Worldwide service contracts reached $48 billion during the first half of 2022 as the lingering impact of the COVID-19 pandemic pushed for the accelerated adoption of digital technologies.
According to a report by market intelligence firm IDC, 94% of deals were in the IT outsourcing market, while the remaining six per cent were in Business Process Outsourcing (BPO) deals.
IDC Global Services and Market Trends Senior Research Manager Supriya Kamath said, “The push to become a digital-first organization has created opportunities for managed service providers with the expertise and resources to facilitate these efforts.”
IDC’s report further revealed that most IT outsourcing contracts are focused on digital transformation, cloud migration, and technology modernization.
On the other hand, the increased adoption of automation and AI-enabled technologies caused the decline of BPO contracts by 40%
As per the current economic slowdown, Kamath stated that the “overall number of deal signings in 2022 could be affected, although not severely.”
He explained that IT spending — especially towards digital services — has become an “integral part” of most companies’ growth and stability plans, that deals are expected to grow at an average deal size.