BPO contract values tumble

The value of business process outsourcing contracts has taken a tumble in the second quarter as a result of weak economic conditions

The business process outsourcing market took a tumble in the second quarter as economic conditions took their toll across Europe despite a record number of contracts being awarded.

The value of deals was down 16% in the last quarter across EMEA coming in at just €1.6bn according to the latest figures in the ISG Outsourcing Index, which tracks BPO deals worth €4m or more.

Although the value of deals was down there was plenty of activity with the number of contracts hitting a record high of 45 in the quarter, a 22% year-on-year increase.

"We have seen a notably tepid performance in the European outsourcing market in the second quarter,” said John Keppel, partner & president, ISG North Europe. “However, the silver lining is the record-breaking BPO activity. It was only the absence of larger awards that kept this segment from having an all-around strong showing.”

In the UK, which has been described as having a patchy recovery from recession, €1.3bn  billion in contract value was reached in the first half, which was down 25% on the same period a year earlier.

Keppel said that it had an insight into the pipeline, which was looking strong, and its expectations for the second half of the year were more optimistic.

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