Global TPI Index - 4Q12 and FY12

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ACV down slightly for the year on weaker than typical 4Q results. Number of mega relationship contracts up for 2012, lifting ACV when overall contract numbers were down. BPO expanded on several large deals while ITO performance was off for 2012. Asia Pacific surged in 2012 while EMEA struggled on a weak first half. Guarded optimism for 2013 with a possible slowdown second quarter.

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Global TPI Index - 4Q12 and FY12

  1. 1. The TPI IndexGlobal Sourcing Market Data and Insights Fourth Quarter and Full Year 2012 Hosted by: Moshe Katri, Cowen and Company 16 January 2013
  2. 2. 2 Welcome to the 41st Quarterly Outsourcing Index Review Covering the state of the outsourcing industry for global, commercial contracts.* John Keppel Dr. David Howie President & Chief Partner EMEA Marketing Officer Esteban Herrera Partner Americas © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  3. 3. 3 At A Glance © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  4. 4. 4 Broader Market Contract Award Trends ACV was down 27% Y/Y and 11% Q/Q on a strong 3Q and as the industry paused due to the US Election. For the full year, ACV of $21B was down 3% from 2011. Broader Market ACV ($B)* Broader Market Counts © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  5. 5. 5 Broader Market Contract Trends for the Largest Deals 34 Mega-relationships were awarded in 2012, up 36%. Restructuring activity is prevalent in large deals for the third straight year. Mega-relationship Contracts - ACV > $100M Mega-relationship Counts Mega-relationship New/Restructured ACV © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  6. 6. 6 ITO Contract Award Trends ITO ACV was down 37% Y/Y and 18% Q/Q. For the full year, ACV was down 11% on diminishing New Scope awards. ITO Annual ACV ($B)* ITO Counts Top 15 ITO Providers by 2012 ACV Awarded Accenture HCL Atos HP BT IBM Capgemini Infosys CGI1 Mahindra Satyam1 CSC TCS © 2013 Information Dell T-SystemsServices Group, Inc. Fujitsu 1New in 2012All Rights Reservedisg-one.com Note: Service providers in alphabetical order; no rankings implied. Placements sourced from ISG Contracts Knowledgebase®. *Contracts with ACV ≥ $5M
  7. 7. 7 BPO Contract Award Trends BPO ACV was flat Y/Y and up 5% Q/Q. For the full year, ACV was up 14% because of several large contract awards. BPO Annual ACV ($B)* BPO Counts Top 15 BPO Providers by 2012 ACV Awarded Accenture2 ISS Global Aditya Birla Minacs Jones Lang LaSalle Capgemini2 Mahindra Satyam Genpact2 MITIE Group HCL2 Sodexho Alliance © 2013 HP Xchanging Information IBM2 Xerox2Services Group, Inc.All Rights Reserved Infosys2 2Repeat from 2011isg-one.com Note: Service providers in alphabetical order; no rankings implied. Placements sourced from ISG Contracts Knowledgebase®. *Contracts with ACV ≥ $5M
  8. 8. 8 Americas Contract Award Trends Americas ACV was down 28% Y/Y and 9% Q/Q and full year ACV was down 3%. New Scope ACV remarkably consistent on a quarterly basis throughout the year. Americas ACV ($B)* Americas ITO and BPO ACV ($B)* Americas New and Restructured ACV ($B)* New Scope Restructured $5.9 $6.1 $5.6 $5.1 $5.3 $5.0 $4.9 $5.4 $4.2 $4.4 $2.8 $2.4 $3.5 $2.3 $2.5 $2.6 $2.4 $1.8 $1.9 $1.4 © 2013 InformationServices Group, Inc.All Rights Reserved 2003 04 05 06 07 08 09 10 11 2012isg-one.com *Contracts with ACV ≥ $5M
  9. 9. 9 Americas Contract Award Trends Detail LATAM markets were up significantly in 2012, while the U.S. market finished slightly below it’s five year average. Americas Sub-region ACV ($B)* Americas Industry ACV ($B)* © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  10. 10. 10 EMEA Contract Award Trends EMEA ACV was down 29% Y/Y and 6% Q/Q. For the full Year, ACV was down 12% on lighter contracting activity. EMEA ACV ($B)* EMEA ITO and BPO ACV ($B)* EMEA New and Restructured ACV ($B)* © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  11. 11. 11 EMEA Contract Award Trends Detail For the year, UK ACV was up 20% over 2011 and the Nordics and Benelux saw improvement. Financial Services ACV grew by 9% over 2011. EMEA Sub-region ACV ($B)* EMEA Industry ACV ($B)* © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  12. 12. 12 Asia Pacific Contract Award Trends Asia Pacific ACV was flat Y/Y and down 34% Q/Q; For the year, ACV is up 55% off strong performance from the second quarter. Asia Pacific ACV ($B)* AP ITO and BPO ACV ($B)* AP New and Restructured ACV ($B)* © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  13. 13. 13 Asia Pacific Contract Award Trends Detail The emerging markets of India, China and ASEAN lead Asia Pacific to record ACV result in 2012. ANZ, the traditional market leader, experienced a downturn. Asia Pacific Sub-region ACV ($B)* AP Industry ACV ($B)* © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  14. 14. 14 Top Service Providers Across the Globe The top service providers in each region based on total 2012 ACV awarded © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com Note: Service providers in alphabetical order; no rankings implied. *Contracts with ACV ≥ACV commercial contract awards sourced from ISG Contracts Knowledgebase ®. Placements based on 2012 $5M
  15. 15. Special Topic for Fourth Quarter 2012 John Keppel President & Chief Marketing Officer
  16. 16. 16 Key Short-term Trends in Sourcing for 2013 and Beyond U.S. G201-500 Companies Recent Emerging Markets to Sourcing Adoption Rate Expands Continue their Increasing Large Deal Potential for Providers Impact on Sourcing ACV Adoption ACV Change from 2007 $$ Rate $ $$$ +150% $ $ +100% 2010 32% 2012 LatinAm China and Mexico and India BPO Expansion Continues with Industry Specific Solutions Leading the Way BPO ACV Change from 2010 +60% $ © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  17. 17. 17 Disruptive Technologies Shape Long-term Industry Trends Four disruptive technology trends impact enterprises today and shape long-term industry trends: Social Media, Mobility, Cloud Computing and Big Data. Social Media Collaboration Mobility Cloud Computing & Storage © 2013 Big Data/Analytics InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  18. 18. 18 Case Study: Tech Trends Spur Transformative Solutions BT “Global Trace“ provides TNT with a cloud-based solution that leverages Big Data and Analytics to improve customer satisfaction and operational efficiency. Social Media Collaboration Social Media Data + Supply Chain Data + External Data Sources Mobility Cloud Global Trace Computing & Storage utilizes real-time data stored in the Cloud and analyzed with software edge adaptors to improve © 2013 client decision making InformationServices Group, Inc. Big Data/AnalyticsAll Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  19. 19. 19 4Q12 TPI Index Summary and Outlook  4Q ACV underperformed 3Q, yet 2012 performance market nearly met 2011 levels summary  Fewer contracts were awarded for 2012, but Mega-relationships supported the market value  BPO ACV and Asia Pacific ACV helped lift Broader Market for 2012  Contract push-out and lingering fiscal uncertainties in both the U.S. and Europe could make for a softer first half in 2013 market  Outlook for 2013 ACV awards is one of cautious optimism outlook  Market growth, in terms of Annualized Revenue, is projected to be 3 - 4% in 2013 © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M
  20. 20. 20 Learn More Please contact us with your questions and comments. ► John Keppel President & Chief Marketing Officer +44 (0)7879 432 212 john.keppel@isg-one.com --- Media Contacts --- ► Andrew Park ► Gwennie Poor Director, ISG Cohn & Wolfe for ISG +1 919 259 9252 +1 212 798 9842 andrew.park@isg-one.com gwennie.poor@cohnwolfe.com © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com blog.isg-one.com *Contracts with ACV ≥ $5M
  21. 21. Fourth Quarter and Full Year 2012
  22. 22. 22 4Q12 TCV Scorecard The TPI Index has moved to ACV as the primary measure of the Broader Market. In transition, we will continue to provide a high-level TCV view of the market via a Scorecard analysis. 4Q12 4Q Y/Y 4Q Q/Q 2012 2012 Y/Y Scorecard TCV ($B)* Change Change TCV ($B)* Change Global Market $ 23.4 -33% -10% $ 99.1 -9% New Scope $ 15.8 -31% -6% $ 66.2 -9% Restructurings $ 7.6 -35% -16% $ 32.9 -10% Mega-deals $ 2.4 -78% -59% $ 16.0 -34% ITO $ 14.1 -40% -16% $ 62.6 -15% BPO $ 9.3 -17% 3% $ 36.5 1% Americas $ 7.8 -24% -16% $ 37.5 0% EMEA $ 12.8 -40% -4% $ 48.6 -22% Asia Pacific $ 2.8 -7% -13% $ 13.0 31% © 2013 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with ACV ≥ $5M$25M *Contracts with TCV ≥
  23. 23. www.isg-one.com

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