TPI, the largest sourcing data and advisory firm in the world and an Information Services Group company today released fourth-quarter and full-year 2010 data showing record restructuring activity dominating the outsourcing market in Europe, the Middle East and Africa (EMEA).

The 4Q10 EMEA TPI Index, which measures commercial outsourcing contracts valued at €20M or more, tallied total contract value (TCV) in the region of €10.5B, a 31 percent drop from the fourth quarter of 2009 but an 81 percent surge over the third quarter of 2010. Despite the sequential improvement in the fourth quarter, full-year 2010 TCV fell 14 percent to €30B.

During 2010, both the number of restructurings awarded and their value increased significantly. Restructuring TCV jumped 118% to €11B, the highest total ever recorded and more than one-third of the overall market for the year. IBM benefited the most from this trend, winning restructuring mega-deals at ABN Amro, Danske Bank and Nordea Bank.

“Restructurings were the big story for the European outsourcing market in 2010,” said Duncan Aitchison, Partner & President, EMEA, TPI. “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.”

Now in its 33rd consecutive quarter, the TPI Index provides a quarterly snapshot of the sourcing industry for clients, service providers, analysts and the media. It is the industry’s authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

The 4Q10 EMEA TPI Index found that during 2010, restructurings also had a big impact on mega-deal activity in the region, which had more mega-deals and mega-relationships than any other region. This led to an upsurge of activity in Germany, The Netherlands and the Nordics.

While outsourcing spending in the United Kingdom’s commercial sector declined for the second consecutive year, the public sector grew, accounting for 77% of local TCV. The overwhelming majority of public sector outsourcing in EMEA continues to happen in the U.K. – 92 percent in 2010.

Driven by restructuring mega-deal activity, EMEA’s Financial Services industry sector performed especially well, with almost €10B in TCV awarded in 2010, up 29 percent in comparison to 2009. The Travel and Transport, Energy and Business Services industry sectors also increased their TCV in 2010.

An analysis of TPI Index data shows clients steadily migrating towards smaller contract awards and multi-sourcing over the last decade. The percentage of Forbes Global 2000 companies based in Western Europe operating in a multi-sourced environment rose to 83 percent in 2010, and among these, 25 percent use five or more service providers. While some organisations in the region have begun consolidating their service provider relationships down to a select group of strategic partners, there has not been a swing back to single-sourcing, TPI research found.

“Like their counterparts around the world, European companies are increasingly opting to employ multi-sourcing strategies,” said John Keppel, Partner & 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 the preference of companies to multi-source will continue to grow as it allows them to tap into the best talent possible for their needs.”