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 £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
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
Though cloud is the future of enterprise computing, a smooth transition of legacy applications and systems is critical for seamless business operations. IT professionals are eager to start leveraging the cost, scale and other benefits of cloud, but with massive investments already in place in existing infrastructure and a number of compliance and resource hurdles, it can be challenging to move to a cloud-based infrastructure.
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, will discuss how given the magnitude of today's applicati...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-security...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant th...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, will go over the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, applicatio...
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
Microsoft Azure Container Services can be used for container deployment in a variety of ways including support for Orchestrators like Kubernetes, Docker Swarm and Mesos. However, the abstraction for app development that support application self-healing, scaling and so on may not be at the right level. Helm and Draft makes this a lot easier. In this primarily demo-driven session at @DevOpsSummit at 21st Cloud Expo, Raghavan "Rags" Srinivas, a Cloud Solutions Architect/Evangelist at Microsoft, wi...
Containers are rapidly finding their way into enterprise data centers, but change is difficult. How do enterprises transform their architecture with technologies like containers without losing the reliable components of their current solutions? In his session at @DevOpsSummit at 21st Cloud Expo, Tony Campbell, Director, Educational Services at CoreOS, will explore the challenges organizations are facing today as they move to containers and go over how Kubernetes applications can deploy with lega...