European outsourcing deals on rise

The total value of new contracts over £27 million (NZ$68 million), is up 78% on 2006

Demand for outsourcing in Europe has increased dramatically in the first half of 2007 compared with the same period last year, according to the latest Quarterly Index from sourcing advisers TPI.

The total value of new — as opposed to renewed or restructured — contracts over £27 million (NZ$68 million), is up 78% on 2006.

This £8.3 billion of new business represents a significant recovery from the relatively soft outsourcing market experienced in Europe last year. European new deals account for over half — 54% — of all new outsourcing deals signed globally this year.

“Continental European countries have been relatively slow to adopt outsourcing, which makes it a market with huge growth potential,” says Duncan Aitchison, managing director of TPI.

“Five years ago the region accounted for only 12% of global outsourcing activity. Now continental Europe has nearly trebled its share to 30%.”

Europe’s buoyancy has been driven by a concentration of “mega deals” in the region. These deals represent 44% of new business to hit the European outsourcing market so far in 2007. Of the £5.2 billion in mega deals awarded this year, over two-thirds of that sum has come from Europe.

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