The UK has overtaken the US as the leading national
market for new outsourcing contracts for the first time, according
to new research.
The UK represented over 37% of the market for major outsourcing
contracts awarded worldwide for the first three months of 2005,
followed by the US (25%) and Asia Pacific (4%), the quarterly
analysis of the outsourcing market by outsourcing advisory firm TPI
found.
Europe’s share of the total value of new outsourcing deals worth
more than £27m more then doubled in the first three months of 2005,
accounting for 70% of around £7.5bn worth of contracts awarded. In
the same period last year Europe’s share of the outsourcing market
was 34%.
“While some may argue that Europe’s €2.4bn mega deal – the
Reuters/BT contract – skews the results for this first quarter,
Europe still accounted for well over half of new contracts
worldwide – a high point for European outsourcing,” said Duncan
Aitchison, managing director, international with TPI.
The rise of offshore outsourcing deals continued during the
first three months of this year. TPI said it saw a 17 percentage
point increase in the proportion of outsourcing deals involving an
element of offshore servicing compared to 2004.
Meanwhile, the so-called Big Six suppliers in the outsourcing
market – Accenture, ACS, CSC, EDS, Hewlett Packard and IBM – saw
their combined market share fall by 57% in the first quarter of
2005. They won only 27% of major contracts awarded in the first
quarter of this year, compared with 63% in the first quarter of
2004. Non-Big Six firms have secured 64% of new deals against 45% a
year ago.
Recent TPI research conducted among UK senior management
responsible for offshore outsourcing decisions found that 60% see
the large Indian outsourcing providers as offering a service to
rival that of Western suppliers irrespective of the cost
savings.