Thursday 24th July, 2014

According to the latest market data from Information Services Group, activity in the global outsourcing industry for Q2 reached its highest level ever, producing record contract values for the period.

The ISG Outsourcing Index, measures commercial outsourcing contracts with Annual Contract Value (ACV) of $5 million or more, showed a record 340 contracts were signed in Q2, with the greatest growth coming from deals valued at under $40 million annually.

"We are seeing broad-based strength across the entire global outsourcing market, with growth almost everywhere we look," said ISG President and Partner John Keppel.

He added; "Deal counts are strong across the board, global ACV is surging, all three regions Americas, Europe, and Asia Pacific are seeing upward momentum, IT outsourcing continues to forge ahead, and, in a potential bright spot for the global economy, the manufacturing sector is seeing a significant rebound in deal activity and value."

The growth in smaller-sized deals remains the primary driver of the market, as enterprises continue to award lower-value contracts of shorter duration to more providers.

Business process outsourcing, meanwhile, turned in a slightly improved quarter but its first-half performance was down 4 percent, after solid growth over the last five years.

Traditional back-office functions, like human resources, contact centers, procurement, and finance and accounting haven't fared as well as industry-specific BPO, which has become one of the largest and fastest-growing markets.

By region, France turned in its best first half ever, while Southern Europe and the Nordics also had standout performances, the UK and Ireland improved only slightly from last year's first half. Manufacturing, financial services, and telecommunications were all up noticeably.