The TPI EMEA IndexEMEA Outsourcing Market Data and Insights          Second Quarter/First Half 2012                       ...
2                       Welcome to the 39th Quarterly Outsourcing Index Call                       Covering the state of t...
3                       At A Glance                                              “         GLOBAL BROADER MARKET TCV UP Y/...
4                       Global Broader Market Contract Award Trends                       2Q12 TCV was up 7% Q/Q and Y/Y. ...
5                       EMEA Contract Award Trends                       EMEA TCV was down 21% Y/Y and 11% Q/Q. Year to da...
6                       EMEA Mega-deal & Mega-relationship Trends                       The increase in the number of Mega...
7                       EMEA New Scope & Restructuring Trends                       Both New Scope and Restructurings drop...
8                       EMEA Country Details in Contract Award Trends                       While all countries fell behin...
9                       EMEA ITO Contract Award Trends                       EMEA ITO TCV dropped 26% in the first half of...
10                       EMEA BPO Contract Award Trends                       Although BPO contract numbers dropped in the...
11                       EMEA Industry Details in Contract Award Trends                       Only Financial Services and ...
12                       Public Sector Analysis for EMEA                       UK Public Sector continues to dominate EMEA...
13                       Public vs Commercial Sector Analysis for the UK                       The Public Sector expands t...
14                       Public Sector Top 5 Service Providers                       The Top 5 Service Providers List, bas...
15                       Asia-Pacific Contract Award Trends                       Asia-Pacific TCV was up significantly Q/...
16                       Americas Contract Award Trends                       Americas TCV was up 6% Y/Y but down 6% Q/Q. ...
17                       Duration Trend Impact on the Global Market                       Declines in duration may appear ...
18                       Does the 1H12 duration dip signal the start of a step down?                       Durations decre...
19                       Factors Influencing Downward Trend in Contract Durations                                         ...
20                         2Q12 TPI Index Summary and Outlook                                                    Global Br...
21                       Learn More                          Please contact us with your questions and comments.          ...
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2nd Quarter 2012, EMEA TPI Index

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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.

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2nd Quarter 2012, EMEA TPI Index

  1. 1. The TPI EMEA IndexEMEA Outsourcing Market Data and Insights Second Quarter/First Half 2012 Hosted by: Marc Geall, Deutsche Bank Software and IT Services Team Monday 16th July 2012
  2. 2. 2 Welcome to the 39th Quarterly Outsourcing Index Call Covering the state of the outsourcing industry for global, commercial contracts. Duncan Aitchison Partner & President North Europe, ISG Bernd Schaefer Partner & Managing Director, ISG Germany © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  3. 3. 3 At A Glance “ GLOBAL BROADER MARKET TCV UP Y/Y & Q/Q MEGA DEAL STRENGTH HELPED OFFSET WEAKER 2Q ACTIVITY GLOBALLY, BPO HAD SOLID GAINS Y/Y AND Q/Q “ EMEA COOLS AS ASIA-PACIFIC RETURNS AN IMPRESSIVE QUARTER AND HALF YEAR PERFORMANCE YEAR TO DATE, STRONG MEGA DEAL AND ASIA-PACIFIC RESULTS WERE NOT ENOUGH TO OFFSET BROADER MARKET DECLINE 2Q12 TCV 2Q Y/Y 2Q Q/Q 1H12 1H Y/Y Score Card (€B)* Change Change TCV (€B)* Change Global Market € 17.1 7% 7% € 33.1 -8% Mega Deals € 5.0 180% 320% € 6.2 23% New Scope € 12.4 9% 34% € 21.6 -22% Restructurings € 4.7 1% -31% € 11.5 39% ITO € 10.4 6% -5% € 21.4 -6% BPO € 6.7 7% 32% € 11.7 -13% © 2012 EMEA € 6.7 -21% -11% € 14.2 -24% InformationServices Group, Inc.All Rights Reserved Asia Pacific € 3.8 181% 162% € 5.2 44% Americas € 6.60 6% -6% € 13.7 flatisg-one.com *Contracts with TCV > €20M
  4. 4. 4 Global Broader Market Contract Award Trends 2Q12 TCV was up 7% Q/Q and Y/Y. Year to date, the TCV was down 8%. Quarterly TCV (€B)* TCV Avg of 4 Prior 2Qs € 18.13 € 21.2 € 17.6 € 17.7 € 16.0 € 16.0 € 17.1 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half-year Counts by TCV Bands Half-year TCV (€B)* €20-79M TCV Band €80M+ TCV Band 1H TCV 2H TCV Avg of 5 Prior 1Hs 1H 2H 1H 2H 366 € 34.3 € 42.3 € 35.1 € 45.8 327 308 € 36.3 250 € 36.6 404 291 286 277 111 130 99 113 € 39.2 € 34.0 € 40.9 € 36.1 © 2012 231 € 32.5 € 33.1 Information 116 115 124 111 96Services Group, Inc.All Rights Reserved 2008 09 10 11 2012 2008 09 10 11 2012 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  5. 5. 5 EMEA Contract Award Trends EMEA TCV was down 21% Y/Y and 11% Q/Q. Year to date, TCV was down by 24%. Quarterly EMEA TCV (€B)* TCV Avg of 4 Prior 2Qs € 13.0 €8.8 € 8.5 € 7.5 € 6.7 € 7.2 € 6.7 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half-year EMEA Counts by TCV Bands Half-year EMEA TCV (€B)* €20-79M TCV Band €80M+ TCV Band 1H 2H 1H 2H 2H TCV 1H TCV Avg of 5 Prior 1Hs 158 157 € 14.9 € 27.8 148 € 18.6 € 16.4 € 21.8 102 $18.0 171 125 108 51 61 52 59 € 23.9 © 2012 90 105 € 15.6 € 17.6 € 18.8 62 50 54 € 14.2 € 14.2 Information 45 45Services Group, Inc.All Rights Reserved 2008 09 10 11 2012 2008 09 10 11 2012 07 08 09 10 11 2012isg-one.com *Contracts with TCV > €20M
  6. 6. 6 EMEA Mega-deal & Mega-relationship Trends The increase in the number of Mega-relationships in 2012, was not enough to make up for the drop in Mega-deal numbers and TCV. Quarterly EMEA Mega-deal TCV (€B)* TCV Counts 4 3 3 2 2 1 1 1 € 6.2 € 4.7 € 4.7 1 € 5.8 € 4.5 1 0 € 2.5 € 1.8 0 € 1.2 € 0.9 € 0.8 € 1.0 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 55% of Mega Relationships in the Quarterly EMEA Mega-relationship ACV (€B)* last 5 quarters were Restructurings 9 ACV Counts 5 4 3 3 1 € 1.1 € 1.4 € 1.1 © 2012 € 1.0 € 0.7 € 1.0 € 0.6 Information € 0.2 € 0.3 € 0.3 € 0.5 € 0.4Services Group, Inc. € 0.1All Rights Reserved 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12isg-one.com *Contracts with TCV > €20M
  7. 7. 7 EMEA New Scope & Restructuring Trends Both New Scope and Restructurings dropped Q/Q. Year to date, New Scope TCV fell 32% as Restructurings rose 5%. Quarterly EMEA New Scope vs. Restructuring TCV (€B)* New Scope Restructured € 9.8 € 5.5 € 5.5 € 5.7 € 5.2 € 4.7 € 2.7 € 2.4 € 2.0 € 1.2 € 1.2 € 1.7 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half-year EMEA New Scope TCV (€B)* Half-year EMEA Restructuring TCV (€B)* 1H TCV 2H TCV Avg of 5 Prior 1Hs 1H TCV 2H TCV Avg of 5 Prior 1Hs € 9.9 € 12.2 € 19.5 € 15.5 € 6.5 € 13.9 € 14.2 € 12.1 € 5.0 € 3.8 € 20.1 € 2.5 € 2.4 © 2012 € 13.1 € 11.5 € 11.8 € 14.6 € 5.8 Information € 9.9 € 2.5 € 3.9 € 2.7 € 4.2 € 4.4Services Group, Inc.All Rights Reserved 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  8. 8. 8 EMEA Country Details in Contract Award Trends While all countries fell behind their first quarter values, only Scandinavia, France and Southern Europe reached their five year average. Like-half EMEA TCV (€B)* by Country Prior 5 Period Range Average 1H11 1H12 € 12 € 10 €8 €6 € 5.69 €4 € 3.08 €2 € 2.12 € 1.26 € 0.91 € 0.68 € 0.37 € 0.13 €0 © 2012 UK & Ireland DACH Scandinavia Benelux Africa & France Southern E. Europe & Information Middle East Europe RussiaServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  9. 9. 9 EMEA ITO Contract Award Trends EMEA ITO TCV dropped 26% in the first half of 2012 as the number of ITO contracts signed in the region declines across all TCV bands. Half-year EMEA ITO TCV (€B)* 1H TCV 2H TCV Avg of 5 Prior 1Hs Top 10 EMEA ITO Providers by 1H12 TCV € 11.1 € 15.2 € 20.8 € 17.6 € 8.7 € 13.8 Accenture € 17.7 € 15.1 BT € 12.7 € 11.3 € 12.3 € 9.1 CSC 2007 2008 2009 2010 2011 2012 Fujitsu HCL Half-year EMEA ITO Counts by TCV Bands HP €20-79M TCV Band €80M+ TCV Band IBM 1H 2H 1H 2H Infosys TCS 119 105 T-Systems 110 71 118 97 36 46 38 47 Note: Service providers in alphabetical order; no © 2012 67 70 70 rankings implied. Placements based on ISG Information 45 36 42 37 31 contracts database.Services Group, Inc.All Rights Reserved 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  10. 10. 10 EMEA BPO Contract Award Trends Although BPO contract numbers dropped in the first half of 2012, BPO TCV remains ahead of its five year average. Half-year EMEA BPO TCV (€B)* 1H TCV 2H TCV Avg of 5 Prior 1Hs Top 10 EMEA BPO Providers by 1H12 TCV € 6.9 € 3.8 € 7.7 € 4.2 HCL € 4.2 € 3.4 € 6.2 € 6.6 HP € 5.1 € 3.0 € 2.9 € 2.6 Infosys 2007 2008 2009 2010 2011 2012 Johnson Controls Logica Half-year EMEA BPO Counts by TCV Bands Mahindra Satyam €20-79M TCV Band €80M+ TCV Band Mitie 1H 2H 1H 2H Serco 53 Sodexo 38 Xchanging 38 31 53 35 38 15 12 Note: Service providers in alphabetical order; no © 2012 28 15 14 rankings implied. Placements based on ISG 23 17 17 14 Information 9 8 contracts database.Services Group, Inc.All Rights Reserved 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  11. 11. 11 EMEA Industry Details in Contract Award Trends Only Financial Services and Travel, Transport & Leisure sectors finished ahead of last year’s first-half totals. Like-Half EMEA TCV (€B)* by Industry Prior 5 Period Range Average 1H11 1H12 €9 €8 €7 €6 €5 € 4.9 €4 € 3.8 €3 €2 € 1.3 € 1.4 € 1.5 €1 € 0.8 € 0.6 €- € 0.1 © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  12. 12. 12 Public Sector Analysis for EMEA UK Public Sector continues to dominate EMEA Public sector contracting. UK Public Sector Share of the EMEA Public Sector Market Years 2007 – 2011 TCV (€ B)* Year-to-date 2012 TCV (€ B)* UK Public Sector UK Public Sector Other EMEA Public Sector Other EMEA Public Sector € 1.1 € 22.1 9% 19% € 94.4 € 11.4 81% 91% © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  13. 13. 13 Public vs Commercial Sector Analysis for the UK The Public Sector expands to two-thirds of the UK market as the Commercial outsourcing market shrinks. UK Public Sector vs. Commercial Sector Market Share Years 2007 – 2011 TCV (€ B)* Year-to-date 2012 TCV (€ B)* UK Public Sector UK Public Sector UK Commercial Sector UK Commercial Sector € 5.7 € 69.5 33% 42% € 94.4 € 11.4 58% 67% © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  14. 14. 14 Public Sector Top 5 Service Providers The Top 5 Service Providers List, based on TCV awarded in the first half of 2012, for contracts over € 20 million in total value, shown in alphabetical order. Top 5 Top 5 UK Public Sector Other EMEA Public Sector Capita Accenture Carillion Atkins CSC BT HP KPN Logica Tieto Note: Service providers in alphabetical order; no rankings implied Placements based on UK Public Sector contract awards sourced from ISG contracts database © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  15. 15. 15 Asia-Pacific Contract Award Trends Asia-Pacific TCV was up significantly Q/Q and Y/Y with most TCV awards in Financial Services and Telecom. Year to date, TCV was up 44%. Quarterly Asia-Pacific TCV (€B)* Includes a TCV (B) Avg of 4 Prior 2Qs €1 B Mega Deal in India € 3.7 € 3.8 € 1.9 € 1.4 € 1.1 € 1.3 € 1.4 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half-year Asia-Pacific Counts by TCV Bands Half-year Asia-Pacific TCV (€B)* €20-79M TCV Band €80M+ TCV Band 2H TCV 1H TCV Avg of 5 Prior 1Hs 1H 2H 1H 2H 36 € 5.3 36 € 4.6 42 41 € 6.4 € 3.9 € 5.7 53 € 3.7 40 43 18 13 9 € 4.6 € 5.1 € 5.2 © 2012 25 28 11 € 2.8 € 3.6 Information 11 19 8 13 16 € 2.2Services Group, Inc.All Rights Reserved 2008 09 10 11 2012 2008 09 10 11 2012 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  16. 16. 16 Americas Contract Award Trends Americas TCV was up 6% Y/Y but down 6% Q/Q. Mega-deals accounted for a substantial share of 2Q12 TCV. Year to date, TCV was flat. Includes €3B of Mega Quarterly Americas TCV (€B)* Deal activity, with €1.8 TCV Avg of 4 Prior 2Qs out of Brazil in Financial Services € 9.30 € 7.4 € 6.82 € 7.15 € 7.06 € 6.6 € 6.26 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half-year Americas Counts by TCV Bands Half-year Americas TCV (€B)* €20-79M TCV Band €80M+ TCV Band 2H TCV 1H TCV Avg of 5 Prior 1Hs 1H 2H 1H 2H 172 € 10.8 129 124 € 15.2 € 14.1 € 15.4 € 13.0 € 14.8 106 180 138 141 126 61 52 € 21.0 116 51 59 € 14.8 € 13.7 € 13.7 © 2012 € 12.3 € 12.5 Information 43 51 66 44 35Services Group, Inc.All Rights Reserved 2008 09 10 11 2012 2008 09 10 11 2012 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > €20M
  17. 17. 17 Duration Trend Impact on the Global Market Declines in duration may appear small, but even a slight decline can have large impact on TCV levels. What if all 1H12 contracts* had 1999 average durations of 6.4? 1H12 Actual TCV € 33 B 38% Hypothetical 1H12 TCV with 1999-2000 Durations € 46 B Average Contract Durations Over Time Avg Duration Duration Plateau 6.4 6.0 5.5 6.48 5.1 6.35 6.14 6.10 6.07 5.95 5.88 5.72 5.48 5.31 5.10 4.98 5.05 4.85 © 2012 InformationServices Group, Inc. 1999 00 01 02 03 04 05 06 07 08 09 10 2011 1H12All Rights Reservedisg-one.com *Contracts with TCV > €20M
  18. 18. 18 Does the 1H12 duration dip signal the start of a step down? Durations decreased across a range of contract types. Distribution of Contracts* Average Durations Fall Moves Towards Lower Durations for All Contract Sizes* Durations Durations Durations TCV < €160M TCV > €160M < 5 Years 5 - 6.9 Years 7+ Years 6.6 6.1 6.2 6.0 46% 51% 4.9 4.8 4.9 4.6 32% 34% 22% 15% 2009 1H12 2009 1H12 2009 1H12 2009 2010 2011 1H12 2009 2010 2011 1H12 BPO Duration Trends* Restructuring Duration Trends* 5.5 5.3 5.3 12% 5.0 10% 4.8 4.8 4.7 4.5 © 2012 Information 2009 2010 2011 1H12 2009 2010 2011 1H12Services Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  19. 19. 19 Factors Influencing Downward Trend in Contract Durations Average Duration for Stepped Up Market Competition New Adopters Amidst increased provider competition, companies ↓14% – particularly New Sourcing Adopters – push for 5.1 4.4 shorter contract commitments, leveraging the 2009 1H12 providers’ desire to seal the deal. Outsourcing Savvy Clients and Providers Solution improvements enable more efficient and effective delivery of innovations, making the best solutions at the best prices available via more frequent contract negotiations. Disposability of Cloud Solutions © 2012 Service Providers note that contracts with Cloud in scope are shorter InformationServices Group, Inc. in duration than Managed Services deals.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  20. 20. 20 2Q12 TPI Index Summary and Outlook Global Broader Market TCV up 7% Y/Y – strengthened by Mega Deals and increased activity in Asia-Pacific market EMEA TCV and contract numbers dropped both Q/Q and Y/Y summary EMEA BPO flat Q/Q, while global values gain traction Year to date, Global TCV was down 8% impacted by weak EMEA results and fewer contract awards Anticipate a soft 3Q against a tough Y/Y compare market 4Q TCV may pick up because of larger deals in the pipeline outlook Unprecedented levels of TCV in 2H12 are required for the market to meet the record-high 2011 TCV result © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > €20M
  21. 21. 21 Learn More Please contact us with your questions and comments. ► John Keppel ► Duncan Aitchison Partner & President Research & Partner & President Managed Services and Chief North Europe, ISG Marketing Officer +44 (0)1628 21702 +44 (0)7879 432 212 duncan.aitchison@isg-one.com john.keppel@isg-one.com --- Media Contacts --- ► Denise Colgan ► Louise Fernley Marketing Director, EMEA, ISG Cohn & Wolfe for ISG +44 1737 371523 +44 207 331 5365 denise.colgan@isg-one.com louise.fernley@cohnwolfe.com © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com www.considerthesourceblog.com *Contracts with TCV > €20M
  22. 22. www.isg-one.com
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