The total amount spent on outsourcing by businesses in the EMEA region in the second quarter of 2013 was 23% lower than in the same period the year before, according to the Information Services Group (ISG).
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The total €1.6bn spent was also 16% lower than the previous quarter. But business process outsourcing (BPO) increased 22% in the quarter compared to the same period in 2012, with 45 contracts and a total value of €700m.
ISG monitors all IT and business process outsourcing contracts worth over €4m.
In the first six months of 2013, UK organisations spent 25% less on outsourcing compared to the first six months of last year at €1.3bn. Meanwhile, Germany saw a 58% fall in the same timeframe with €500m in contract value.
ISG said it is optimistic for the second half of the year despite the report findings.
“We have seen a notably tepid performance in the European outsourcing market in the second quarter,” said John Keppel, president at 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.”
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“Although the second quarter results were soft, we have good insight into the service provider pipeline and it is strong, so we are optimistic for the industry for the second half of the year.”