Market Analysis

Top 100 outsourcing contracts of 2018

Transition phase

Although the outsourcing model is going through a period of transformation, it is still an important part of the IT and business services market, but the cost saving and efficiency rhetoric has given way somewhat as companies transition to more digital modes of operation. Large outsourcing deals remain as organizations seek rapid transformation. Outsourcing continues to be a contracting option for organizations seeking transformation on a large scale.

 

Annexation of IT by digital in the biggest markets

It has become increasingly difficult to distinguish between digital and non-digital deals, with digital almost becoming interchangeable with IT and technology in many situations. The United States and the UK remain the biggest consumers of outsourcing services. Of the US deals in this list, 51% could safely be categorized as digital. For the UK, the proportion was around 38%.

 

UK’s BPO deals

In 2018, UK signed $2.26 billion (TCV) BPO deals in the “above $75 million” category, up 346% over 2017, although overall signings were down. The public sector still dominates signings. In 2018, 35% of the large outsourcing deals came from the public sector. Software and high tech (15%) and banking and financial services (10%) were the next two. Banking and financial services, a major sector, plunged 7% compared to 2017. The public sector still dominates signings: In 2018, 35% of the large outsourcing deals came from the public sector. Software and high tech (15%) and banking and financial services (10%) were the next two. Banking and financial services, a major sector, plunged 7% compared to 2017.

 

Digital deal values climb rapidly

Another proof point supporting the annexation of IT by digital is that the TCV of digital services has increased by 20% compared to last year. Again, this supports the relevance of outsourcing to digital and the lack of a viable contracting mechanism for large transformations. But, this also shows that enterprise buyers’ focus has shifted beyond cost savings and efficiency with improved business metrics, better customer experience, and enhanced time to market driving the adoption of digital and disruptive technologies within these major deals.


Top 100 outsourcing contracts of 2018

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