The TPI IndexGlobal Sourcing Market Data and Insights                   Second Quarter 2012                            Hos...
2                       Welcome to the 39th Quarterly Outsourcing Index Call                       Covering the state of t...
3                                                    “                       At A Glance                                  ...
4                       Broader Market Contract Award Trends                       2Q12 TCV was up 7% Q/Q and Y/Y. Year to...
5                       Broader Market Mega-deals & Mega-relationships Trends                       Mega Deal TCV rebounde...
6                       Broader Market New Scope & Restructuring Trends                       New Scope was up 9% Y/Y and ...
7                       ITO Contract Award Trends                       ITO TCV was up 6% Y/Y but down 5% Q/Q. Year to dat...
8                       Top Service Providers Remain Consistent in ITO Market                       Since 2010 leading ITO...
9                       BPO Trends in Contract Awards > $25M in TCV                       BPO TCV was up 7% Y/Y and 32% Q/...
10                       An Expanded Look: BPO Active Contracts with TCV > $10M                       The Broader Market (...
11                       Top Service Providers in the BPO Market: TCV > $10M                                              ...
12                       EMEA Contract Award Trends                       EMEA TCV was down 21% Y/Y and 11% Q/Q. Year to d...
13                       Americas Contract Award Trends                       Americas TCV was up 6% Y/Y but down 6% Q/Q. ...
14                       Asia-Pacific Contract Award Trends                       Asia-Pacific TCV was up significantly Q/...
Special Topic for Second Quarter 2012
16                       Duration Trend Impact on the Market                       Declines in duration may appear small, ...
17                       Does the 1H12 duration dip signal the start of a step down?                       Durations decre...
18                       Factors Influencing Downward Trend in Contract Durations                                         ...
19                         2Q12 TPI Index Summary and Outlook                                                     Global ...
20                       Learn More                       Please contact us with your questions and comments.             ...
www.isg-one.com
Upcoming SlideShare
Loading in …5
×

Second Quarter 2012, Global TPI Index

1,265 views
1,200 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, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,265
On SlideShare
0
From Embeds
0
Number of Embeds
65
Actions
Shares
0
Downloads
21
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Second Quarter 2012, Global TPI Index

  1. 1. The TPI IndexGlobal Sourcing Market Data and Insights Second Quarter 2012 Hosted by:Joseph Foresi, Janney Montgomery Scott July 12, 2012
  2. 2. 2 Welcome to the 39th Quarterly Outsourcing Index Call Covering the state of the outsourcing industry for global, commercial contracts. John Keppel Partner & Chief Marketing Officer, ISG Duncan Aitchison Partner & President North Europe, ISG © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com *Contracts with TCV > $25M
  3. 3. 3 “ At A Glance BROADER MARKET TCV WAS UP Y/Y AND Q/Q MEGA DEAL STRENGTH HELPED OFFSET WEAKER 2Q ACTIVITY BPO HAD SOLID GAINS Y/Y AND Q/Q AS EMEA COOLS “ ASIA-PACIFIC RETURNS AN IMPRESSIVE QUARTER AND HALF YEAR PERFORMANCE, YEAR TO DATE, STRONG MEGA DEAL AND ASIA-PACIFIC RESULTS WERE NOT ENOUGH TO OFFSET BROADER MARKET DECLINE 2Q12 TCV 2Q Y/Y 2Q Q/Q 1H12 TCV 1H Y/Y Score Card ($B) Change Change ($B) Change Global Market $ 21.4 7% 7% $ 41.4 -8% Mega Deals $ 6.3 180% 320% $ 7.8 23% New Scope $ 15.5 9% 34% $ 27.0 -22% Restructurings $ 5.9 1% -31% $ 14.4 39% ITO $ 13.1 6% -5% $ 26.8 -6% BPO $ 8.3 7% 32% $ 14.6 -13% EMEA $ 8.4 -21% -11% $ 17.8 -24% © 2012 Asia-Pacific $ 4.7 181% 162% $ 6.5 44% InformationServices Group, Inc. Americas $ 8.3 6% -6% $ 17.1 flatAll Rights Reservedisg-one.com *Contracts with TCV > $25M
  4. 4. 4 Broader Market Contract Award Trends 2Q12 TCV was up 7% Q/Q and Y/Y. Year to date, the TCV was down 8%. Quarterly TCV ($B)* TCV (B) Avg of 4 Prior 2Qs $22.7 $26.5 $22.0 $22.1 $20.1 $20.0 $21.4 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H TCV (B) 2H TCV (B) 1H 2H 1H 2H 366 327 308 $42.9 $52.9 $43.8 $57.2 250 $45.4 404 291 286 277 111 130 99 113 $49.0 $51.1 $45.1 231 $40.7 $42.5 $41.4 © 2012 116 115 124 111 96 InformationServices Group, Inc. 2008 09 10 11 2012 2008 09 10 11 2012 2007 2008 2009 2010 2011 2012All Rights Reservedisg-one.com *Contracts with TCV > $25M
  5. 5. 5 Broader Market Mega-deals & Mega-relationships Trends Mega Deal TCV rebounded in 2Q12, driving up Quarterly and Year-to-date Results. 11 Mega Relationships were awarded in 2Q, the best result since 2009. Quarterly Mega-deal TCV ($B)* TCV (B) Counts 5 5 5 5 60% + of 2Q 4 Mega Deal 3 3 3 activity came 2 from Brazil and 1 1 1 1 India $8.3 $8.8 $7.2 $8.8 $6.2 $7.1 $6.3 $1.0 $2.6 $4.5 $4.1 $2.3 $1.5 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Quarterly Mega-relationship ACV ($B)* ACV (B) Counts 12 11 11 8 8 50% of Mega 7 Relationships 5 4 4 5 in the last five quarters were $1.9 $2.2 $1.8 $2.1 Restructurings $1.8 $1.8 $1.5 © 2012 $0.7 $1.0 $1.1 $0.6 $0.9 $0.9 InformationServices Group, Inc.All Rights Reserved 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12isg-one.com *Contracts with TCV > $25M
  6. 6. 6 Broader Market New Scope & Restructuring Trends New Scope was up 9% Y/Y and 34% Q/Q. Restructurings were flat Y/Y and down 31% Q/Q. Year to date, New Scope TCV was down 22% as Restructurings climbed 39%. Quarterly New Scope vs. Restructuring TCV ($B)* New Scope Restructured $16.8 $18.1 $15.5 $14.2 $11.5 $5.2 $8.5 $3.9 $5.8 $5.9 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year New Scope TCV ($B)* Half Year Restructuring TCV ($B)* 1H TCV (B) 2H TCV (B) Avg of 5 Prior 1Hs 1H TCV (B) 2H TCV (B) Avg of 5 Prior 1Hs $36.9 $31.3 $41.4 $34.6 $27.6 $35.5 $16.3 $22.7 $10.2 $34.4 $39.3 $33.5 $35.4 $34.8 $8.6 $11.6 $11.5 © 2012 $27.0 $15.7 $14.4 Information $6.3 $9.7 $9.0 $10.4Services Group, Inc.All Rights Reserved 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > $25M
  7. 7. 7 ITO Contract Award Trends ITO TCV was up 6% Y/Y but down 5% Q/Q. Year to date, TCV was down 6% due to light contracting activity. Quarterly ITO TCV ($B)* TCV (B) Avg of 4 Prior 2Qs $15.6 $17.9 $16.4 $15.8 $12.3 $13.7 $13.1 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H TCV (B) 2H TCV (B) 1H 2H 1H 2H 215 $34.2 210 $26.3 $38.6 $40.3 192 $29.1 155 233 111 130 99 113 186 170 169 $38.9 136 78 85 91 75 $30.0 $32.9 $29.4 $28.4 $26.8 © 2012 65 InformationServices Group, Inc. 2008 09 10 11 2012 2008 09 10 11 2012All Rights Reserved 2007 2008 2009 2010 2011 2012isg-one.com *Contracts with TCV > $25M
  8. 8. 8 Top Service Providers Remain Consistent in ITO Market Since 2010 leading ITO service providers have been remarkably consistent, battling for share amongst themselves. ITO TCV* Market Share Comparison by Provider Type 2007–2009 2010–1H12 ↓10% ↑3% 63% ↑7% 53% 15% 22% 22% 25% India-heritage EMEA and Asia Americas MNCs Cognizant Atos Accenture HCL BT AT&T Infosys Capgemini CGI Mahindra Satyam Fujitsu CSC TCS T-Systems Dell Wipro HP IBM © 2012 InformationServices Group, Inc. Note: Service providers in alphabetical order within groups; no rankings implied.All Rights Reserved Placements based on TCV commercial contract awards sourced from ISG contracts database.isg-one.com *Contracts with TCV > $25M
  9. 9. 9 BPO Trends in Contract Awards > $25M in TCV BPO TCV was up 7% Y/Y and 32% Q/Q. Year to Date, TCV was down 13%, but still performed above the average of recent first halves. Quarterly BPO TCV ($B)* TCV (B) Avg of 4 Prior 2Qs $7.0 Includes $8.6 $8.3 $7.8 $2.5B of $6.3 $6.3 Mega $5.6 Deal TCV 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H TCV (B) 2H TCV (B) 1H 2H 1H 2H 215 $16.6 $17.0 210 192 $16.3 $14.3 155 $9.6 171 116 $16.1 $16.7 $14.6 © 2012 95 105 108 43 43 30 33 $10.7 $13.1 $12.2 Information 38 30 33 36 31Services 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 > $25M
  10. 10. 10 An Expanded Look: BPO Active Contracts with TCV > $10M The Broader Market (TCV > $25M) accounts for most of BPO revenue while the growth is taking place in the $10M to $25M TCV segment. Annualized Revenues ($B) $35 $2.8 Current Revenue $30 TCV Band Revenue Share Growth $25 $28.8 >$10-$25M 9% 148% $1.1 $20 91% > $25M 91% 38% $20.8 95% $15 5 Years Ago Today Active Contract Counts 3,100 Active 2,600 Current Contracts 976 2,100 TCV Band Active Contracts Growth 36% 1,600 >$10-$25M 36% 124% 1,100 436 1,731 64% > $25M 64% 72% © 2012 70% 1,008 600 InformationServices Group, Inc. 100All Rights Reserved 5 Years Ago Todayisg-one.com *Contracts with TCV > $25M
  11. 11. 11 Top Service Providers in the BPO Market: TCV > $10M Active BPO Contracts by Function with the 12 Month Growth Rate ↑1.1% ↑13.1% ↑2.3% 373 ↑2.3% 346 ↑17.9% 306 268 ↓0.8% 191 128 F&A FSO Contact Center HRO Industry Specific Procurement Function Specific Market Share by Provider Types Global MNC India-heritage Function-specific 21% 35% 21% 42% 14% 18% 42% 48% 2% 27% 65% 63% 61% 47% 52% 31% 11% FSO HRO Contacts Center Procurement Industry Specific F&A BONY Mellon Accenture Aditya Birla Minacs Accenture Accenture Accenture Capita ADP Convergys Capgemini Alliance Data Capgemini CGI AonHewitt EXLService EXLService Atos EXLService CSC Capgemini Genpact Genpact Dell Genpact EXLService Capita IBM Global eProcure EXLService IBM First Data Ceridian Sitel IBM HCL Infosys FIS Fidelity TCS Infosys IBM TCS Fiserv Genpact Teletech Procurian TCS Wipro © 2012 State Street HP Services Vertex TCS WNS WNS Information TCS IBM Xerox Xchanging Xerox XeroxServices Group, Inc. Xchanging LogicaAll Rights Reserved Xerox NorthgateArinsoisg-one.com Note: Service providers in alphabetical order within functions; no rankings implied. *Contracts with TCV > $25M counts of commercial contract awards sourced from ISG contracts database. Placements based on active contract
  12. 12. 12 EMEA Contract Award Trends EMEA TCV was down 21% Y/Y and 11% Q/Q. Year to date, TCV was down by 24%. Quarterly EMEA TCV ($B)* TCV (B) Avg of 4 Prior 2Qs $16.2 $11.0 $10.6 $9.4 $8.4 $9.0 $8.4 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H 2H 1H 2H 1H TCV (B) 2H TCV (B) 158 157 148 $18.6 $34.7 102 $27.3 $23.3 171 $20.5 125 51 61 52 59 © 2012 105 108 $29.9 $23.5 90 $19.6 $17.7 $22.0 $17.8 Information 62 45 50 54 45Services Group, Inc.All Rights Reserved 07 08 09 10 11 2012 2008 09 10 11 2012 2008 09 10 11 2012isg-one.com *Contracts with TCV > $25M
  13. 13. 13 Americas Contract Award Trends Americas TCV was up 6% Y/Y but down 6% Q/Q. Mega-deals accounted for a substantial share of 2Q12 TCV. Year to date, TCV was flat. Quarterly Americas TCV ($B)* TCV (B) Avg of 4 Prior 2Qs Includes $3.8B of Mega Deal $11.6 $9.2 activity, $8.5 $8.9 $7.8 $8.8 $8.3 with $2.2 out of Brazil in Financial 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Services Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H TCV (B) 2H TCV (B) 1H 2H 1H 2H 172 129 124 $13.4 106 $19.0 $17.7 $19.2 $16.2 180 138 141 126 61 52 © 2012 116 51 59 $26.3 66 $15.3 $15.6 $18.4 $17.1 $17.1 Information 43 51 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 > $25M
  14. 14. 14 Asia-Pacific Contract Award Trends Asia-Pacific TCV was up significantly Q/Q and Y/Y with most TCV awards in Financial Services and Telecom. Year to date, TCV was up 44%. Quarterly Asia-Pacific TCV ($B)* TCV (B) Avg of 4 Prior 2Qs Includes a $4.7 $4.7 $1.2B Mega $2.4 Deal in India $1.8 $1.7 $1.8 $1.4 2Q08 3Q 4Q 1Q 2Q09 3Q 4Q 1Q 2Q10 3Q 4Q 1Q 2Q11 3Q 4Q 1Q 2Q12 Half Year Counts by TCV Bands Half Year TCV ($B)* TCV $25-99M TCV $100M+ 1H TCV (B) 2H TCV (B) 1H 2H 1H 2H $6.6 $5.8 36 $8.0 36 $7.1 $4.9 42 41 53 40 43 18 $5.8 $6.4 $6.5 $3.5 $4.5 © 2012 25 28 13 11 9 $2.8 Information 11 19 8 13 16Services 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 > $25M
  15. 15. Special Topic for Second Quarter 2012
  16. 16. 16 Duration Trend Impact on the 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 $41 B 38% Hypothetical 1H12 TCV with 1999-2000 Durations $57 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 > $25M
  17. 17. 17 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 < $200M TCV > $200M < 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 > $25M
  18. 18. 18 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 > $25M
  19. 19. 19 2Q12 TPI Index Summary and Outlook  Global Broader Market TCV up 7% Y/Y - strengthened by Mega Deals  Asia-Pacific experienced significant Y/Y and Q/Q growth market  New scope TCV was up Y/Y - strengthened on activity outside North summary America and Western Europe  BPO was up both Y/Y and Q/Q, while ITO slipped sequentially  Year to date, TCV was down 8% on weak EMEA results  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 > $25M
  20. 20. 20 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 --- ► Andrew Park ► Rhena Wallace Director, Global Communications & Cohn & Wolfe for ISG Branding, ISG +1 212 798 9832 +1 919 259 9252 rhena.wallace@cohnwolfe.com andrew.park@isg-one.com © 2012 InformationServices Group, Inc.All Rights Reservedisg-one.com www.considerthesourceblog.com *Contracts with TCV > $25M
  21. 21. www.isg-one.com

×