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Outsourcing smashes records in Europe

Outsourcing activity in the Europe, Middle East and Africa (EMEA) region has hit a record high in the first half of the year, according to new research.

Technology insights company Information Services Group (ISG) conducts an annual EMEA ISG Outsourcing Index that measures commercial outsourcing contracts with an annual contract value (ACV) of €4m (£3.2m) or more.

This year’s report claims that the volume of contracts awards is at the highest it has ever been, with ACV across EMEA totalling €5bn (£4bn) – a 32 per cent increase year-on-year.

It also notes that the number of contracts signed was up 25 per cent during the first half of 2014.

According to ISG, this means that EMEA "continues to dominate" the global outsourcing market.

“EMEA continues to maintain its leading position in the global outsourcing market,” claimed David Howie, a partner at the organisation.

“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.

Read more: UK public sector outsourcing hits new high of £50b, now worth almost double the commercial sector

“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. Raking the year as a whole we would expect ACV in the region to comfortably exceed 2013 levels,” he added.

The UK is also claimed to have maintained “steady performance” – its ACV was €1.4bn (£1.1bn), an increase of 6 per cent compared with the first half of 2013, even though contract counts dropped from 92 to 83.

For this quarter, EMEA ACV “remained flat” when compared with the first quarter of 2014, although it did finish 50 per cent ahead year-on-year.

The report claims the region mainly benefitted from IT outsourcing (ITO) performance, which experienced its strong ever quarter this year.

“Overall, we’ve seen a good performance across EMEA this quarter – and not just because last year’s weak second quarter makes this year’s results shine,” claimed Howie.

“The market is moving in the right direction and the first-half year-on-year comparison is testament to the market’s strengths.

“Solid performances in volume and value across most industry sectors give us confidence that this is not simply a blip,” he added.