Outsourcing spend among UK businesses rises sharply in Q1 as companies focus on digital transformation, according to the Arvato Outsourcing Index
The research found that services outsourced in the UK are being increasingly delivered onshore. No deals agreed in Q1 are to be delivered fully overseas, compared with six per cent in Q1 2016 and eight per cent in the period October to December last year.
According to the research partners, a decrease in government spend was partly responsible for the drop in contract volume from 49 agreed in Q1 2016 to 22 in the same period this year, as public sector organisations adopt a ‘wait and see’ approach in the wake of Brexit and the upcoming General Election. Government departments spent £304 million on outsourcing in Q1, compared to £1.6 billion in January to March 2016.
Telecoms Investment Rise Driven By Customer Services
The telecoms sector accounted for 18 per cent of all UK outsourcing deals agreed between January and March, according to the findings.
The value of contracts signed by businesses across the industry more than doubled year-on-year, with agreements worth £514 million procured in Q1 compared to £217 million in the same period in 2016.
The research reveals significant investment in improving customer experience is behind the rise. Companies in the sector agreed deals for customer service worth £274 million in the first three months of the year, up from the £126 million spent in Q1 2016.
Debra Maxwell added: “The telecoms sector is an intensely competitive marketplace and exceptional customer service is now a key differentiator. Providing a seamless customer journey across digital and traditional channels is key, and a growing number of operators are partnering with third party experts to deliver outstanding experiences.”
The Arvato UK Outsourcing Index is compiled by leading BPO and IT outsourcing research and analysis firm Nelson Hall, in partnership with Arvato UK. The research is based on an analysis of all outsourcing contracts procured in the UK market during Q1 2017.