The total value of public sector deals rose 39 per cent year-on-year in the first half of 2018, according to the Arvato UK Outsourcing Index.
Debra Maxwell, CEO, CRM Solutions, Arvato UK & Ireland, said: “The public sector market is showing signs of recovery as government organisations take the brakes off the tendering process. More than two thirds (68 per cent) of contracts signed across the sector this year represent new relationships, showing outsourcing remains a key strategy for delivering new technologies, such as cyber security and automation, to drive efficiency and service improvements.
“A subdued private sector comes as no surprise given the lingering uncertainty surrounding the Brexit process and GDPR implementation, which is causing many businesses to pause and review their contingency plans and margins.”
Financial Services Firms Largest Spenders In Outsourcing Market
Businesses across financial services spent more on outsourcing contracts in the first half of 2018 than any other UK sector, with firms agreeing deals worth £933 million.
Despite the overall fall in private sector spending, financial services firms were responsible for the majority of outsourcing procurement in the UK market, representing 64 per cent of total deal value between January and June.
The findings show the total value of business process outsourcing (BPO) contracts signed across all sectors was up 66 per cent year-on-year to £1.48 billion, as organisations partnered with third parties to deliver customer services, HR and payment processing.
Customer services was the most frequently procured BPO service line, with eight deals worth £203 million signed over the period. Three quarters of these contracts involved integrating traditional and digital channels, with half incorporating web chat support.
The Arvato UK Outsourcing Index is compiled by leading BPO and IT outsourcing research and analysis firm NelsonHall, in partnership with Arvato UK. The research is based on an analysis of outsourcing contracts procured in the UK market between January and June 2018.