Nearshore Americas

Europe Outsourcing Spend is Bigger than North America

TPI, the largest sourcing data and advisory firm in the world and a unit of Information Services Group, Inc. (ISG), an industry-leading information-based services company, today released data showing that through the first three quarters of 2009, Europe surpassed North America as the leading region in the world for outsourcing spending by Forbes  Global 2000 (G2000) companies and is on track to end the year as the highest-spending region for the first time.
According to the TPI Momentum(SM) Market Trends & Insights 3Q09 Geography Report, European G2000 companies outspent their North American counterparts by approximately $1.2 billion in average annual contract value (ACV) through the third quarter. North America, which led the world in outsourcing spending by G2000 companies in 2008 with $29.6 billion in ACV versus $28.7 billion for Europe, looks poised to miss that mark this year and lose its top spot.
The TPI Momentum Market Trends & Insights 3Q09 Geography Report is the latest in the Market Trends & Insights series, which combines robust market data with expert analysis to provide a completely new perspective on the sourcing industry.
“Understanding the global outsourcing market requires up-to-date information on local and regional dynamics in every part of the world,” said Melany Williams, Partner and Managing Director, TPI Momentum. “This Report offers on-the-ground detail and analysis by TPI experts and advisors to help service providers and others identify and pursue the most promising opportunities – wherever they might lie.”
For each of the six regions, the Report analyzes contract trends, delivery center activity and business and political developments that impact the sourcing industry. Twenty-nine individual country profiles provide more detailed information about the sourcing climate within key markets, including changes in size, opportunities for future growth and penetration rates of service providers.
The Report also introduces a new research methodology, the TPI Outsourcing Viability Index, which compares the strengths and weaknesses of 115 countries on the key attributes that service providers look for when deciding where to establish a service delivery center, including Education & Workforce, Infrastructure & Technology and Political and Economic Stability. TPI designed the Index based on its experience evaluating service delivery locations for hundreds of outsourcing buyers.
Among the notable results from the TPI Outsourcing Viability Index:
— North America and Europe dominate the rankings, with the United States
and Canada at No. 1 and 3, respectively, and six European countries
making the top 10 – the United Kingdom (2), Germany (4), the Netherlands
(6), France (7), Switzerland (9) and Denmark (10).
— While other markets are growing slowly but steadily, India (13) and
China (21) have experienced a rapid rise in spending among their G2000
companies, with China’s market growth appearing to lag India’s by about
two years. Both countries were rated among the top 10 on the Sourcing
Environment dimension.
— Brazil (24), the highest-ranked country in Latin America, also made the
top 10 for Sourcing Environment. The Report found that Latin America is
home to the fourth-highest market opportunity among the regions with $3
billion in additional ACV potential.

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Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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