Megadeals are out and multisourcing is in as Europe’s outsourcing spend rises

Spending on new outsourcing deals in Europe rose during the second quarter of 2011 in contrast to a global decline in outsourcing spend, research has found.

The total value of new IT and business process outsourcing (BPO) deals being signed by companies in Europe, the Middle East and Africa grew to Ђ7.6bn during the second quarter of 2011, an increase of 13 per cent year-on-year according to research by outsourcing advisory company TPI.

Demand for BPO increased in the region, with the total value of BPO contracts signed during the quarter rising 132 per cent year-on-year to almost Ђ6bn, while the total value of IT outsourcing deals fell.

Duncan Aitchison, EMEA president for TPI, said that year-on-year there has been a 23 per cent increase in the number of contracts signed in EMEA, which he said reflects a preference among companies for multisourcing arrangements over megadeals – deals with a value of more than Ђ800m.

However, globally the total value of outsourcing contracts signed during the quarter fell 18 per cent year-on-year to just over Ђ13bn.

TPI attributed the fall in the value to fewer megadeals being compared to the corresponding period in 2010.

Earlier this year, figures from Oxford Economics showed that demand for IT services has helped outsourcing become one of the highest grossing industries in the UK.


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