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UK IT and business process outsourcing plummeted in 2015, show ISG figures

The amount of money UK organisations spent on IT and business process outsourcing fell sharply in 2015, compared to the previous year

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Outsourcing

The amount of money spent in 2015 on IT and business process outsourcing contracts in the UK dropped 19% compared with 2014, as the Emea region as a whole records an 8% slump.

In contrast, the German speaking group of nations known as the Dach region recorded a substantial 69% increase in the amount spend during the same period, even though the number of contracts signed was the lowest since 2007. The rise in spend was largely due to Siemens’ large renewal with Atos, said ISG.

Meanwhile, France's total spend fell 70% in 2015 after a strong 2014.

The study of all global contracts worth over $5m revealed that organisations in the Emea region – which is dominated by Europe – spent $11.7bn on 601 outsourcing contracts.

ISG said the decline in money spent was the result of an overall fall in IT outsourcing. “The number of large infrastructure awards dropped sharply and value was lower on smaller deals overall. BPO, meanwhile, grew by double digits, both in value and volume, led by industry-specific work in contact centres,” said ISG.

The amount spent globally dropped 8% to $23.7bn. But there was a record number of contracts, with 1445 signed in 2015.

John Keppel, partner and president of ISG, said more enterprises were outsourcing than ever before, and paying less. "They’re buying flexibility with cost variability, utilising smaller deals more than ever as they revamp their processes around cloud, digitalisation and automation,” said Keppel.

There were 23 very large deals, worth $100m or more, signed in 2015 – marking the lowest annual number of "megadeals" in a decade.

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