IT driving growth of UK outsourcing services

IT driving growth of UK outsourcing services

IT was responsible for around 29 per cent of all outsourcing contracts in the UK, new figures have shown.

According to the UK Quarterly Outsourcing Index, the total number of IT contracts secured in the first quarter of the year were worth a total of £789 million.

The remaining 71 per cent of outsourcing contracts reached a total value of £1.3 billion.

The UK Quarterly Outsourcing Index was completed by leading BPO and IT outsourcing research and analysis firm NelsonHall, in partnership with arvato.

It found that there was an overall rise of 168 per cent in the value of deals made in the public sector, which accounted for 74 per cent of the total number.

All in all, there was around £2.1 billion worth of new outsourcing contracts in the UK, representing a 65 per cent year-on-year increase.

In 59 per cent of deals, the services in question were being outsourced for the first time, representing new work for businesses in the sector.

That comes on the back of fewer contract renewals and transfers between vendors.

Debra Maxwell, managing director of arvato, said: “The outsourcing industry is in good health at the start of 2014.

"A rise in total spend coupled with a high proportion of first-time outsourcing partnerships proves there is a clear business case for outsourcing, and smart organisations continue to use it as a means to achieve their objectives."

She added that the strong figures also suggested that outsourcing was playing an important role in how public sector organisations reduced their costs while keeping front-line services protected.

The trend was equally popular in the private sector, with financial services organisations showing the greatest willingness to spend on outsourcing, accounting for £92 million worth of costs during the first quarter of the year, more than any other sector.