IT and business process outsourcing surges after general election

Business confidence following the general election is explained as the main reason for a massive hike in spending on IT and business process outsourcing by UK organisations

The amount of money UK organisations spent on IT and business process outsourcing (BPO) trebled in the period after the 2015 general election, compared with the three months before, with public sector organisations driving the rapid growth.

According to research from Nelson Hall, commissioned by BPO supplier Arvato, £2.21bn worth of deals were agreed from July to September 2015 – three times higher than the amount spent in the previous three months. The amount spent in the third quarter of 2015 was also 69% higher than the same period a year before.

BPO represented almost 46% of deals, with £406m spent in total, while IT outsourcing made up 50% of the contracts, amounting to £1.77bn. The remaining 4% was a combination of BPO and IT outsourcing.

The research revealed that of the £2.21bn spent in the quarter, a massive proportion (£2bn) came from the public sector. This was the most spent by the public sector since the beginning of 2012. The telecoms sector accounted for the biggest spend in the private sector.

According the earlier research from Nelson Hall, a total of £6.65bn was spent on IT and business process outsourcing in the UK in 2014.

“Political certainty following the general election has clearly had a positive impact on the outsourcing industry. With market confidence returning, organisations across the private and public sectors are continuing to turn to outsourcing partners for the expertise and technology to help them achieve their objectives,” said Arvato Financial Solutions UK CEO Bryan Mouat.

Local government spending was up by 67% in the period and this could continue with even greater cuts to funding expected in the coming spending review, according to Arvato public sector CEO Debra Maxwell.

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