Research and Markets has announced the addition of the “Outsourcing in the UK and Ireland” report to their offering.

The IT and business process outsourcing (BPO) market in the UK and Ireland was worth US$52 billion in 2009. This report combines primary research on customer satisfaction with assessments of market activity to present a multifaceted view of the outsourcing industry today.

The main findings of the report are:

• The UK and Ireland together accounted for more than 50% of European outsourcing by TCV in 2009
• UK’s share in the global outsourcing industry shrank to 16% in 2010
• Number of deals is down in 2010 from 2009, while average and total contract value are up
• The number of megadeals signed in 2010 was the highest since 2008
• Enterprises prefer short-term deals with a duration of three years or less
• Annual contract value rising steadily since 2009
• More than 60% of all contracts in 2010 were awarded by government
• Government continues to dominate signings by annual contract value
• More than 80% of contracts are awarded for IT services
• The top three vendors captured more than 60% of the TCV in 2010
• Seven of the top 10 vendors in 2010 are headquartered in Europe, but two of the top three are non-European firms
• No single vendor dominates the market in terms of the number of contracts awarded

UK and Ireland Outsourcing Market and Growth

• UK and Ireland IT and BPO market expected to reach $60bn by 2013
• Infrastructure-led outsourcing (ILO) will grow to $21bn by 2013
• Application-led outsourcing (ALO) will grow to $23bn by 2013
• BPO sector expected to reach more than $14bn by 2013, growing at a CAGR of 6.5%

The international benchmark for call centres and outsourcing used to be Ireland.

Well how the mighty have fallen.

Over the last two centuries the children of Ireland left in their millions and spread themselves around the world. For a long time Ireland was considered an employment black hole until the Celtic tiger roared into life and the sons and daughters of Ireland flooded home. Now things have turned sour again and people are been forced to leave their homeland in search of work. With money and investment leaving Ireland its call centre sector has fallen on hard times. The initial attraction to set up BPO call centres in Ireland was a very favorable tax regime which provided a crucial tool by attracting new foreign investment that gave birth to the now mortally wounded Celtic tiger.

The Irish government finally called for financial support from its EU partners and the IMF, in an effort to avoid the collapse of its insolvent banking sector. It is likely to total around €80-90bn. The bailout deal is aimed primarily at preventing a knock on effect of the Irish banking crisis breaking out across the rest of Europe. There is an urgent need for this threat to be contained, given the damage that could be wrought across Europe if left unchecked.
Financial assistance is likely to focus on providing substantial liquidity support to the banking sector while it undergoes several years of major restructuring (and possibly full nationalization).

The aim is to bring down the country’s large budget deficit. Investors, and millions of Irish voters, are unlikely to be impressed.

Doom and Gloom

A number of European governments have announced wide-ranging spending cuts to reduce debt levels, most notably Greece, Portugal, Spain, the UK and Ireland.

When outsourcing became mainstream in the late 1990s, Ireland was at the forefront of the then nascent industry. In those days people who were involved in the outsourcing space in Ireland were sought after for their knowledge and experience and Ireland rode the so-called Celtic tiger. How the mighty have they fallen and the wheel has turned.

Fast-forward to today, the Irish government’s deficit surged during the recession after it was forced to bail out the country’s banking system.

The recent rise in the interest rate that the Irish government bonds pay out, which hit record highs this week, suggests investors doubt whether these cuts will be enough to put the Irish economy, which suffered one of the deepest recessions in the Euro zone, back on track.

It looks increasingly likely that the Irish Republic will have to be bailed out by the EU and the International Monetary Fund to the tune of 60 Billion Euros.

Zoom & Boom

Zip over to India and the contrast could not be more apparent as India aims for double-digit economic growth. One of the major sectors unpinning this amazing growth is BPO.

India is aiming to achieve double-digit economic growth within two years, as the country’s recovery from the global downturn picks up pace.

Finance Minister Pranab Mukherjee said he was optimistic the economy should soon return to the 9% growth it achieved before the downturn.

The Indian economy grew by 8.8% between April and June this year.

It is the second fastest growing economy in the world behind China.

“We are all witness to an emerging new world order,” Mr. Mukherjee said, which would lead to a “more equitable arrangement for global prosperity.”