The UK has overtaken the US as the leading national market for new outsourcing contracts for the first time, according to new research.
The UK represented over 37% of the market for major outsourcing contracts awarded worldwide for the first three months of 2005, followed by the US (25%) and Asia Pacific (4%), the quarterly analysis of the outsourcing market by outsourcing advisory firm TPI found.
Europe’s share of the total value of new outsourcing deals worth more than £27m more then doubled in the first three months of 2005, accounting for 70% of around £7.5bn worth of contracts awarded. In the same period last year Europe’s share of the outsourcing market was 34%.
“While some may argue that Europe’s €2.4bn mega deal – the Reuters/BT contract – skews the results for this first quarter, Europe still accounted for well over half of new contracts worldwide – a high point for European outsourcing,” said Duncan Aitchison, managing director, international with TPI.
The rise of offshore outsourcing deals continued during the first three months of this year. TPI said it saw a 17 percentage point increase in the proportion of outsourcing deals involving an element of offshore servicing compared to 2004.
Meanwhile, the so-called Big Six suppliers in the outsourcing market – Accenture, ACS, CSC, EDS, Hewlett Packard and IBM – saw their combined market share fall by 57% in the first quarter of 2005. They won only 27% of major contracts awarded in the first quarter of this year, compared with 63% in the first quarter of 2004. Non-Big Six firms have secured 64% of new deals against 45% a year ago.
Recent TPI research conducted among UK senior management responsible for offshore outsourcing decisions found that 60% see the large Indian outsourcing providers as offering a service to rival that of Western suppliers irrespective of the cost savings.
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