Friday 1st November, 2013

According to Information Services Group (ISG) Outsourcing Index, the third quarter of 2013 results show strong growth in outsourcing contract values in the Europe, Middle East & Africa (EMEA) region.

The Outsourcing Index, that measures commercial outsourcing contracts with an Annual Contract Value (ACV) of €4 million or more, showed that 176 contracts with a combined value of €2.8 billion were awarded in the region during the third quarter.

The number of contract awards – the highest ever recorded in a single quarter in EMEA – marked a 60 percent increase both quarter-on-quarter and year-on-year.

This strong growth was largely driven by a significant number of mega relationships – outsourcing contracts with an ACV of over €80 million – awarded in the region over the past quarter.

"EMEA achieved the highest third-quarter results on record, a strong rebound from the weakness observed in the first half of the year," said John Keppel, Partner & President, ISG North Europe.

The IT Outsourcing (ITO) market, in particular, surged in EMEA during the third quarter. In contrast to the robust ITO figures, the Business Process Outsourcing (BPO) market saw a dip in ACV in the third quarter, with the €500 million awarded. In spite of this dip in ACV, contracting activity rose, with 51 BPO contract awards awarded.

The UK showed strong third-quarter results, recording €680 million in ACV, up 35 percent over the prior quarter. However, Germany led the region’s growth, posting €810 million in ACV and surpassing the UK for the first time.

By industry, ACV within the Financial Services sector quadrupled over the quarter, recording its largest-ever third-quarter result, while Travel, Transport & Leisure rose 88 percent year-to-date. Telecom and Manufacturing, however, struggled against the healthy contract values recorded last year.