TPI reports that the US won only 25% of major outsourcing
deals (those worth over €40 million), with Asia Pacific at 4%. But
the firm notes that the UK's position is largely the result of a
massive outsourcing deal between Reuters and BT, and it is unlikely
that its lead will be sustainable in the long term.
Without the Reuters/BT deal the UK would have been the second
largest national market with 16% of new contracts worldwide, says
TPI.
However, Europe does dominate the global outsourcing market.
Its share of the total value of new outsourcing deals more than
doubled in the first three months of this year, accounting for 70%
of the contracts awarded, compared with a share of just 34% in the
same period last year.
According to Duncan Aitchison, TPI's Managing Director,
International:
"While some may argue that Europe's €2.4 billion mega deal –
the Reuters/BT contract – skews the results for this first quarter,
Europe still accounted for well over half (57%) of new contracts
worldwide – a high point for European outsourcing."
Human Resource Outsourcing (HRO) has also grown in the first
quarter, with the total value of HRO contracts more than trebling
to €1.37 billion, compared with only €0.44 billion in the first
quarter of 2004. Almost two-fifths (38%) of business process
outsourcing contracts signed so far in 2005 have been HRO, says
TPI.
TPI's research found that the majority of the €11 billion of
major contracts awarded so far this year did not go to the "Big
Six" of outsourcing – Accenture, ACS, CSC, EDS, HP and IBM – which
won only 27% of the contracts.
"So far in 2005 a number of smaller companies have
successfully challenged the Big Six, continuing the trend we saw in
2004," said Aitchison. "The growing number of service providers
successfully contending for deals could indicate further
competition for the Big Six and an increasing choice of suppliers
for clients this year."
Recent TPI research conducted among UK senior management
responsible for offshoring decisions reveals that 60% see the large
Indian outsourcing providers as offering a service to rival that of
Western suppliers irrespective of the cost savings. TPI believes
growing confidence in Indian providers could have a further impact
on the Big Six.
Duncan Aitchison commented:
"To date, offshore outsourcing has been good news for the Big
Six. Their established presence in India has enabled them to offer
clients the benefits of offshore cost savings with the
'reassurance' of working with an established provider. But, as
confidence in Indian providers grows, this advantage could
diminish."
Elsewhere, confidence in Indian outsourcing providers was
dented by the news that three former employees of Indian
outsourcing firm Mphasis had been arrested for allegedly stealing
£170,000 from US customer accounts with Citibank.
According to reports the three used their call centre
positions to trick customers into giving them their pin
numbers.
Nasscom, India's National Association of Software and Service
Companies, acted swiftly to reassure clients and account holders,
announcing plans to create a national database for the registration
of call centre staff holding security clearance.
