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Europe leads US on new outsourcing deals

Europe has overtaken the US as the world’s leading market for new outsourcing contracts.

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Outsourcing

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.

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