Strategy and markets

Capita is the UK’s leading provider of technology enabled customer and business process transformation and integrated professional support services. Our innovative, technology-led approach puts us at the forefront of the digital revolution currently sweeping through the business process services sector, enabling our clients to benefit from our investment in digital technologies, big data and analytics, innovative software and skilled people.

Our markets

The outsourcing market is well established in the UK and there is considerable headroom for growth. In 2016 we commissioned Ovum to review the total addressable UK market for customer management and BPM. Ovum’s research estimates that Capita’s total UK addressable market is £140.2bn per year, of which only £13.9bn was outsourced in 2016 (2015: £13.7bn). Of this £13.bn, 72% was in the private sector and 28% in the public sector.1

Our revenue split continues to be spread between public and private sectors at 47% and 53% respectively. As we continue to secure further growth in the private sector, we expect that Capita’s revenues will move to reflect the current market opportunity over time.

Our transformational capabilities are in strong demand which has led Ovum to again rank Capita as the number one BPM vendor by revenue, with 29.2% market share in 2016 (2015: 28.4%), a greater share than the rest of the top ten vendors combined.

Our strategy

We continuously develop and grow our capabilities, working more broadly with new and existing clients and transferring the skills and techniques applied successfully in industries we’ve worked with for years to new ones. This enables us to move into new market sectors, like mortgage servicing and science support and new territories, like Germany without risking our wider business. We build our existing internal talent, products and services, find and acquire specialist businesses that meet our strict return-on-investment criteria and acquire new talent, capabilities and infrastructure to provide an entry platform in new market segments and sectors. This strategy enables us to continuously enhance the skills and services we provide to existing and new clients and achieve greater penetration across multiple markets, growing our business every year.

Growing in the digital age

We have a diverse reach across 11 key vertical markets and deliver a vast range of services, but our plan for growth is underpinned by a clear vision of our core capabilities: to use technology to enable organisations to deliver their services better and at lower cost; to leverage our expertise to commercialise government IP and generate revenues from under-performing assets; and to deliver a step-change in customer experience through digital transformation.

Our business model means we can bring together the right resources and capabilities to meet the demands of our clients across a wide range of sectors. This approach has allowed us to grow from a company with 320 employees and a revenue of £25m in 1991 to a FTSE company with over 73,000 employees and revenue of £4.9bn in 2016. We have experts in our business development teams who understand the unique challenges facing the particular sectors we work in and we regularly talk with existing and potential clients, listening to their needs and developing potential solutions. These market experts are supported by our specialist practices who provide expertise in areas including digital, behavioural science, analytics, user experience and service design, which all help to keep us and our customers at the forefront of their markets.

As we move through 2017 we expect that overall there will be more opportunities in the private sector than the public sector, reflecting the relative sizes of those two markets and the factors that are currently driving change in each of them. Importantly, we’re well equipped to respond to the needs of clients across both.

Given the pressure on government spending, there will continue to be opportunities to help public sector organisations do things differently. This will include the ability to help local authorities commercialise their operations and enable them to generate income, as we are already doing in Barnet.

Through our recent success in building effective partnerships where we work with our clients to commercialise and grow their businesses, we are now experts in transforming businesses into success stories, generating new sources of income and creating jobs.

Across the private sector there is continued pressure to drive down costs and both improve and digitize their services. Again across all these areas we are ideally placed to help.

How we supported a major retailer during Black Friday
Results centre

Capita announced full year results 2016 on 02 March

Our customer management business
Our property and infrastructure business