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October-December 2020

Huge declines in traditional outsourcing as Covid-19 puts a stop on deals

The global IT outsourcing and business process outsourcing sector reduced in value by 5% after traditional outsourcing contracts signed saw a double-digit decline. According to research by ISG, the total value of contracts signed globally during the quarter was $13.2bn (£10.5bn), a drop of 5% from the same period in 2019. Traditional outsourcing, in which an organisation hires an outside service provider, was hit hardest, with total spending on these services down 16%. While cloud-based as-a-service contracts increased by 7% during the quarter, this was the lowest rise for a quarter in the past five years, said ISG. ISG monitors IT and business process services contracts in Europe, the Middle East and Africa (EMEA) that are worth more than £4.2bn. During the previous quarter, contact value was also down after being hit by the early disruption caused to businesses by the Covid-19 pandemic, with the sudden decline largely caused by spending cuts in industries such as travel, transportation, hospitality, retail and financial ...

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