UK Quarterly Outsourcing Index

Welcome to Arvato’s UK Quarterly Outsourcing Index – a market research initiative designed to analyse and document outsourcing activity in the UK.

We believe that our research will help shine a light on the contribution outsourcing makes to the UK economy – from the millions of jobs it sustains to the technical innovations it helps launch and the cost savings it delivers for a large number of organisations, public and private.

The Arvato UK Quarterly Outsourcing Index is compiled in partnership with leading BPO and IT outsourcing research and analysis firm Nelson Hall. The research is based on an analysis of outsourcing contracts completed each quarter.

2018 full year review

Government outsourcing spend reaches highest level since 2015

Other key findings from the 2018 full year review include:

  • The total value of government deals increased by 61 per cent year-on-year in 2018, climbing from £1.8 billion in the previous year.
  • Investment in IT and technology accounted for 68 per cent of the total public sector spend, with deals worth £2 billion. 
  • Overall, 148 contracts were procured across the public and private sectors in 2018 – the highest volume for two years – with a total value of £5.8 billion.
  • Customer services dominated the business process outsourcing (BPO) market, accounting for 43 per cent of all deals signed.
  • The value of contracts signed by retailers more than trebled over the period, reaching £339 million last year. 
Q3 2018

Government outsourcing records strongest quarter since 2016 as UK market rebounds

Other key findings from Q3 2018 include:

  • IT outsourcing (ITO) contracts accounted for 90 per cent of total public sector deal value (£1.27 billion) over the period
  • Central departments dominated the spending, signing ITO deals worth £1.26 billion between July and September
  • The overall value of outsourcing deals signed in the UK market reached £2.93 billion in Q3 2018, an 18-month high
  • Business process outsourcing (BPO) spending in the private sector more than quadrupled year-on-year in Q3, reaching £1.33 billion
Q2 2018

Government outsourcing bounces back despite overall UK market softening

Other key findings from Q2 2018 include:

  • Outsourcing contracts worth £2.61 billion were signed in the UK
    between January and June
  • IT Outsourcing (ITO) deals accounted for more than three quarters
    (79 per cent) of government spend from January to June
  • Central departments were the key drivers of public sector activity over the period, signing agreements worth £921 million 
  • Financial services was the highest spending UK sector on outsourcing, agreeing deals worth £1.66 billion over the period
Q1 2018

UK outsourcing market dominated by financial services and retail business in Q1

Other key findings from Q1 2018 include:

  • Financial services firms accounted for 51 per cent (£363 million) of the total contract value procured in the UK in Q1
  • Retail companies signed contracts worth £140 million in the first quarter of this year
  • Customer services was the most popular BPO service line procured between January and March, accounting for £152 million (20 per cent of total contract value)
  • Market activity in Q1 represents a slowdown from what was a record year for the outsourcing sector in 2017