Europe is king of outsourcing

Europe has overtaken the US as the world’s leading market for new outsourcing contracts, according to the latest Quarterly Index from international sourcing advisory firm TPI.

TPI’s research reveals that, in 2004, Europe represented 49 per cent of the value of major outsourcing contracts (those worth more than £28m) awarded worldwide, with the US standing at 44 per cent and Asia Pacific at 7 per cent. The £19.6bn of contracts awarded by European companies last year was more than double the value in 2002.

Duncan Aitchison, international managing director at TPI, said: “The equalisation between the European and US outsourcing markets comes through dramatic growth in Europe, not any significant decline in outsourcing in the Americas. European companies realise that they cannot continue to compete effectively on a global scale without using the increased efficiency and flexibility they can gain through outsourcing.”

TPI’s research reveals that the value of major global outsourcing contracts awarded last year reached a record high of £40.7bn.

– IT outsourcing accounted for 70 per cent of this, while business process outsourcing – where companies engage third parties to perform functions such as finance and accounting, procurement, customer relationship management and HR processing – accounted for the rest.

“Judging by the pipeline of deals on which TPI is advising, European outsourcing is likely to increase yet again this year,” said Aitchison.

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