Outsourcing spend fell 14 per cent across EMEA in 2010

But 2010 was a record year for restructuring spend

Outsourcing spend across EMEA fell 14 per cent to €30bn (£25bn) in 2010 compared with the previous year, according to a report from outsourcing data and advisory firm TPI.

This trend is mirrored globally, with outsourcing spend - that is, spend on business process and IT outsourcing - down to €80bn from €90bn in 2009.

Duncan Aitchison, partner and president, EMEA, TPI, said: "Although these figures appear to show a reduction in spend, it is actually just the low end of normal, and reflects a pretty standard year for outsourcing."

In the same year, however, restructuring spend, which refers to a renewal and renegotiation of outsourcing contracts, jumped 118 per cent to €11bn, the highest total ever recorded and more than one-third of the overall market for the year - up from 20 per cent.

"Restructurings were the big story for the European outsourcing market in 2010," said Aitchison.

He added: "And considering the number of contracts up for renewal in the year ahead, we anticipate that trend will continue, though the value of contracts awarded will likely fall back to pre-2010 levels."

IBM benefited most from this trend, winning restructuring mega-deals at ABN Amro, Danske and Nordea Banks.

While outsourcing spending in the UK's commercial sector declined for the second consecutive year, spending in the public sector grew, accounting for 77 per cent of the total value. The overwhelming majority of public sector outsourcing in the EMEA region continues to happen in the UK - accounting for 92 per cent in 2010.

The data also shows companies are migrating towards smaller contract awards and multi-sourcing - this trend towards multi-sourcing has been evident for 10 years, and crosses IT and BPO outsourcing as well as all vertical sectors.

"Like their counterparts around the world, European companies are increasingly opting to employ multi-sourcing strategies," said John Keppel, partner and president, information services and chief marketing officer, TPI. "Using multiple providers, they can customise their sourcing solutions and leverage the best skills in each market. We expect companies will continue to multi-source allowing them to tap into the best talent possible for their needs."