Research by the Information Services Group showed that the UK Public Sector has become the largest outsourcing market in the world other than Unites States. ISG, leading market intelligence, advisory services and technology insights company, released this data on March 19th based on the EMEA TPI Index.
EMEA TPI Index covers all the commercial outsourcing contracts which have an ACV (annual contract value) of over €4 million. According to EMEA TPI Index data, the ACV of Britain’s Public Sector rose by 16 percent during 2012 as the government looked towards outsourcing as a way to streamline costs and improve value.
The TPI Index is a measurement done by ISG which portrays the quarterly overview of the outsourcing industry to service providers, analysts, clients and the media. This index has served as the authoritative source of the industry to garner marketplace intelligence in relation to industry adoption, outsourcing transaction terms and structures, service provider metrics and geographic prevalence.
148 contracts from British government entities
As per the research, UK Public Sector contributes around 55 percent of the total ACV of UK which has made it the largest outsourcing market in the world other than U.S. 148 contracts have been awarded by British government entities in the last year. This has seen a 47 percent rise from the year 2010.
However, ACV saw a decline of 12 percent as an indication of the long-term increase in the leveraging of multi-sourcing in Britain’s public sector.
According to the director of ISG, Luke Mansell, The UK Public Sector has realized the advantage that best-of-breed providers give through their specialist knowledge that can help garner real value from the services that are outsourced.
This was not a possibility when entering into big deals with single providers.
This trend of multi-sourcing has increased SIAM (Service Integration and Management) which will guarantee the seamless delivery of services and garnering of value from contracts.
Innovation in Public Sector
The TPI Index further reveals that U.K contributes to 80 percent of the contracting activity in Public sector of EMEA Europe, Middle East and Africa) in 2012. This outsourcing market share has been remaining consistent over time.
Mansell said that most of the European countries have been facing significant pressure in terms of public expenditure. However, only U.K. seems to have been leveraging outsourcing responding to the austerity measures.
Public Sector has been witnessing immense innovation which makes the sector an interesting place to be indulging in.
The austerity measures are being implemented all over EMEA and it is most likely that innovative sourcing methods will gain more emphasis so as to reduce waste and achieve cost optimization.