base
Excellence
€ 32.500,-
support of the growth strategy and business development
All prices exclude VAT. With registration, the full amount will be invoiced upon commencement of the agreement. Unless agreed otherwise, this invoice has a payment term of a maximum of 30 days.
Examples include: • One-to-one account reviews, where Giarte examines several strategic customer relationships and reports the outcomes on a non-anonymous basis with appropriate recommendations; • Relationship programmes, where Giarte helps to professionalise the substantive and commercial ties within the client base; • Content production, where Giarte provides support during the development of a substantive message for the go-to-market strategy. For these forms, Giarte will be happy to develop a bespoke proposal on the basis of specific requirements.
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outsourcing performance
Descriptions and deliverables of the purchase options Basic Suitable for service providers with a small client base who are seeking to improve their positioning to support their growth strategy. Service providers choosing this option gain access to the necessary knowledge that is crucial to progress to the next phase of maturity. This option is also suitable for service providers that do not yet have ten customers, but are seeking market knowledge and competitive intelligence. With the Basic option, qualitative feedback is very limited. The Basic purchase option includes the following elements: • Research report Outsourcing Performance • An explanation of the results in the form of one presentation • Marketing support via profile on website outsourcingperformance.nl • 50 printed copies of Outsourcing Performance 2015 • One invitation for Outsourcing Performance Day 2014 Insight This option is intended for service providers with a client base of more than fifteen organisations. With Insight, the focus is on gaining a deeper understanding of the developments within one’s own client base. This option not only provides analytical feedback, but also includes additional customer interviews to improve the interpretation of the quantitative results. The targeted in-depth analyses of this option are communicated in several sessions so that the results can be optimally distributed and utilised.
Excellence There is space within the Excellence option to respond to very specific information requirements of service providers that can only be answered with sufficient qualitative feedback. Giarte conducts in-depth interviews with CIOs and executives in order to analyse how service providers are positioned within the internal field of influence at client organisations. For a service provider, this produces a clear picture of the strengths, weaknesses, opportunities and threats (SWOT analysis). This purchase option also offers the flexibility to set to work with the results in several sessions. This option is therefore suited to service providers that require support at different departments within their own organisation. Together with the service provider, Giarte determines which insights are required and how they can best be communicated within the organisation. The Excellence purchase option includes the following elements: • Research report Outsourcing Performance • Deepening of the results on the basis of specific information requirements • In-depth client interviews • SWOT analysis • Presentation and dissemination of the results for different internal target groups (number on the basis of fair use) • Marketing support via profile on website outsourcingperformance.nl • 200 printed copies of Outsourcing Performance 2015 • Three invitations for Outsourcing Performance Day 2014
The Insight purchase option includes the following elements: • Research report Outsourcing Performance • An explanation of the results in the form of two presentations to a group of your choice • A deepening of the figures by means of additional interviews • Marketing support via profile on website outsourcingperformance.nl • 150 printed copies of Outsourcing Performance 2015 • Two invitations for Outsourcing Performance Day 2014
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resources
Yearbook and Outsourcing Performance Day Yearbook It is now customary for Giarte to present the results of the study in October in its Outsourcing Performance yearbook. In addition to the research results, the book also contains interviews, best practices and analyses of the latest market developments. The book is sent to all IT sourcing executives in the Dutch market. Service providers that receive sufficient evaluations in the study have their own profile in the yearbook. The length of the profile depends upon the number of evaluations. A service provider with fifteen or more evaluations has a complete profile; with fewer evaluations the profile is limited to a brief description. Giarte is completely objective in everything that is published. Outsourcing Performance Day The respondents who express their opinion about service providers are presented with the results of the research on Outsourcing Performance Day. This afternoon seminar has developed over the years into a networking event where research, vision and best practices come together in a varied programme. The launch of the new yearbook takes place at the end of the afternoon. Service providers that purchase the study’s research results are welcome to attend the event, with the number of invitations dependent upon the purchase option. The principle adopted by Giarte is that eighty percent of the participants originate from the demand side of the market.
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resources
Website and communication Website Outsourcing Performance has its own website (www.outsourcingperformance.nl) with detailed information about the sourcing market. During the year, the site is supplemented with the latest news, market analyses and comments by analysts. The website also includes profiles of all the examined service providers. The site is also useful as a platform for reaching and informing prospects. It is, for example, possible to include client cases in a profile and to draw attention to one’s own event in the field of sourcing. Communication Respondents receive feedback about their own service provider(s) to a limited extent, depending on the level to which the organisation contributes data. As well as general results, other aspects from individual service providers are communicated in public articles, research notes and possible articles from the press: • The Outsourcing Recommendation Score, including qualitative explanation and the size of the three recommendation groups for the service providers • Satisfaction scores in the areas of Application Management, Infrastructure Management and End User Management • The market perception of the position of service providers The press will only receive the information as indicated above, and the generally available respondents’ yearbook and information about the general market developments if they have asked for it specifically. Giarte does not have any influence on journalistic freedom and how the provided information is used.
Outsourcing Performance
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About Giarte Giarte records experiential knowledge and perceptions about IT services. With Outsourcing Performance, we have been organising an annual comparison of customer satisfaction about outsourcing for more than ten years. With the yearbook and associated online publications, we aim to further increase the transparency and maturity of the outsourcing market. In 2013 a total of 805 unique relationships with 347 different organisations were assessed. Add to this the hundreds of interviews and in-depth analyses, and you have Outsourcing Performance: the knowledge source we draw from to interpret market developments and trends, as well as the organisation of workshops, the sharing of best practices and the provision of advice. We support both outsourcers (demand side) and service providers (supply side) in the market. This is often in combination (customer and supplier): examples include facilitating a breakthrough workshop for innovation or supporting the dialogue about new-style performance management. We also use our knowledge and expertise, together with partners, in order to align SLAs and KPIs with user experience. We bring business and IT organisation closer together and promote cross-pollination. Giarte is also active internationally with the framing, measuring and improving of IT customer satisfaction. With ITsatÂŽ, we monitor the perception of IT services by more than 300,000 end users, including customer opinions about the quality of service management processes.
Colophon Giarte Media Group BV Jacob Bontiusplaats 9 1018 LL Amsterdam P.O. Box 890 1000 AW Amsterdam Telephone 020 622 3444 Fax 020 638 4039 info@giarte.com www.giarte.com www.outsourcingperformance.nl Š Copyright Giarte Media Group BV, Amsterdam, November 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the copyright holder.
We develop tools for intelligent analyses that clarify the causes of dissatisfaction and enable the effect of improvement actions to be monitored. www.giarte.com
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Colofon Giarte Media Group BV Jacob Bontiusplaats 9 1018 LL Amsterdam Postbus 890 1000 AW Amsterdam telefoon 020 622 3444 fax 020 638 4039 info@giarte.com www.giarte.com www.outsourcingperformance.nl Š Copyright Giarte Media Group BV, Amsterdam, oktober 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, Âelectronic, mechanical, photocopying, recording or otherwise without the prior written permission of the copyright holder.
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www.giarte.com