Mega-deals drive UK outsourcing surge

Market leapt 11 per cent in 2014

A flurry of mega-deals drove a double-digit hike in the UK outsourcing market in 2014, with the wider EMEA market experiencing its best year since 2011, new figures claim.

The total annual contract value (ACV) of UK deals tracked by market watcher ISG vaulted by 11 per cent last year to €3.4bn (£2.5bn) as nine "mega-relationships" – each worth more than €80m a year – were inked.

Across EMEA as a whole, the outsourcing market enjoyed its joint second-best year of the last decade – and the best since 2011 – as ACV leapt by seven per cent to €9.5bn, said ISG, which only tracks commercial deals worth €4m or more.

"A strong 2014 helped the EMEA market retain its position at the largest outsourcing region globally," said ISG president John Keppel.

"The ACV of new scope and restructured contracts each delivered small gains, aided by the award of 20 mega-relationships across the region. It is encouraging to see more sustained outsourcing activity across the region rather than simply in the more mature markets."

IT outsourcing was the golden-haired child, with ACV growing 13 per cent on the back of 452 signed contracts. IBM's infrastructure deals with ABN Amro and Lufthansa were among the largest.

In contrast, the ACV of business process outsourcing deals fell for a second year running, by 12 per cent.