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 £734m, although the Index reports only a slight dip in the total number of deals, from 39 to 34. 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
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captu...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining senso...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, will discuss the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docke...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...