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IT dominates UK outsourcing industry

Public sector is just 16 percent of £41.7 billion a year market

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IT outsourcing makes up the largest part of the UK’s outsourcing industry, according to a new report.

The Oxford Economics research, commissioned by the Business Services Association, found that based on 2009 data, IT and data-related outsourcing has an annual turnover of £41.7 billion, or 20 percent of the industry’s £207 billion total turnover. The UK outsourcing industry represents eight percent of the UK economic output.

Although IT was closely followed by property services outsourcing (£39 billion), it employs far fewer people – just 340,000 compared to property services’ 590,000.

The private sector generally contributed more to outsourcing turnover across all sectors, apart from catering and security services. The public sector represented £82 billion (40 percent) of the total outsourcing industry, compared to £125 billion (60 percent) by the private sector.

In IT, the private sector was responsible for 84 percent of the IT outsourcing turnover (£35 billion), while the public sector contributed just £6.7 billion a year.

Analysts have welcomed the new research, which they believe puts IT outsourcing into context and highlights its significance in the UK.

“It shows how important outsourcing is to the UK economy,” TechMarketView analyst Richard Holway wrote on his blog. “Indeed, it is far more advanced here than in any other European country.”

Bindi Bhullar, director of global IT services provider and outsourcer HCL Technologies, added: “Until now, there has been a reluctance to openly discuss the core benefits outsourcing brings to the UK economy. It is great to finally see credible research highlighting the significance of IT and IT-related BPO (Business Process Outsourcing) into context. This report shows how IT outsourcing has fully developed into a mature market.”


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