The ISG Outsourcing Index, EMEA Market Data and Insights, First Quarter 2015,

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Hosted by:
James Goodman
Barclays Capital
20th April 2015
The ISG Outsourcing Index™
First Quarter 2015
EMEA Market Data and Insights

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Covering the state of the outsourcing industry for EMEA commercial contracts.*
Welcome to the 50th Quarterly ISG Outsourcing Index™ Review
Bernd Schaefer
Partner
John Keppel
Partner & President
Dr. David Howie
Partner
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At a Glance
GLOBAL MARKET ACV COMES IN LIGHTER
DOWN 18% Y/Y AS MID-SIZE AND LARGER AWARDS FALL SHORT
WEAKNESS SPREAD BETWEEN NEW SCOPE AND RESTRUCTURING AWARDS
AMERICAS ACV UP 10% Y/Y WITH BPO, ENERGY,
HEALTHCARE AND PHARMA SECTORS PARTICULARLY ACTIVE
EMEA ACV DOWN 26% Y/Y; DESPITE A STRONG SHOWING IN FINANCIAL SERVICES AND IN THE DACH
MARKET; SLOWING IN THE UK, NORDICS AND FRANCE TURNED OVERALL RESULTS NEGATIVE
ASIA PACIFIC ACV DOWN 45% Y/Y; INDIA STEPS UP ITS
CONTRACTING PACE WHILE ANZ REMAINED SLUGGISH
Scorecard 1Q15 1Q Y/Y 1Q Q/Q 1Q15 1Q Y/Y 1Q Q/Q
ACV (€B)* Change Change Counts Change Change
Global Market € 4.1 -18% -22% 305 -7% -16%
New Scope € 2.5 -19% -7% 213 0% -11%
Restructurings € 1.6 -16% -39% 92 -20% -26%
Mega-relationships € 1.0 -32% -34% 8 -27% -11%
ITO € 2.8 -27% -26% 201 -16% -21%
BPO € 1.3 13% -12% 104 18% -4%
Americas € 1.8 10% -13% 143 27% -8%
EMEA € 1.9 -26% -29% 128 -24% -23%
Asia Pacific € 0.4 -45% -19% 34 -24% -15%

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As we forecast last quarter, 1Q15 Global ACV declines, down 18% Y/Y, as midsize
and larger awards fall short.
Global Market Quarterly ACV (€B)*
Global Market Quarterly Contract Counts
Global Market Contract Award Trends
$4.1
$5.2$4.9$4.8
$5.6
$4.8
1Q151Q141Q131Q121Q11
305
363
327308
360379
1Q151Q141Q131Q121Q11
-
50
100
150
200
250
300
350
400

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EMEA ACV in 1Q15 falls 26% Y/Y as the region sees decreases in both Restructuring
and New Scope awards. ITO ACV accentuates the decline, shrinking 36% Y/Y.
EMEA Quarterly Counts
EMEA Contract Award Trends
EMEA Quarterly ACV (€B)*
Like-Quarter Segment Details ACV (€B)*EMEA Trailing 12 Months ACV (€B)*
128
169
143
153
181
1Q151Q141Q131Q121Q11
-
40
80
120
160
200
€ 1.9
€ 2.6
€ 2.2
€ 2.7
€ 2.5
1Q151Q141Q131Q121Q11
€ 0.0
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
€ 3.0
€ 3.5
€ 4.0
€ 9.3€ 9.7€ 9.3
€ 11.4
€ 9.3
569
629
541
593
553
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
ACV Counts
€ 1.4
€ 0.5
€ 1.4
€ 0.5
€ -
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q14 1Q15

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€ 0.60
€ 0.08
€ 0.52
€ 0.15
€ 0.40
€ 0.04
€ 0.13
€ 0.02€ 0.00
€ 0.20
€ 0.40
€ 0.60
€ 0.80
€ 1.00
€ 1.20
€ 1.40
U.K. & Ireland Nordics DACH France Benelux Southern
Europe
Africa & Middle
East
E. Europe &
Russia
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15
€ 0.99
€ 0.25
€ 0.15 € 0.12 € 0.16
€ 0.03 € 0.01
€ 0.13 € 0.10
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
Financial
Services
Travel
Transport
Leisure
Manufacturing Telecom
& Media
Energy Business
Services
Consumer
Products
& Goods
Retail Healthcare
& Pharma
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15
Despite a strong showing in Financial Services and in the DACH market, slowing in
the U.K. & Nordics plus a difficult compare in France pull down the market.
EMEA Sub-regions Like-Quarter ACV (€B)*
EMEA Industry Like-Quarter ACV (€B)*
EMEA Contract Award Trends Detail

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Co. Revenues < $2 BCo. Revenues $2 -10 B
ISG Sourcing Market Standouts in EMEA
Large multinationals and providers with strong local “home market” profiles head
up each of the service provider segments.
Placements based on ACV of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.
Service providers in alphabetical order; no rankings implied.
Revenues sourced from Hoovers and individual company financial fillings
Co. Revenues > $10B
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
Cognizant
Capita
CGI
EVRY
HCL
Infosys
MITIE
Serco
Tieto
Wipro
Accenture
Atos
Balfour Beatty
BT
Capgemini
Fujitsu
HP
IBM
TCS
T-Systems
Endava
HH Global
IGATE
InnerWorkings
Kuehne & Nagel
Luxoft
MAYKOR
Mindtree
NNIT A/S
Xchanging
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts

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1Q15 Americas ACV is up 10% Y/Y with first quarter counts up 27% Y/Y. BPO ACV, up
7% Y/Y, has its best quarter in two years.
Americas Quarterly Counts
Americas Contract Award Trends
Americas Quarterly ACV (€B)*
Like-Quarter Segment Details ACV (€B)*Americas Trailing 12 Months ACV (€B)*
143
113131
174
146
1Q151Q141Q131Q121Q11
-
50
100
150
200
€ 1.8
€ 1.5
€ 2.1
€ 2.4
€ 1.7
1Q151Q141Q131Q121Q11
€ 0.0
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
€ 3.0
€ 7.3
€ 5.2
€ 7.0€ 7.5
€ 6.6
585
454470
555
457
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
ACV Counts
€ 0.8
€ 1.0
€ 1.0
€ 0.8
€ 0.5
€ 0.7
€ 0.9
€ 1.1
€ 1.3
€ 1.5
€ 1.7
€ 1.9
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q14 1Q15

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1Q15 ACV increases due to strength in the major markets of U.S. and Canada.
Healthcare & Pharmaceutical and Energy sectors are particularly active.
Americas Sub-regions Like-Quarter ACV (€B)*
Americas Industry Like-Quarter ACV (€B)*
Americas Contract Award Trends Detail
€ 0.27 € 0.30
€ 0.19
€ 0.32
€ 0.11 € 0.09
€ 0.25
€ 0.05
€ 0.10
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
Manufacturing Financial
Services
Telecom
& Media
Healthcare
& Pharma
Business
Services
Retail Energy Consumer
Products
& Goods
Travel
Transport
Leisure
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15
€ 0.18
€ 0.01 € 0.00
€ 0.02
€ 0.00
€ 0.05
€ 0.10
€ 0.15
€ 0.20
€ 0.25
Canada Brazil Mexico Other LatAm
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15
€ 1.47
€ -
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
U.S.

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Co. Revenues < $2 BCo. Revenues $2 -10 B
ISG Sourcing Market Standouts in the Americas
Providers with substantial offshore profiles led in the Building tier. Several contact
centre firms are now positioned in the Breakthrough 10.
Placements based on ACV of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.
Service providers in alphabetical order; no rankings implied.
Revenues sourced from Hoovers and individual company financial fillings
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
Aon Hewitt
CBRE
CGI
Cognizant
CompuCom
Genpact
HCL
Infosys
Teleperformance
Wipro
Accenture
Atos
BT
Capgemini
Dell
IBM
RR Donnelley
State Street
TCS
Xerox
Alorica
APAC Customer Services
EXL
Firstsource Solutions
ICF International
IGATE
KPIT Technologies
Luxoft
Syntel
TeleTech
The Big 10
Sourcing Standouts
Co. Revenues > $10B
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE

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€ 0.33
€ 0.10
€ 0.40
€ 0.03€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q14 1Q15
Asia Pacific 1Q15 ACV is down 45% Y/Y versus a robust quarter a year ago. Contract
counts are down 24% Y/Y yet are in line with 1Q12 and 1Q13.
Asia Pacific Quarterly Counts
Asia Pacific Contract Award Trends
Asia Pacific Quarterly ACV (€B)*
Like-Quarter Segment Details ACV (€B)*Asia Pacific Trailing 12 Months ACV (€B)*
34
45
34
33
52
1Q151Q141Q131Q121Q11
-
10
20
30
40
50
60
€ 0.43
€ 0.78
€ 0.44€ 0.43
€ 0.58
1Q151Q141Q131Q121Q11
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
€ 2.1€ 2.0
€ 2.8
€ 1.7
€ 2.2
139141
169
135
166
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
ACV Counts

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€ 0.14
€ 0.02
€ 0.08
€ 0.10
€ 0.05
€ 0.00
€ 0.02 € 0.03
€ 0.00€ 0.00
€ 0.05
€ 0.10
€ 0.15
€ 0.20
€ 0.25
€ 0.30
Financial
Services
Manufacturing Telecom
& Media
Travel
Transport
Leisure
Energy Business
Services
Consumer
Products
& Goods
Retail Healthcare
& Pharma
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15
India steps up its contracting pace. However, ANZ remains sluggish, holding back
overall regional results.
Asia Pacific Sub-regions Like-Quarter ACV (€B)*
Asia Pacific Industry Like-Quarter ACV (€B)*
Asia Pacific Contract Award Trends Detail
€ 0.02
€ 0.24
€ 0.08
€ 0.06
€ 0.01 € 0.02€ 0.00
€ 0.05
€ 0.10
€ 0.15
€ 0.20
€ 0.25
€ 0.30
ANZ India and South
Asia
Japan Greater China Southeast Asia South Korea
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q14 1Q15

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Co. Revenues < $2 BCo. Revenues $2 -10 B
ISG Sourcing Market Standouts in Asia Pacific
Several Japanese providers joined the large multinationals in the Big 10 Sourcing
Standouts list. Australian and India-based providers contributed greatly to the two
smaller tiers.
Placements based on ACV of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.
Service providers in alphabetical order; no rankings implied.
Revenues sourced from Hoovers and individual company financial fillings
Co. Revenues > $10B
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
Cognizant
HCL
Infosys
NEC
Orange Business Services
Tech Mahindra
Transfield Services
Unisys
United Group Services
Wipro
Accenture
BT
Fujitsu
HP
Hitachi
IBM
NTT Data
Ricoh
TCS
Ericsson
Aegis Limited
ChinaSoft
Hollysys Automation
Itron
Kratos Defense & Security
NGA Human Resources
Ramco
SITA
Vertex Group
WNS
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts

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Relative to the Commercial Sector, Public Sector ACV grows in the past five years.
Most ACV is generated by ITO awards, with BPO ACV varying by geography.
Public Sector Trailing 12 Months Counts
Global Public Sector Award Trends
Public Sector Trailing 12 Months ACV (€B)*
Public Sector ITO vs. BPO TTM ACV (€B)* Public Sector Regional ITO vs. BPO % TTM ACV
1,293
1,224
1,1801,2831,176 1,400
1,188
978891876
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
Commercial Sector Public Sector
88%
36%
91%
38%
12%
64%
9%
62%
U.S. & Canada U.K. Continental
Europe
Australia
ITO BPO
€ 28.7
€ 24.0
€ 16.7
€ 14.4
€ 16.5
€ 9.1€ 7.1€ 5.5€ 5.7€ 5.5
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
Public Sector ITO ACV Public Sector BPO ACV
$18.7
$37.8
$31.1
$22.1$20.1$22.1
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
Commercial Sector Public Sector

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North America, led by Defence and Healthcare spending, account for a large share
of sourcing. Average ACV remains steady while durations fall.
Share of Public Sector ACV for Trailing 12 Months Top Public Sector Providers
in Recent 12 Months*
Global Public Sector Award Trends Continued
67%
17%
7% 6% 2%
U.S. &
Canada
U.K. Continental
Europe
Australia Other
Global Average Deal Size and Duration Compare
3.814.15
3.12
4.36
*Service providers in alphabetical order; no rankings implied.
Placements based on counts of public sector contract awards sourced from ISG Contracts Knowledgebase ®.
Accenture
BT
Capita
Carillion
CGI
CSC
HP
Accenture
Atea
Atos
Capgemini
CGI
HP
IBM
Indra Sistemas
Serco
Accenture
Boeing
Fujitsu
Harris Corp.
IBM
NEC Corp.
Serco
Avg. Duration in Yrs.
Avg. Contract Value (€K)
U.S. & Canada Asia Pacific
U.K. Continental Europe
General Dynamics
L-3 Communications
Leidos Holdings
Lockheed Martin
Northrop Grumman
Raytheon
Science Applications
€ 14.4€ 15.4
€ 27.0€ 25.2
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
2Q10 -
1Q11
Commercial Sector Public Sector

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Special Topic for First Quarter 2015
THE COMPOUNDED IMPACT OF AUTOMATION, ROBOTICS AND CLOUD –
THE ARC HEIGHTENS SOURCING PRICE WARS
John Keppel
Partner & President

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The ARC Effect Accelerates and Broadens Pricing Changes
Automation, Robotics and Cloud (ARC) impact the managed service marketplace
more rapidly and broadly than anticipated. Clients look to benchmarking to take
advantage.
obotics
utomation
Most Recent
loud ?
SaaSPaaS
IaaS
A Buyer’s Market
reveals price declines
more than 20% in
some cases
Stirring
Up the
Status Quo

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Providers Adjust – Talk of New Service Investments Abound
Providers are trying to leverage what they have, protect existing revenues and
invent their future businesses all at the same time – a significant challenge.
ARC leads to
supplant
on-premises,
fixed-pricing
models
Not just short-term
contracts, but effectively
pay-as-you-go models
to ensure flexibility
$4
$1
revenue is
replaced with
only $1
of cloud-based
revenue
?
$3 to $4 dollars in
hardware/software
Significant
Provider Challenge

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As we forecast, Global Market ACV fell short Y/Y even as smaller deal flow
remained constant
Americas results stayed consistent as the U.S. and Canada and several
industries (Energy and Healthcare/Pharmaceuticals) saw stepped-up activity
EMEA and Asia-Pacific fell back Y/Y as they struggled with difficult
comparisons against a more robust quarter a year ago
Positive results in selected geographic markets like India and DACH and
Financial Services in Europe were not enough to counterbalance declines in
larger, more established sourcing markets like the U.K. and ANZ
We expect a difficult comparison in 2Q15 as markets such as France and Japan
have tough targets to match
ACV should remain muted through the first half but we expect will turn more
positive in 2H15 – especially with strength in verticals like Energy and
Transportation, coupled with solid results in the larger sourcing markets like
the U.S. and DACH
1Q15 ISG Outsourcing Index™ - Global Summary and Outlook
summary
market
outlook
market

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Please contact us with your questions and comments.
Learn More
Paul Reynolds
Partner
+1 508 625 2194
paul.reynolds@isg-one.com
ISG insights serving providers and market analysts
www.isg-one.com
Dr. David Howie
Partner
+44 7789 771 665
david.howie@isg-one.com
Denise Colgan
EMEA and AP Media Contact
+44 1737 371523
denise.colgan@isg-one.com
Rob Arnott
Cohn & Wolfe for ISG
+44 (0) 20 7331 5363
robert.arnott@cohnwolfe.com

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First Quarter 2015
APPENDIX: SCORE CARD FOR TCV

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The ISG Outsourcing Index has moved to ACV as the primary measure of the
Broader Market. We will continue to provide a high-level TCV view of the market via
a Scorecard analysis.
First Quarter 2015 TCV Scorecard
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Scorecard
1Q15 1Q Y/Y 1Q Q/Q 1Q15 1Q Y/Y 1Q Q/Q
TCV (€B)* Change Change Counts Change Change
Global Market € 17.9 -17% -25% 305 -7% -16%
New Scope € 12.8 -8% 13% 213 0% -11%
Restructurings € 5.1 -32% -60% 92 -20% -26%
Mega-deals € 3.5 40% -61% 8 -27% -11%
ITO € 13.4 -14% -23% 201 -16% -21%
BPO € 4.5 -23% -32% 104 18% -4%
Americas € 5.6 -14% -29% 143 27% -8%
EMEA € 10.1 -10% -26% 128 -24% -23%
Asia Pacific € 2.2 -42% -11% 34 -24% -15%

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