2011 2nd Half & Full Year, Asia Pacific TPI Index

1,295 views

Published on

The global outsourcing industry is constantly evolving through new contracting award characteristics and an expanding universe of successful service providers. ISG's TPI Index helps industry participants, enterprises and organizations keep pace and capitalize from the latest data on outsourcing trends. It is the authoritative source for marketplace intelligence related to outsourcing: transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

Published in: Business, News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,295
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

2011 2nd Half & Full Year, Asia Pacific TPI Index

  1. 1. Second Half and Full Year 2011 Mark Bryan Bank of America Merrill Lynch © 2012 Information Services GroupAll Rights Reserved 31 January 2012isg-one.com
  2. 2. 2 Welcome to the 11th Semi-Annual Asia Pacific TPI Index Call Covering the state of the outsourcing industry for commercial contracts with total contract value greater than $25 million. Arno Franz Partner & President, Asia Pacific Michael Rehkopf Dinesh Goel Partner, Partner, North Asia India © 2012 Information Services GroupAll Rights Reservedisg-one.com
  3. 3. 3 At A Glance “ BUSIEST YEAR EVER IN THE BROADER MARKET WITH 870 CONTRACTS AWARDED EVERY REGION EXPERIENCED RECORD SETTING CONTRACT ACTIVITY IN 2011 80% OF ALL 2011 MEGA DEAL TCV IN EMEA “ ASIA PACIFIC & AMERICAS TCV OFF WHILE EMEA TCV AT ALL-TIME HIGH IN 2011 ITO TCV BEAT ITS 5-YEAR AVERAGE, BUT WAS DOWN Y/Y BPO TCV ↑ Y/Y WITH RECORD ACTIVITY LEVELS 2H11 TCV 2H11 Y/Y 2H11 2011 TCV 2011 Y/Y Score Card ($B)* Change Counts ($B)* Change Global Market $ 52.6 22% 410 $ 95.0 3% Mega Deals $ 16.0 20% 6 $ 22.4 -3% Asia Pacific $ 4.8 -32% 43 $ 8.9 -10% EMEA $ 32.6 43% 188 $ 55.3 27% Americas $ 15.2 16% 179 $ 30.9 -20% ITO $ 37.1 11% 251 $ 64.2 -9% © 2012 Information BPO $ 15.5 62% 159 $ 30.9 43% Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  4. 4. 4 Regional Full Year Contract Trends While every region experienced record-setting contract activity, only EMEA translated that into increased TCV for the year Annual TCV ($B)* Annual # Contracts Americas EMEA Asia Pacific Americas EMEA Asia Pacific $55.3 397 $50.7 358 $43.6 366 332 $38.7 $30.9 214 $22.1 121 95 107 $9.9 $8.9 42 $9.9 2002 03 04 05 06 07 08 09 10 2011 2002 03 04 05 06 07 08 09 10 2011 © 2012 Information Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  5. 5. 5 Broader Market Shift Towards Smaller Contracts Contract counts in the smallest band, $25M to $99M in TCV, have grown strongly since 2005 Annual Counts Comparison by TCV Bands $25M-$99M $100M-$999M $1B+ 663 2007 – 2011 CAGR ↑ 15% 384 212 197 149 16 10 © 2012 Information 2002 03 04 05 06 07 08 09 10 2011 Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  6. 6. 6 Asia Pacific Full Year Contract Trends TCV was down in 2011 as more contracts than ever were signed in the region but of smaller value. Annual TCV ($B)* Comparison Avg of Prior 5 Yrs $10.6 ↓10% $11.2 $11.1 $12.5 $9.9 $10.3 $9.9 $8.9 $6.8 $8.2 $4.3 2002 03 04 05 06 07 08 09 10 2011 Annual Counts Comparison Avg of Prior 5 Yrs 107 95 85 42 © 2012 Information 2002 03 04 05 06 07 08 09 10 2011 Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  7. 7. 7 Asia Pacific Half Year Contract Trends TCV for the second half of 2011 fell 32% year-on-year. It was the weakest second half performance in 5 years for TCV & in 4 years for contract numbers Half Year TCV ($B)* Comparison Avg of Prior 5 2Hs $5.9 ↓32% $7.9 $7.1 $6.6 $6.1 $5.7 $4.8 $4.7 $2.5 $3.4 $2.8 2H02 2H03 2H04 2H05 2H06 2H07 2H08 2H09 2H10 2H11 Half Year Counts Comparison Avg of Prior 5 2Hs 47 46 43 21 © 2012 Information 2H02 2H03 2H04 2H05 2H06 2H07 2H08 2H09 2H10 2H11 Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  8. 8. 8 Asia Pacific Comparison of Activity by TCV Bands Robust growth in the number of smaller contracts added strength to the market and partly offset the rollercoaster effect of mega relationship awards Distribution of Contracts by TCV Bands $25M-$99M $100M + Contract # by TCV Band TCV by Band 86 $8.8 $5.5 $3.3 21 21 21 $1.0 2002 03 04 05 06 07 08 09 10 2011 2002 03 04 05 06 07 08 09 10 2011 Average Contract Size for $100M + Band Avg of Prior 5 Yrs $0.32 $0.42 $0.39 $0.35 $0.36 $0.22 $0.30 $0.24 $0.24 $0.27 $0.26 © 2012 Information Services Group 2002 03 04 05 06 07 08 09 10 2011All Rights Reservedisg-one.com *Contracts with TCV > $25M
  9. 9. 9 Asia Pacific ITO Contract Trends The number of ITO contract awards increased Y/Y but TCV was pulled down by smaller contract values and fewer mega deals/mega relationships ITO Annual TCV ($B)* Avg of Prior 5 Yrs $7.8 $8.1 $8.2 $8.8 $9.2 $8.2 $6.8 $5.9 $6.5 $4.0 $4.3 2002 03 04 05 06 07 08 09 10 2011 ITO Annual Counts Avg of Prior 5 Yrs 70 59 61 28 © 2012 Information Services Group 2002 03 04 05 06 07 08 09 10 2011All Rights Reservedisg-one.com *Contracts with TCV > $25M
  10. 10. 10 Asia Pacific BPO Contract Trends BPO showed robust Y/Y growth in the region with TCV up 35% and contract numbers up by 9% BPO Annual TCV ($B)* Avg of Prior 5 Yrs $5.2 $2.8 $3.3 $0.4 $2.0 $2.5 $2.4 $2.3 $1.8 $1.3 $1.7 2002 03 04 05 06 07 08 09 10 2011 BPO Annual Counts 37 Avg of Prior 5 Yrs 34 26 14 © 2012 Information 2002 03 04 05 06 07 08 09 10 2011 Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  11. 11. 11 Asia Pacific Trends by Country Smaller contract values in India drove down TCV in 2011 2011 TCV ($B)* Compared with Prior 5 Years by Country Prior 5 Yr Range Average 2010 2011 $7 $6 51% of contracts won by HP, IBM and Telstra $5 $4.59 $4 70% of contracts won by HCL, IBM, TCS and Wipro $3 $2.70 $2 $1 $0.57 $0.49 $0.31 $0.18 $- $0.03 Australia & India Japan China Thailand South Korea Other © 2012 New Zealand Information Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  12. 12. 12 Asia Pacific Industry Segment Trends by TCV Financial Services and Manufacturing TCV lowest in the last 5 years, while other sectors finished close to their 5 year average 2011 TCV ($B)* Compared with Prior 5 Years by Industry Prior 5 Yr Range Average 2010 2011 $6 $5 $4 $3 $3.00 $3.09 $2 $1 $0.99 $0.68 $0.64 $0.40 $0 $0.00 $0.07 © 2012 Information Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  13. 13. 13 Asia Pacific Industry Segment Trends by Contract Number Almost all sectors recorded an increase in contract awards, albeit at smaller contract values 2011 Contract Numbers Compared with Prior 5 Years by Industry Prior 5 Yr Range Average 2010 2011 40 47% of contracts 35 34 won by HCL, IBM, Infosys and TCS 65% of contracts won 30 by IBM, Infosys, TCS and Tech Mahindra 25 23 20 21 43% of contracts won by Genpact, 15 HCL, IBM 12 10 8 7 5 2 0 0 © 2012 Information Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  14. 14. 14 Asia Pacific Outsourcing Revenue Trends As evidenced by a CAGR of 8% in active contracts and 4% in annualised revenues, the Asia Pacific market remains an attractive region for providers Annualized Revenue & Active Contract Trends Annualized Revenue ($B)* Active Contracts 547 502 $10.6 $10.4 2007 2008 2009 2010 2011 2007 to 2011 Active Contracts CAGR: ↑ 8% © 2012 Information 2007 to 2011 Annualized Revenue CAGR: ↑4% Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  15. 15. 15 Telco to Telco Regional Trends Following a banner year in each region in 2010, TCV and contract numbers dropped in 2011 Annual TCV ($B)* Annual Contract # Americas Asia Pacific EMEA Americas Asia Pacific EMEA $12.7 26 $9.9 20 $9.3 18 11 $4.1 8 $3.3 7 8 5 $1.2 5 $0.2 $0.1 2002 03 04 05 06 07 08 09 10 2011 2002 03 04 05 06 07 08 09 10 2011 © 2012 Information Services GroupAll Rights Reservedisg-one.com * Telco to Telco ITO Contracts with TCV > $25M
  16. 16. 16 Asia Pacific Market Share Comparison by Provider Category India-heritage firms dominated contract activity but this dominance has not yet translated to TCV 2011 Asia Pacific Market Share by Number and TCV of Awards by Service Provider Category US-heritage India-heritage Other ITO TCV * 53% 22% 25% ITO Contract # 37% 41% 22% BPO TCV * 18% 27% 55% BPO Contract # 13% 46% 41% © 2012 Information Services GroupAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  17. 17. 17 Asia Pacific Top 5 Service Providers by TCV and Contracts The Top 5 Service Providers, based on TCV awarded and Contracts in 2011, listed in alphabetical order ITO* BPO* TCV Contracts TCV Contracts HP Fujistu BSA Genpact IBM HCL Downer HCL Infosys HP Genpact IBM Mahindra Satyam IBM IBM Infosys Telstra Infosys TCS TCS Mahindra Satyam © 2012 Information *Contracts with TCV > $25M Services GroupAll Rights Reserved Note: Service providers in alphabetical order; no rankings implied. Placements based on 2011TCV commercial contract awards sourcedisg-one.com from ISG contracts database.
  18. 18. 18 Key Long-term Trends in Sourcing Structure 1 Shift in Enterprise Decision Maker’s Solution Requirements Longevity Disposability 2 Shift in ITO Enterprise Pricing Strategies Pricing Bands Utility Pricing 3 Shift in BPO Enterprise Purpose, Spurring Activity Traditional Industry 4 Global Service Provider Community Changing Shape Back-office Specific © 2012 Information Services Group $All Rights Reservedisg-one.com
  19. 19. 19 Emerging Set of Global Service Providers? The 15 top service providers in each region based on Total 2011 TCV awarded. EMEA Asia Pacific Americas Accenture Accenture Accenture BT BT BT Global HCL HCL HCL Providers HP HP HP IBM IBM IBM TCS TCS TCS Fujitsu Fujitsu Genpact Genpact Multi- Infosys Infosys Regional Capgemini Capgemini CSC CSC T-Systems T-Systems Aegis BSA CGI Atos Downer EDI Cognizant Capita Mahindra Satyam RR Donnelly Regional Logica Telstra Xerox © 2012 Sabre Holdings Inc. Xchanging Information Services Group WiproAll Rights Reserved Note: Service providers in alphabetical order; no rankings implied.isg-one.com Placements based on 2011 TCV commercial contract awards sourced from ISG contracts database.
  20. 20. 20 Asia Pacific TPI Index 2011 Summary and Outlook ► Busiest year ever for contracting activity as all regions set a record for number of contract signings market ► Global TCV in 2011 up 3% Y/Y, slightly above our 2011 forecast Summary ► Increase of smaller deals in Asia Pacific provides stability to the underlying market ► ITO still dominated the market in Asia Pacific, though BPO value and volume grew strongly ► 5-7% growth in 2012 contracting activity expected from Asia market Pacific and BPO sectors Outlook ► Global TCV to hold firm in 2012 ► Emergence of a new set of Global Service Providers? © 2012 Information Services GroupAll Rights Reservedisg-one.com
  21. 21. 21 Learn More Please contact us with your questions and comments. ►Arno Franz Partner & President, Asia Pacific +61 (0) 2 9006 1610 arno.franz@isg-one.com ►Michael Rehkopf ►Dinesh Goel Partner, North Asia Partner, India +61 (0) 414 430 519 +91 98458 93787 michael.rehkopf@isg-one.com dinesh.goel@isg-one.com © 2012 Information www.considerthesourceblog.com Services GroupAll Rights Reservedisg-one.com
  22. 22. www.isg-one.com

×