Outsourcing market slows down, private sector still dominating

Telecoms and financial firms lead the charge as customer services become the top priority.

There has been an overall slowdown in the UK’s outsourcing market this year, but the private sector is still dominating. This is according to the latest Arvato UK Outsourcing Index.  

The report says businesses spent £3.18 billion on business process outsourcing (BPO) in the first three quarters of 2016 (from January to September), doubling on the amount agreed a year before.  Telecoms and financial services companies were at the forefront of this increase, whose spend increased more than four times, to a total of almost £1.8 billion. Telecoms spent £1.08 billion, and financial services firms spent £697 million, representing an increase of 32 per cent, compared to last year.  

Businesses spend mostly (30 per cent) on customer services, amounting to a total of £1.01 billion. With a total of 18 contracts signed in the period, this represents an 80 per cent jump year-on-year. 

“After strong year-on-year growth across the UK market in the first half of the year, we have seen an unsurprising slowdown in the public sector,” said Debra Maxwell, CEO of Arvato CRM Solutions, UK & Ireland.  

“It’s clear the uncertainty arising from June’s EU referendum and the change of government has put the brakes on decision making, with government departments and local authorities adopting a wait-and-see approach until firm commitments have been made on policies and funding.” 

“Despite the overall slowdown, the private sector market remains buoyant with customer services a clear priority as businesses look to ensure they deliver memorable experiences for their customers across a broad range of channels.”

Image source: Shutterstock/MaximP