| | Sourcing data and
advisory firm TPI has
released its
second-quarter and
first-half market data
for Europe, the Middle
East and Africa (EMEA),
showing that outsourcing
activity continues to be
constrained by difficult
economic conditions,
despite its potential to
soften the impact of the
recession through cost
savings and efficiency
gains.
The TPI EMEA Index,
which measures
commercial outsourcing
contracts valued at €20m
or more, found that the | |
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| | total number of contract
awards in EMEA declined
slightly from the first
quarter to the second
quarter. In addition,
total contract value
(TCV) of just over €7bn
and annualised contract
value (ACV) – TCV
divided by the duration
of the contracts – of
€1.2bn represented
declines of about 6%
from first quarter
results.
The sluggishness of
the market amplified the
contrast between the
first halves of 2008 and
2009. Compared with the
first six months of last | |
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| | year, which saw record
levels of sourcing
activity in EMEA, the
region awarded 19% fewer
contracts, with 45%
lower TCV and 60% lower
ACV so far in 2009.
Driving the declines
were a reduction in
larger deals and
drastically reduced
spending on business
process outsourcing
(BPO), alongside a
marked reduction in
outsourcing activity in
some traditionally
strong sectors that have
been hard-hit by the
recession.
Despite this, EMEA | |
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| | once again turned in the
strongest performance of
all the regions during
the first half, with TCV
considerably ahead of
the Americas and Asia
Pacific. Following the
surge in the number and
value of contracts
witnessed in the first
half of 2008, the region
has returned to levels
consistent with previous
years, and several
verticals in EMEA,
including diversified
financials, consumer
durables, utilities and
telecoms, increased
their adoption of
outsourcing.
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“Today’s level of
activity in the EMEA
outsourcing marketplace
looks a lot like it did
in 2007,” said Duncan
Aitchison, partner and
president, EMEA at TPI.
“The exceptionally
strong first half of
2008 appears to have
been an anomaly, and we
are now seeing a slower
yet reasonably
consistent pace of
contract awards that
provides some evidence
of stability in the
buying and selling
flow.” | |
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