Welcome!

News Feed Item

arvato UK: UK Manufacturing Sector Spends 132% More on Business and IT Outsourcing in 2014

  • 66% of all outsourcing contracts in the manufacturing sector were first time agreements
  • In local government, the outsourcing market continues to mature as 75% of all agreements were renewals, extensions or supplier changes
  • Nearly 95% of the volume of deals in Q2 came from the private sector with telecoms & media, financial services and energy & utilities totalling 70% of Q2 spend (£513m)
  • Business Process Outsourcing (BPO) deals were most in demand (52%) with HR outsourcing remaining the most popular BPO service line, clocking up eight deals in Q2
  • Overall, the value of outsourcing deals in Q2 totalled £734m from 34 contracts

The UK manufacturing sector spent £130m on outsourcing services during the first half of 2014, representing a 132% year-on-year increase, according to the latest arvato UK Outsourcing Index.

The total volume of deals in the manufacturing sector was also up, rising by 50%, along with first time outsourcing which increased from 33% in the first half of 2013 to 66% between January and June of this year.

The data was compiled by business process outsourcing (BPO) provider arvato, in partnership with industry analyst, NelsonHall.

arvato says the increase in outsourcing activity is being driven by broader growth in the manufacturing sector. Figures from the British Chamber of Commerce released in July, based on a survey of almost 7,000 companies in the manufacturing and services sectors, found that 42% of manufacturers reported a rise in domestic sales in Q2 2014. This represents the highest reading since the survey began in 1989.

Commenting on the strength of the manufacturing sector, Debra Maxwell, Managing Director of arvato UK, said: “While not seen as a traditional market for business process and IT outsourcing, manufacturers under increasing growth pressure are turning to outsourcers to help support non-core functions, allowing them to focus on their expansion strategies and product innovation. The flexibility and efficiency savings outsourcing provides is the ideal tonic for their growing pains.”

Local government outsourcing continues to mature

The findings from the latest arvato Quarterly Outsourcing Index also served to highlight the maturity of the local government market. Three quarters (75%) of all contracts during the first six months of 2014 were extensions, renewals or the replacement of incumbents, up from 43% in the first half of 2013. During the same period, the average deal value in local government increased by 67% year-on-year.

“UK local government has been at the vanguard of public sector outsourcing globally for many years,” continued Debra, “and our findings show that outsourcing strategies are continuing to deliver value for local authorities with experienced clients using partnerships to do more with less against a backdrop of continuing austerity.”

Quarter on quarter performance of UK outsourcing

The private sector dominated the volume of outsourcing deals in Q2 2014 with a 95% share of the total number of agreements secured. Telecoms & media, financial services and energy & utilities were particularly active industries, which together accounted for 70% of total spend (£513m).

arvato's latest Quarterly Outsourcing Index once again found that BPO deals were most in demand, accounting for over half (52%) of all agreements. HR outsourcing - which includes services such as payroll, benefits administration and recruitment process outsourcing - was the dominant service line, as it was during the first three months of the year. Eight deals – 23% of total volume - worth £17m were agreed.

The outsourcing industry had a quieter second quarter than at the start of the year, with values falling by 67% to £134m, although the Index reports only a slight dip in the total number of deals, from 39 to 24. It also reported the number of first time agreements remains significant showing that the outsourcing industry continues to grow – rising from 59% to 62% of all contracts.

Debra concluded: “A number of large individual deals meant that our Index showed a bumper first quarter for the industry in terms of overall value, but the volume of new outsourcing activity has remained relatively constant. Encouragingly, the number of first time contracts remained significant, which shows the continued popularity of outsourcing as a strategic solution, particularly in the private sector. As UK economic growth continues to gather pace, we expect outsourcing to do the same.”

The arvato UK Quarterly Outsourcing Index was compiled by leading BPO and IT outsourcing research and analysis firm NelsonHall, in partnership with arvato. The research is based on an analysis of contracts completed in the first half of 2014.

For more information, please go to: www.arvato.co.uk/outsourcing-index

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
"MathFreeOn.com is a line coding platform for engineers and scientists. When they want to solve an engineering problem and they have to use software - they have to pay a lot of money for licenses - but with MathFreeOn you don't have to pay a lot of money. Just go to our site and write the code and you can check the result right away," explained Simon Lee, CMO of MathFreeOn, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Cla...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, provideed economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session also included a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.
"Dice has been around for the last 20 years. We have been helping tech professionals find new jobs and career opportunities," explained Manish Dixit, VP of Product and Engineering at Dice, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Infrastructure is widely available, but who’s managing inbound/outbound traffic? Data is created, stored, and managed online – who is protecting it and how? In his session at 19th Cloud Expo, Jaeson Yoo, SVP of Business Development at Penta Security Systems Inc., discussed how to keep any and all infrastructure clean, safe, and efficient by monitoring and filtering all malicious HTTP/HTTPS traffic at the OSI Layer 7. Stop attacks and web intruders before they can enter your network.
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Dave McCarthy, Director of Products at Bsquare Corporation; Alan Williamson, Principal...