Professional Documents
Culture Documents
on
Dissertation
SP Jain Center of Management
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I would like to thank my colleagues and my mentor for all that I have learnt from them during my past
two years. The attempt in the report is to utilize some of the concepts of services marketing, market
research & quantitative analysis to analyse current market dynamics and forecast future trends for IT
outsourcing. I will thank all my colleagues in the college & at work; who have contributed to my
research in some forms. Lastly I would thank all the faculty, admin & support staff of SP Jain for their
selfless support and co-operation and in making the learning process, absolute fun.
Thanks
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I hereby declare that the matter included in this dissertation report entitled “Identifying choice drivers
& Quantifying Expected Service Levels for IT Outsourcing in UAE using ServQual Analysis” is the result of
study and interviews carried out by me with various decision makers. I further declare that this is my
original work and has not been published anywhere before. This Project Work has been carried out for
the sole purpose of submission in partial fulfilment of Executive Masters in Business Management
(EMBA) in Operations Management at SP Jain Center of Management, Dubai.
Table of Contents
ACKNOWLEDGEMENT ............................................................................................................................................................ 2
EXECUTIVE SUMMARY............................................................................................................................................................ 4
RESEARCH OBJECTIVES ........................................................................................................................................................... 5
BACKGROUND TO THIS PROPOSAL ......................................................................................................................................... 5
DYNAMICS OF UAE IT ENVIRONMENT .................................................................................................................................... 8
ECONOMIC AND POLITICAL ENVIRONMENT ..........................................................................................................................10
SWOT ANALYSIS OF UAE IT SERVICES PROVIDERS ..................................................................................................................12
SERVQUAL ANALYSIS .............................................................................................................................................................13
UAE SERVICES MARKET QUADRANT ......................................................................................................................................24
MARKET DEVELOPMENTS BY SERVICE TYPE ...........................................................................................................................25
MAJOR FINDINGS ..................................................................................................................................................................26
RESEARCH METHODOLOGY ...................................................................................................................................................31
PROJECT SCHEDULE ...............................................................................................................................................................33
ANNEXURE: ...........................................................................................................................................................................34
Questionnaire ................................................................................................................................................................................ 34
Questionnaire Coding .................................................................................................................................................................... 40
Codes of Conduct ........................................................................................................................................................................... 44
References: .................................................................................................................................................................................... 44
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In UAE we have seen steady growth in IT outsourcing over past few years and what began as a
low-cost tactic for staff supplementation by managers is morphing into a strategic option available to
business planners and technologists. The effort in this report is to identify factors & choice drivers for
decision makers to satisfy minimum expectations out of IT outsourcing & services companies. Stark
finding of the report was that the companies not only expect the service providers to address their IT
situations, add value to existing services but also own specific business areas backed by technology.
They clearly expect a strong strategic partner than a tactical efficient vendor.
Trust and empathy were the two most sought after parameters by most of the respondents.
While UAE always had Multi-sourcing users where they did business with multiple service providers,
depending on where they can find the best skills for the best price the new trend shows more and more
companies would prefer a one stop IT outsource partner. This partner is expected not only manage and
commit to their SLA’s – the traditional yardstick for measuring results, but also play an active role in
client’s business imperatives.
The report also concluded that most UAE service providers are tactical in their approach. This
also kind of explains the reason why many companies continue to have in house IT and cost centre’s for
IT support. Respondents expect IT outsourcing companies to form steering committees along with
them, which will be empowered to over-ride contract, services & rates if there is a sudden change in the
market & business conditions. Such empowerment will help business continuity without impacting the
overall performance and also enable the partnership to be of strategic in nature.
The big question I tried to address was; in spite of obvious advantages why isn’t outsourcing of
services in UAE; adopted as well as in other countries? We also found business loss and project failures
to be the biggest insecurity and leading factors for reluctance to outsource. The changing dynamics
means that clients will challenge the outsourcing companies not only to explain TCO, ROI of their
investments but will also expect them to commit to their IT outsourcing translating into financial
benefits. New methodologies are being evaluated for the technology partners to reap benefits if the
business improves or pay penalty if technology services disrupts business operations. Overall the trend
is positive for companies in achieving the symbiotic relationship which is the backbone of any form of
outsourcing.
The research involved surveys, questionnaires, fact to face interviews and tools used are SPSS, Excel.
ServeQual analysis was used to quantify the expected service levels and resultant gaps.
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The objective of this research is to understand the choice drivers & motivators for outsourcing
business applications and in house IT services to service providers. Identify factors decision makers
consider to satisfy minimum expectations out of IT outsourcing & services providers and the resultant
gaps and challenges in the delivery of these services in UAE.
UAE has witnessed exponential growth in trade and business in past 4-5 years and its IT services
market is expected to worth 1 billion dollars by 2010. The market has steadily matured and operations
have become intense. Though deployment, system integration and support services remain the biggest
IT services segment; effective management of internal costs and external competition is increasingly
exerting pressure on companies to outsource their IT services. In house IT and group IT functions are
unable to cope with business pressure and are becoming tactical in nature. Most outsourcing projects
to date have sought to reduce costs. This new survey shows that executives who have experienced the
full range of outsourcing’s benefits understand it can offer a powerful boost to their business. The right
outsourcing strategy can deliver tangible, measurable and predictable value that does more than
reduce costs. Even the smallest companies need some form of high availability of their IT solutions. As a
result outsourcing of application development, datacenter activities, corporate BOT (Built Operate &
Transfer) projects, network and desktop outsourcing, remote managed service categories are seeing
impressive growth year-on-year in UAE.
The big question we needed to answer is; in spite of obvious advantages why isn’t outsourcing
of services in UAE; adopted as well as in other countries?
The IT services market here continues to remain heavily dependent on standard support and
deployment services. Spending on hardware support and installation and customization services is
higher in the UAE than in most mature markets. The reluctance to outsource IT infrastructure and
services that is so critical to any business remains the single biggest inhibitor in the market. Outsourcing
has been the cause of much debate in recent times. There have been arguments for and against
outsourcing.
The supporters of outsourcing are primarily those motivated by the desire to cut costs and streamline
their business processes. For all those against outsourcing the worry is primarily business disruptions,
job losses, service degradation, project failure and costs. But we have seen recently companies are
unleashing the power of outsourcing to help them innovate by speeding business processes, reducing
the pain associated with regulatory compliance and allowing companies to focus on the core business.
Outsourcing makes companies more competitive and this in turn benefits the end-consumers.
Whatever may be the conclusion, the fact remains that in these days of heavy competition, it’s become
a necessity to outsource certain components of a business in order to remain competitive.
This report puts an effort to analyze and quantify the expected service levels for corporate
outsourcing decisions. We also look at the market dynamics which influences a decision maker during
outsourcing decisions. Companies expect financial benefits from outsourcing and that’s the biggest
sales challenge for outsourcing providers to present evidence of cost savings and business benefits
through outsourcing. Consultative selling coupled with long sales cycle also proves to be an expensive
practice. Services companies of the region have gone thru continues improvements to address changing
customer needs and articulate their knowledge and understanding of business to reduce companies IT
TCO (total cost of ownership).
Unlike some mature markets where service providers benefit from both economies of scale &
lower setup costs the companies in UAE have long sales cycle, huge dependence on services and
opportunity cost to maximize profits. In the past decade the outsourcing has matured especially since
the burst of dot com’s, increased compliance levels and with sharp fall in infrastructure costs. The
matrix of profitability and opportunity cost in each segment are driving forces for Service providers to
innovate and align their offerings in future to catalyze outsourcing as a practice. Given the immense
opportunity it is imperative for the service providers to get the pulse of customer requirements and
gear up their focus towards corporate requirements. Similarly it becomes strategic for outsourcing
companies to focus on their bottom line and look at their clients as partners and not as customers & to
understand the dependencies of their model on this symbiotic relation.
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While outsourcing clearly reduces costs, its ultimate benefit to companies is that it offers a
shortcut to innovation— which companies in UAE are realizing they need more and more; due
competitive and conducive economy for booming business. Successful outsourcing in the other
economies of the world has proven that companies are unleashing the power of outsourcing to help
them innovate by speeding business processes, reducing the pain associated with rising costs,
regulatory compliance and allowing companies to focus on the core business.
Even regional players constrained by tradition, legacy information technology and layers of
bureaucracy can quickly drive change throughout their organizations by using outsourcing. We have
seen many companies in various trade free zones of Dubai, adept to global suppliers and struggle and
smart outsourcing can help them eliminate learning curves, acquire best-practice experience, refresh
their thinking and embrace new, more efficient methodologies—instantly. In the UAE’s fast-changing
marketplace, this can be the difference between success and failure. My interaction with respondents
of survey shows that satisfaction levels are high among executives who have successfully outsourced.
But some respondents highlighted that companies have had disappointing experiences and that most
companies which have outsourced have fired an outsourcing company.
While it is easy to find vendors that promise cost savings, it is much harder to find partners who
can deliver on their promises. Companies are becoming more sophisticated consumers of outsourcing
services. As executives seek new outsourcing partners, they will increasingly look for partners or
providers that offer experience—not just in the specific IT functions being outsourced, but also in
developing the kinds of partnerships that are critical for success. In the past, many IT outsourcing
companies sold their services on the strength of their process quality, infrastructures and certifications.
Those things will continue to be the minimum compliance to compete. However, what becomes more
critical as companies seek to achieve greater benefits of innovation and shareholder’s value, is the
willingness to commit to client success. That partnership will only succeed if service providers share
their clients’ risks—as well as their rewards.
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The UAE IT markets have matured since the success of free zones (viz. Internet City), leading to
fewer new high-growth niches and pushing companies for differentiation. At the same time competition
has increased putting pressure on prices and margins. As long as service providers offer something new,
they can charge a premium, but there aren’t that many new technologies around and typically the
vendors that are close to the technology development will have a lead in offering IT services related to
this new technology. Traditional service oriented companies are swift followers of trends and thus have
no drive for service innovation. Support and other entry-level services are barely profitable these days
due to increased inflation. Bandwidth is still a premium and thus there is limited maturity in the high
end web and over the internet services and solutions. Though IT companies here aren’t renowned for
their services there is a marked improvement in the past many years due increased compliance and
adoption of standards like ITIL. There are various challenges also which needs to be addressed. Some of
the main challenges faced in UAE are
There is immense pressure of most IT service providers to increase head counts and look out for bigger
office space. Dubai Internet City has more than 600 companies and the free zone will sooner or later
have to expand its perimeters. Cost of employees is also on the rise and this puts further pressure of
operational expenses.
Resource Crunch
There is increasing demand for specialists & key skills. Companies find it difficult to source right talent
locally due to visa restrictions and tough laws. Free zones have led the way but the region is yet to
adopt all the best practices. Improper recruitment practices also prevail in many organizations due to
poor HR which leads to depleted skill matrix and cartels within various functions.
Infrastructure Issues
Due to conservative capacity planning coupled with explosive growth in past few years there is
immense pressure on bandwidth, power and datacenter space availability. Unless companies adopt
dense infrastructure setups like SAN, Blades, Virtualization UAE will soon run out of datacenter space or
faced with a tricky prospect of reinvesting on new setups.
Best Practices
Due to all the above factors there are many service providers which compromise of best practices
within their organizations. For example high available solutions, disaster recovery sites, business
continuity practices will not be adopted by many organizations within UAE unless the capital
investments are skewed to reasonable levels.
Services
After the collapse of margins in infrastructure and hardware lot of companies focused on services and
as a result now margins in services are under lots of pressure. Services are key to survival due to direct
contribution to bottom lines and unless companies differentiate, working on reasonable margins will be
a tough ask.
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Economic and political environments play a vital role in the outsourcing both for vendors and
decision makers. While outsourcing coupled with off shoring is the only option for unstable regions and
stable economic and political environment is a perfect habitat to outsourcing companies to deliver and
compete at highest levels. UAE has major advantages on these fronts. It has consolidated on its strong
economic performance in past few years and has gained lots of investments and is a preferred
destination for IT services for the whole of middle east. Although economic policies are liberal and
business-friendly especially in the free zones, government restrictions limit market competition in
general, and foreign competition in particular. On the export side, UAE companies that compete
internationally are in most cases government-owned, with access to ample finance on favorable terms
and their management is frequently the same entity as their regulatory authorities (e.g. airlines and civil
aviation authority, ports, the Dubai International Financial Centre). On the IT segment though
competition is more even.
The UAE's GDP rose an estimated 6.2% in 2004, bringing total gross domestic product to $87.3 billion
compared to $80.2 billion in 2003. The current account balance stood at $16.6 billion, or 19% of GDP.
The UAE is much more diversified than the other Gulf States, but the oil sector still accounts for
approximately 25% of GDP, 34% of exports, and 75% of fiscal revenue. Non-oil sectors are anticipated to
expand in the coming years at rates between 4.5% and 6%, underpinning strong growth for the UAE
economy. The looming reforms imposed by the UAE's obligations under WTO accession will boost the
performance of the non-oil economy. Income tax is not charged in the UAE. Some large foreign
businesses pay direct taxes (e.g., banks), whereas oil companies are taxed on profits. Indirect taxation,
however low, is imposed at the emirate level. The UAE's interest rate tracks U.S. rates due to the
dirham’s peg to the dollar. Low interest rates combined with no to little taxation have helped the UAE
to maintain very high investment levels as well as to the support the consumer spending boom, most
notably in the property market.
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STRENGTHS WEAKNESS
OPPORTUNITIES THREATS
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In service quality evaluation we have to treat data having different kinds of scales. In order to
obtain a measure of the service quality level a conventional ordinal rating scale for each attribute of a
service is used. Moreover additional information on the customers or on the objective characteristics of
the service is available (interval, ordinal and or categorical scale). In the latter the importance or weight
assigned to the different items must be also considered (compositional scale). To analyze these
different kinds of data particular precaution should be used, a transformation of quality level perceived
(expected) data in quantitative scale is carried out before a multidimensional data analysis.
Gap
Dimension Expectation Perception Scores Weightings Weighted Average
Tangibles 3 2 -1 13.04 -0.13
Reliability 5 6 1 21.74 0.22
Responsiveness 7 5 -2 30.43 -0.61
Empathy 8 5 -3 34.78 -1.04
Gap Analysis :
The servequal score of -1.91 indicates that there is a huge gap in the expected and eventually
delivered service levels. This clearly also highlights the fact that companies tend to put cost on
priority than committed service levels offered by leading outsourcing players. In the coming few
years we will see more and more in house IT & desktop services to be outsourced to bigger
players who may not be economical but will offer super services and committed performance.
Gap
Dimension Expectation Perception Scores Weightings Weighted Average
Tangibles 8 9 1 36.36 0.36
Reliability 7 4 -3 31.82 -0.95
Responsiveness 4 4 0 18.18 0.00
Empathy 3 3 0 13.64 0.00
Gap Analysis :
On the server side business applications and managed hosting services the gap isn’t very high
probably also due to lenient expectations. Managed hosting services has been adopted by only
big enterprise and in some forms by small business but it still has been symbiotic in nature for a
long time. In the coming times the expectation will surge and client will expect not only
committed infrastructure and server support services but also will demand the service providers
to play more strategic role as their technology partner.
Gap
Dimension Expectation Perception Scores Weightings Weighted Average
Tangibles 5 6 1 18.52 0.19
Reliability 9 8 -1 33.33 -0.33
Responsiveness 8 6 -2 29.63 -0.59
Empathy 5 5 0 18.52 0.00
Gap Analysis:
Security and network are more of awareness business in nature and is still in a nascent stage with
very few client investing proactively on perimeter security and network services. Banks, oil
companies, government have been the primary targets in this segments and are driven more by
compliance than awareness.
Gap
Dimension Expectation Perception Scores Weightings Weighted Average
Tangibles 4 5 1 18.18 0.18
Reliability 5 5 0 22.73 0.00
Responsiveness 7 6 -1 31.82 -0.32
Empathy 6 7 1 27.27 0.27
Gap Analysis:
Though system integrators continue to be the biggest revenue collectors in the UAE It industry their
margins have continued to shrink over the past few years due to maturity in this segment. There is
very little expectation in terms of services here as a result price war if inevitable. Unless the system
integrators add value to their existing services this will no longer be a lucrative space. Smaller player
will struggle and will be dependent of renewal or existing client bases.
Total IT Outsourcing
Gap
Dimension Expectation Perception Scores Weightings Weighted Average
Tangibles 7 6 -1 25.00 -0.25
Reliability 6 5 -1 21.43 -0.21
Responsiveness 7 7 0 25.00 0.00
Empathy 8 4 -4 28.57 -1.14
Gap Analysis
It clearly shows that service providers are tactical in nature when commissioning and delivering
clients outsourcing requirements. They expect the service providers to insure all the pressure points
of business with integrity rather than as deliverables. This is one of the biggest hindrances for IT
outsourcing companies to compete against the internal IT divisions of companies.
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68% of respondents claimed Trust for the one of the more critical choice drivers when it comes to
outsourcing business critical IT functions to service providers.
One of the stark findings of the survey was that 68% of respondents felt there was huge scope of
improvement in the IT services which they were getting from their internal cost centre.
Almost 60% of respondents claimed business loss and business disruption as one of the most decisive
factors to overcome when it comes to taking IT outsourcing decisions.
Project failures and Business loss feature as the top two concerns for most IT outsourcing decision
maker. Addressing the insecurities brought upon by threats of datacenter, security & project failures;
leading to business loss, will continue to be the biggest challenge for service providers.
Regression Analysis
Notes
Comments
Filter <none>
Weight <none>
Input
Split File <none>
Warnings
For models with dependent variable Top quality seeked during IT Outsourcing Decision, the following variables are constants
or have missing correlations: Expensive. They will be deleted from the analysis.
Variables Entered/Removed(b)
Variables
Model Variables Entered Method
Removed
Job losses, Security Threats, Gaps-Are tactical in nature and not strategic, Business benefits
due to IT outsourcing has to always translate into financial benefits, Data Centre Failure,
Hidden Costs, They don’t understand business needs, We expect the outsourcing companies
to pay penalty for any business loss, Drop in Service Standards, Project or Partnership
1 . Enter
Failure, Business Loss, Outsourcing sales cycle of UAE are consultative in nature, Good
Regional Outsourcing company, Biggest Reluctance is that Business will get affected, It is
always good to outsource to a group company or internal IT division, Outsourcing within UAE
is expensive, Project Failures, Insufficient Budget(a)
Model Summary
a Predictors: (Constant), Job losses, Security Threats, Gaps-Are tactical in nature and not strategic,
Business benefits due to IT outsourcing has to always translate into financial benefits, Data Centre
Failure, Hidden Costs, They don’t understand business needs, We expect the outsourcing companies to
pay penalty for any business loss, Drop in Service Standards, Project or Partnership Failure, Business
Loss, Outsourcing sales cycle of UAE are consultative in nature, Good Regional Outsourcing company,
Biggest Reluctance is that Business will get affected, It is always good to outsource to a group company
or internal IT division, Outsourcing within UAE is expensive, Project Failures, Insufficient Budget
ANOVA(b)
Total 112.364 21
Predictors: (Constant), Job losses, Security Threats, Gaps-Are tactical in nature and not strategic,
Business benefits due to IT outsourcing has to always translate into financial benefits, Data Centre
Failure, Hidden Costs, They don’t understand business needs, We expect the outsourcing companies to
pay penalty for any business loss, Drop in Service Standards, Project or Partnership Failure, Business
Loss, Outsourcing sales cycle of UAE are consultative in nature, Good Regional Outsourcing company,
Biggest Reluctance is that Business will get affected, It is always good to outsource to a group company
or internal IT division, Outsourcing within UAE is expensive, Project Failures, Insufficient Budget
Coefficients(a)
Unstandardized Standardized
Coefficients Coefficients
t Sig.
Beta
Model B Std. Error
Gaps-Are tactical in nature and not strategic .445 3.456 .041 .129 .906
They don’t understand business needs .978 3.782 .215 .258 .813
Outsourcing sales cycle of UAE are consultative in nature .790 3.117 .180 .253 .816
Biggest Reluctance is that Business will get affected 1.025 3.261 .726 .314 .774
o R-Square
In statistics, the coefficient of determination R2 is the proportion of variability in a data set that is
accounted for by a statistical model. In this definition, the term "variability" is defined as the sum of
squares. There are equivalent expressions for R2 based on an analysis of variance decomposition. A
general version, based on comparing the variability of the estimation errors with the variability of the
original values, is
Our R-Square is 89% for the assumption that a client seeks for trust, empathy & ownership; which in
other way means that the service provider steps into the shoes of clients while providing its services.
The customers not only expect the client to address their insecurities but also take the addition mile
of owning the troubled areas. This is a critical finding and reviews the very integrity of the service
offerings.
This is the estimate of an analysis performed on variables that have been standardized so that they
have variances of 1. This is usually done to answer the question which of the independent variables
have a greater effect on the dependent variable in multiple regression analysis, when the variables are
measured in different units of measurement (for example, income measured in dollars and family size
measured in number of individuals).
The highest Beta are for Budget (0.527) and to the fear of business getting affected ( 0.726). This
signifies that both these factors needs to be addressed by the decision maker before is ventures into
successful IT outsourcing venture.
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VETRANS LEADERS
These vendors have large, mature These are the current top players of the
installed bases of customers, but no longer set market, with products & services that have built
the pace for the rest of the industry. These up large customer bases. These top service
vendors are no longer considered trend setters providers haven’t become leaders overnight.
as they once were. In some cases, this is by Most of the companies in this quadrant were first
design. If a vendor has made a strategic decision specialists or futurists at some point. As
to move in a new direction, it may slow companies reach this stage, they must fight
development on one product line and start complacency and continue product innovation,
M another. In other cases, a vendor may simply or else they’ll be replaced by the next generation
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become complacent as a top vendor and be out- of futurists.
E
T developed by hungrier new entrants and other
S top players.
H
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R SPECIALISTS FUTURISTS
E
Emerging players that are still very new These vendors offer cutting edge
to the industry and have not yet built up technology, but have not yet built up a large
much of an installed base. These customer base. With effective marketing and
companies are still developing their better awareness, these companies hold the
strategy and technology. There are many power to dethrone the current market leaders.
companies in Dubai Internet City who Futurists often shape the future of technology
become technology partners of leading with their innovations and new product designs.
global specialists and offer regional
services
Old players of the regions with
economies; who capitalize on their base
by offering niche products.
SERVICES
UAE Market Quadrants above is designed to illustrate how individual vendors fit within the
general technology services markets at any given point in time. I have tried to illustrate the Market
Quadrants in four sections. It is common for vendors to move between quadrants over the life of a
product and services, as their offerings improve and market requirements evolve.
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In the recent past the lead for the pie of UAE outsourcing has been taken by data centre
companies who offer various types of security, hosting and remote management services. Hosting
services in the UAE is gaining from growing broadband Internet penetration levels, which are among the
highest in the Middle East region. Prior to the rollout of ADSL access by incumbent operators, overall
Internet usage levels remained limited due to low bandwidth and the high cost of access. Internet usage
levels are, however, on the rise and as a result businesses are seeing a need to invest more in
developing an Internet presence for sales and marketing purposes. Demand for hosting services is
growing in relation to Internet access penetration levels, and, in particular, broadband penetration. In
terms of total number of customers, the market is heavily weighted toward basic managed and co
location services. Still, a high percentage of revenues comes from complex managed customers.
Although their numbers are small in comparison, average spending levels for complex managed
customers are significantly higher compared to basic managed and co location. This dynamic has
resulted in a small number of customers generating a large share of the market's value.
End users in the UAE are moving away from the basics of implementation and support to
customization and outsourcing. Moreover, organizations are warming to service models because their
IT infrastructure has been growing increasingly complex, necessitating highly trained IT specialists and
contractors. Competition especially last 2 years has intensified among IT services vendors in the UAE
last year. Local players dominated the scene, however, no one vendor controlled the market, with the
top ten only accounting for 54.2% of total revenue. Government-owned firms have entered the fray,
often winning key government contracts and reducing the available business for private vendors. The
time is ripe for consolidation.
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Almost 90% of respondents felt that their IT service providers are tactical in nature and exposed
lack of strategic technological partners.
From the servqual & respondents feedback, one stark finding was that the companies not only
expect the SP’s to address their insecurities but also own specific business areas backed by
technology. They clearly expect a strong partner than a efficient vendor.
80.7% of the respondents responded negatively to the benefits achieved out of outsourcing
their technology services to a group IT arm and highlighting their expectation out of the services
market.
Almost 95% of respondents expected/ensured credit notes and compensation for business loss
due to IT service disruptions through its technology partners.
As shown in the graph below business loss and project failures are the biggest concerns of
decision makers followed by Datacenter and Security threats. Another interesting point was
hidden costs was the least of bother for 84% respondents clearly signifying their focus is on
value additions than on costs.
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Trend Forecast:
Competition will intensify in the coming months and the companies will be forced to compete heavily
on differentiated and value added services. Services margins will shrink.
Impact:
Smaller companies will find it extremely difficult to compete with increasing operating expenses and
will be restricted to small business operations. There can be few big mergers and acquisitions but that
will be restricted to top players.
Trend Forecast:
UAE political scenario looks stable and IT services companies most of which is based in Dubai
shouldn’t be impacted irrespective of central political activities.
Impact:
The growth curve should be upwards and IT services should be worth 1 billion within few years.
Trend Forecast:
Middle East as a region may continue to experience turbulent times for the coming few years.
Impact:
UAE IT services companies especially the Outsourcing players should continue to benefit out of this.
Lots of banks and large enterprise will move their central IT systems to UAE and there will be
increased spending on security, DR & BCS services. Hosting and data security will sooner or later
become a government mandate.
Trend Forecast:
Oil prices will continue to fluctuate will not lose the appreciation it has got in the last 2 years.
Impact:
Companies involved will oil business and government should benefit from the oil prices as we have
seen in the past and should fuel additional spending. UAE government continues to be one of the
highest spenders in technology service and will continue to be prized prospect for service providers.
Trend Forecast:
Labor and in house IT costs will continue to surge putting lot of pressures especially on large
enterprise. Inorganic growth coupled with channel partnership will lead to more and more success of
multivendor ecosystems.
Impact:
Outsourcing will be a lucrative option but the clients will continue to challenge the sales to prove
financial benefits out of outsourcing; which will increase the sales cycles. Outsourcing will be
evaluated by many but only the very mature clients with clear paradigms will adopt the practice.
Trend Forecast:
Internal audits will become more stringent and comprehensive. As outsourcing as a practice picks up
IT operations will become more of a financial function for companies and the investments will be
scrutinized using various auditing models.
Impact:
Service providers will be challenged by the decision makers to prove cost benefits and layer value
added services with tangible TCO and ROI calculations. The sales cycle will get more and more
consultative in nature and there will be pressing need for SLA’s and penalties to be well defined in
contracts.
Trend Forecast:
The world for the first time in 2007 witnessed cyber war when Russian hackers launched a systematic
campaign on most of the Estonian government sites, crippling many functions and bringing lot of
embarrassment to the ruling government. Companies will be adopting more proactive defenses
especially on their IT perimeter with every increasing cost of failures due to consolidation and
centralization.
Impact:
All awareness business (viz. Anti-spam, intrusion detection systems, vulnerability assessment
systems, disaster recovery & business continuity services etc ) will continue to gain business and
companies will address their insecurities around business disruptions.
Apart from the above analysis some of the trends to monitor will be
o VOIP/Virtualization/IT Frameworks
o Off shoring
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This research would be qualitative and quantitative by nature, as we don’t know a lot about consumer
perceptions, and we want to find out the consumer attitude towards various options available. I intend
to use some Face to Face interviews, questionnaires & personal experience to complement my analysis.
Respondents will be selected randomly from various segments (viz. SMB’s, MNC’s). Then the data
gathered and processed using data analysis software’s and then findings are interpreted. For the sake
scoping outsourcing of Application Development is not factored in most of the research sections.
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Cities: Dubai
Usage: Decision makers & influencers of an organization involved IT services and outsourcing
activities.
Dubai
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While a detailed discussion guide will be prepared and shared with all, below is a brief list of
information areas that we plan to cover in this research.
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1. Questionnaire in English
2. Discussion guide English
3. Presentation of findings to the class and guide
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While there are several qualitative analytical techniques at our disposal, we anticipate using the
following analytical techniques:
ServQual Methodology
SPSS
Excel
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Week 5 Data and processing Analysis . Editing and coding. Data analysis using SPSS
software
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The following questionnaire is a sample questionnaire which was used during the survey to gather some insight
into decision makers psyche.
Respondent Serial
Number
checked
Company
Designation
Email: City:
WRITE
Phone: Mobile:
CLEARLY
(We will call back)
Branch Office 2
Small Enterprise 3
Interview place
Introduction
My name is Bijoy Raghavan and I am student of SP Jain Institute of Management Studies. Here is my college ID
card. We collect opinion about different products and services that you use now days. Your opinion is very
valuable for us and for the survey and will be kept classified or made public.
If you have some time now, this interview will take around 10 minutes. Would you like to participate in this
survey?
Please note that your name and contacts are only for my supervisor to check my work. Otherwise, your name and
contacts will remain confidential with us. The final research report will not be shared with any companies.
Do I have your permission to start this interview? Let’s go to a comfortable place where we are not disturbed.
SCREENING SECTION
Yes 1
CLOSE No 2
CONTINUE No 1
CLOSE Yes 2
Total IT operations 4
Q.4 What are the top three qualities you would weigh maximum when
you have to take any IT Outsourcing decisions? (read list after the respondents’ answer for aided
factors)
Reliable 1 1 1
Competency 2 2 2
Trust 3 3 3
Brand/Reputation 4 4 4
Past Performance 5 5 5
Client Base 6 6 6
Corporate Relations 7 7 7
Cost 9 9 9
UAE Based 10 10 10
Empathetic 11 11 11
Support 12 12 12
Services 13 13 13
Support 12 12 12
Q.6 What is your biggest reluctance when you have to Outsource your IT operations
Insufficient Budget 1 2 3 4 5
Job losses 1 2 3 4 5
Q.7 In a scale of 10 (0 being least important & 10 being most significant) rate the following parameters
for critical IT outsourcing decisions
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Q.8 Gap Analysis. Please comment. In your past experience; you found most IT Outsourcing companies of UAE
Expensive 1 2 3 4 5
Business Loss 1 2 3 4
Security Threats 1 2 3 4
Hidden Costs 1 2 3 4
Project Failures 1 2 3 4
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We expect the
The primary outsourcing It is always good
benefit of IT I think employees companies to to outsource to a
outsourcing is do feel a job In UAE IT Outsourcing pay penalty for group company
service threat when they outsourcing within UAE is any business or internal IT
Respondents improvement outsource will increase expensive loss division
Respondent 1 3 4 4 3 3 4
Respondent 2 3 4 4 3 3 4
Respondent 3 3 3 4 3 3 4
Respondent 4 3 4 5 4 4 4
Respondent 5 3 4 4 3 3 3
Respondent 6 3 4 5 4 4 4
Respondent 7 3 4 4 3 3 4
Respondent 8 3 4 4 3 3 3
Respondent 9 3 3 5 3 3 4
Respondent 10 3 4 4 3 3 4
Respondent 11 3 4 4 4 3 4
Respondent 12 3 4 5 3 3 4
Respondent 13 3 4 4 3 3 4
Respondent 14 3 4 4 3 3 3
Respondent 15 3 4 5 4 4 4
Respondent 16 3 4 4 3 3 4
Respondent 17 3 3 4 3 3 5
Respondent 18 3 4 4 3 3 4
Respondent 19 3 4 5 4 3 4
Respondent 20 3 4 4 3 3 5
Respondent 21 3 4 4 3 3 5
Respondent 22 3 4 4 3 4 4
Respondent 23 3 4 4 4 3 2
Respondent 24 3 4 5 4 4 4
Respondent 25 3 4 4 3 3 5
Business
benefits due to
IT outsourcing
Outsourcing sales has to always Good
cycle of UAE are translate into Biggest Reluctance Regional
consultative in financial is that Business Insufficient Outsourcing
Respondents nature benefits will get affected Budget company Job losses
Respondent 1 4 4 3 4 4 4
Respondent 2 4 3 3 4 4 4
Respondent 3 4 3 4 3 4 3
Respondent 4 4 2 3 4 4 4
Respondent 5 3 2 4 4 4 4
Respondent 6 4 2 3 4 4 4
Respondent 7 3 3 4 4 4 4
Respondent 8 4 3 3 4 4 4
Respondent 9 4 2 4 3 3 3
Respondent 10 4 3 3 4 4 4
Respondent 11 5 2 4 3 3 3
Respondent 12 4 3 3 4 4 4
Respondent 13 3 4 3 4 4
Respondent 14 4 4 4 4 4 4
Respondent 15 3 3 4 4 4 4
Respondent 16 4 3 4 4 4 4
Respondent 17 4 2 3 3 3 4
Respondent 18 4 3 3 4 4
Respondent 19 4 3 3 4 4
Respondent 20 5 4 4 3 4 4
Respondent 21 4 3 3 4 4 4
Respondent 22 4 3 3 4 4 4
Respondent 23 4 4 4 4 4 3
Respondent 24 4 3 3 4 4 4
Respondent 25 3 4 3 4 4 4
Respondent 14 3 1 3 4 2
Respondent 15 3 1 3 3 1
Respondent 16 2 1 3 4 2
Respondent 17 2 3 3 4 3
Respondent 18 2 1 3 4 2
Respondent 19 3 1 3 4 2
Respondent 20 2 1 2 4 3
Respondent 21 2 1 3 4 2
Respondent 22 2 1 2 4 2
Respondent 23 2 1 3 4 3
Respondent 24 2 1 3 4 2
Respondent 25 1 1 3 4 2
Respondents are not forced and cannot be forced to participate in the interviews.
Respondent’s identity and his individual feedbacks are classified information.
No references to any companies or technologies.
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www.spss.com