Wednesday 4th February, 2015

According to Information Services Group (ISG) quarterly index, the Europe, Middle East & Africa (EMEA) outsourcing market grew by 7 percent in Q4 2014, due to growth in France and large contact values.

The EMEA outsourcing Index, which measures commercial outsourcing contracts with an annual contract value (ACV) of €4 million or more, found that a robust final quarter contributed to the region’s best year since 2011.

ACV reached €9.5 billion for the year, up from €8.9 billion in 2013, although contract counts remained static (588 in 2014 vs. 595 in 2013).

EMEA’s growth was underpinned by activity in France, where year-on-year growth reached 125 percent. In addition, the number of mega relationships, contracts with an annual contract value of €80 million or more, grew by 25 percent.

At a regional level, the United Kingdom saw double digit (11 percent) growth as ACV grew from €3 billion to €3.4 billion, despite an 11 percent fall in contract count. The award of larger contracts and the nine mega-relationship signed drove the market growth.

By industry, Manufacturing and Energy both saw ACV increases of nearly 30 percent for the year while Transportation increased by 13 percent.

John Keppel, partner and president, ISG, said,

"Looking ahead, we expect healthy numbers in 2015, though growth during the first half of the year will look flat at best. The first two quarters of 2014 were particularly strong and so the first half of 2015 may look tepid by comparison."

ACV for IT Outsourcing rose 13 percent in 2014 and the 452 ITO contracts signed in EMEA for the year was the highest ever recorded in the region. Infrastructure deals drove the market, fuelled by some particularly large deals, including IBM’s deals with ABN Amro and Lufthansa.

In contrast, BPO ACV continued to shrink, falling for the second year, this time by 12 percent.