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Latest TPI Index data show government outsourcing in Britain rose 16 percent in 2012
Information Services Group (ISG) (NASDAQ:III), a leading technology insights, market intelligence and advisory services company, today released ISG Research showing that the U.K. Public Sector is now the world’s largest outsourcing market outside of the United States.
According to data from the latest EMEA TPI Index, which covers commercial outsourcing contracts with an annual contract value (ACV) of €4 million or more, Public Sector ACV in Britain increased 16 percent in 2012 as the government embraced outsourcing as part of its focus on improving value and streamlining costs. The Public Sector accounted for 55 percent of total U.K. ACV, establishing itself as the world’s largest outsourcing market outside of the United States.
Government entities in Great Britain awarded 148 contracts in 2012. That number has increased 47 percent since 2010 while ACV has declined 12 percent, indicating a significant long-term rise in the use of multi-sourcing in the Public Sector.
“The Public Sector has recognized that best-of-breed providers offer specialist knowledge that can derive real value from outsourced services, value that wasn’t possible with the single-provider mega-deals of the past,” said Luke Mansell, Director, ISG. “As a result of this trend toward multi-sourcing, Service Integration and Management (SIAM) is on the rise to ensure contracts deliver value and services are delivered seamlessly.”
According to TPI Index data, the U.K. accounted for 80 percent of all Public Sector contracting activity in Europe, the Middle East & Africa (EMEA) in 2012, a market share that has remained remarkably consistent over time.
“Despite intense downward pressures on public expenditure in most European countries, it appears that so far only the U.K. is using outsourcing as a key response to austerity measures,” Mansell said. With these programs continuing to be implemented across EMEA, the evaluation of innovative sourcing methods to achieve cost optimization and reduce waste is likely to increase. “We’re seeing real innovation in the Public Sector, and this vitality makes the public sector an exciting space to be involved in.”