Europe has overtaken the US as the world’s leading
market for new outsourcing contracts.
Outsourcing advisory firm TPI said that in 2004 Europe
represented 49% of the value of major outsourcing contracts (those
worth over £28m) awarded worldwide, with the US worth 44%. Asia
Pacific was worth 7%.
The £19bn-worth of contracts awarded by European organisations
last year is more than double the value in 2002.
Duncan Aitchison, TPI international managing director, said,
"The equalisation between the European and US outsourcing markets
comes through dramatic growth in Europe, not any significant
decline in outsourcing in the Americas.
"European companies realise that they cannot continue to compete
effectively on a global scale without using the increased
efficiency and flexibility they can gain through outsourcing."
TPI said the value of major outsourcing contracts awarded last
year was a record high of £40bn worldwide.
TPI said 67% of this was for information technology outsourcing
(ITO), and 33% was business process outsourcing (BPO), whereby
companies engage third parties to perform functions such as finance
and accounting, procurement, customer relationship management and
human resources processing.
BPO expanded by half as a proportion of major contracts last
year from 22% in 2003.