European bosses snub Asia for local providers
Channel benefits as IT managers prefer their local suppliers, market watcher KPMG claims
UK and European IT bosses are turning their backs on low-cost Asian IT providers in favour of more flexible local suppliers, according to KPMG’s second annual review of the European technology sector.
The survey is based on the views of more than 100 chief information officers across Europe. Only a third of those questioned said they were likely to increase IT spend with suppliers from Asia’s emerging markets.
Crispin O’Brien, head of technology at KPMG UK, told CRN that the research was positive news for the channel.
“This is a marked change from two or three years ago, when most chief information officers would have indicated that they were moving to Asian suppliers,” he said.
“People are finding that European outsourcing suppliers can offer a better front-office service because they understand local complexity. This means that India only really has an advantage in commodity transactions such as processing expense claims.”
In contrast, more than half – 51 per cent – of respondents said they planned to boost IT services spend with local suppliers. About 44 per cent of respondents plan to boost spending through local suppliers of software and mobile devices.
The only criterion European providers were marked down on was price competitiveness, for which twice as many respondents rated them below, rather than above, average.
Graham Jones, chief operating officer at security integrator Integralis, said he agreed strongly with the report’s findings.
“We deal with a lot of the big banks and it is clear that there has been a backlash against offshore outsourcing,” he said. “From a security point of view, customers are finding that there are a lot of hidden costs they didn’t originally bargain for.”
Alex Donnelly, portfolio manager for applications at VAR Damovo, said: “Around the contact centre, we are seeing a number of larger organisations experiencing some problems in the operations they have outsourced and many are returning to the UK.”