For IT Services Professionals

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Executive Summary

IT outsourcing services in Europe show signs of strong demand across industry sectors. Media and publishing firms — followed closely by telecom firms, utilities, and retailers — are driving outsourcing spending in areas like software development and maintenance. Other sectors like financial services are actively outsourcing part of their IT infrastructure, such as data centers or telecom networks. However, existing outsourcing clients face a serious challenge with underperforming outsourcing contracts — an average of two contracts per firm — mainly arising from poor contract management. Moreover, while vendors largely meet service-level agreements and cost targets, poor requirement definition at the contract stage means that IT shops often fail to obtain technology and process innovations from their outsourcing suppliers. Additional security concerns and doubts about vendors' quality of service could pose a threat to further expansion of Europe's outsourcing market.

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