Outsourcing growing strongly despite poor economic conditions

It is always said that IT outsourcing does well in both depressed as well as-vibrant economic conditions. Outsourcing service providers have been as bullish as ever despite customers cutting IT budgets.

This is because outsourcing is a way of cutting fixed costs and freeing up money to invest more strategically, or perhaps just keep the savings for a rainy day. Or pay it as a bonus to a senior executive if you are a bank, probably the one that decided to outsource.

The reason I am compelled to write about this post is the latest TPI index, which monitors BPO/IT outsourcing contracts worth over €20m. The research found 2011 to have the highest total value of contracts ever in Europe – or the Europe Middle East and Africa as the region is uncomfortable known. This was €44bn.
 
This was heavily influence by mega-deals, which accounted for 60% of the total value. These mega-deals are those worth over €800m. But there were also 15% more contracts in total in the final quarter of 2011 compared to the same period a year ago. So outsourcing is on the up whereas economic confidence is heading in the opposite direction.

The graph below shows the total value of IT/BPO contracts in Europe (EMEA) over the last 10 years.

Outsourcing TVC.jpg
Click here to see the TPI index.

Enhanced by Zemanta

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close