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IT drives major outsourcing growth in EMEA region

Outsourcing in the Europe, Middle East & Africa (EMEA) region has hit record levels according to a new report from Information Services Group (ISG), and IT outsourcing is driving this growth.

Indeed, EMEA is such a major player in terms of outsourcing that more than half of the world's outsourcing value can be attributed to the region.

The Q2 2014 EMEA ISG Outsourcing Index measures commercial outsourcing taking into account large value contracts with an annual value of €4 million+ (£3.2 million), and it showed that the total value of those contracts in the first half of 2014 across EMEA was €5 billion (£3.95 billion), which was up a third on the same period in 2013. The number of contracts that were signed increased by a quarter.

As for the UK, ISG noted that it held a steady performance, and was up 6 per cent in terms of total contract value to €1.4 billion (£1.1 billion). The total number of major contracts actually dropped, though, from 92 to 83 year-on-year.

IT outsourcing saw its strongest ever Q2, with a total contract value of €2 billion (£1.6 billion) across the EMEA region.

David Howie, a partner at ISG, commented: "EMEA continues to maintain its leading position in the global outsourcing market. The region's increased contract volume and value in the first half was driven by a rise in demand from continental Europe, most notably France and Germany. Looking ahead, we're seeing a great deal of transaction activity in the market that should come to fruition in the second half of 2014. Taking the year as a whole we would expect ACV [Annual Contract Value] in the region to comfortably exceed 2013 levels."

Germany saw a doubling of contracts and a year-on-year increase of almost 40 per cent, and France hit €930 million (£735 million) total contract value to become the second largest EMEA outsourcing territory behind the UK.

The first quarter of 2014 was equally strong, though, so in terms of consecutive quarters the overall total contract value stayed flat.