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.

1. The TPI Index
Global Sourcing Market Data and Insights
First Quarter 2012
Hosted by:
Darrin Peller, Barclays Capital
April 12, 2012

2. 2
Welcome to the 38th Quarterly Outsourcing Index Call
Covering the state of the outsourcing industry for global, commercial contracts
with total contract value greater than $25 million.
John Keppel
Partner & President Research & Managed Services
and Chief Marketing Officer, ISG
Duncan Aitchison
Partner & President
North Europe, ISG
Paul Reynolds
Chief Research Officer,
© 2012
ISG Momentum
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > $25M

3. 3
At A Glance
“
GLOBAL BROADER MARKET AWARDS AND TCV DROPPED
ON THE HEELS OF RECORD 2011 RESULTS
RESTRUCTURINGS NOTABLY ↑ Y/Y, WHILE
NEW SCOPE TCV CONTINUES TO DECLINE
EMEA TCV DECLINES ON DEARTH OF LARGE DEALS
AMERICAS TCV ↑ Q/Q
“
STRONG RESULTS INCLUDE THE LONE 1Q11 MEGA DEAL
1Q12 TCV Q/Q 1Q Y/Y 1Q12 Q/Q 1Q Y/Y
Score Card ($B) Change Change Counts Change Change
Global Market $ 18.7 -35% -22% 184 -18% -31%
Mega Deals $ 1.5 -83% -93% 1 -80% -67%
New Scope $ 10.7 -45% -46% 137 -23% -35%
Restructurings $ 8.0 -13% 82% 47 2% -18%
ITO $ 12.6 -37% -20% 120 -22% -29%
BPO $ 6.1 -30% -27% 64 -11% -34%
EMEA $ 8.6 -53% -32% 79 -23% -37%
© 2012
Information Asia Pacific $ 1.8 -33% -36% 18 flat -55%
Services Group, Inc.
All Rights Reserved Americas $ 8.3 8% -3% 87 -16% -14%
ISG-one.com
*Contracts with TCV > $25M

4. 4
Broader Market Contract Award Trends
1Q12 TCV declined a substantial 35% Q/Q and 22% Y/Y, not unexpected after a
strong third and fourth quarter 2011.
Quarterly TCV ($B)* Comparison
↓35%
$28.1 $24.8 $24.0 $27.1 $28.7
$21.7 $18.4 $19.6 $18.7
1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
The TCV Hangover Effect - Previous Quarterly Precedence
2 Prior 2 Prior
Qtrs Avg Qtrs Avg
$28.5 $29.9
↓40% ↓27%
$28.1 $29.0 $31.6 $28.1
$17.2 $21.7
© 2012
Information
Services Group, Inc.
All Rights Reserved
4Q05 1Q06 2Q06 4Q09 1Q10 2Q10
ISG-one.com
*Contracts with TCV > $25M

5. 5
Broader Market Mega Deals & Relationships Trends
Only one was signed in 1Q, an ITO mega deal in the Americas valued at $1.5B.
1Q12 Mega Relationship counts were the 3rd highest in three years.
Mega Deal TCV ($B)* Comparison
TCV (B) Counts
5
4
3
2
$8.8 1
$7.1
$4.1
$2.0 $1.5
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Mega Relationship ACV ($B)* Comparison
ACV (B) Counts
11 75% of 1Q Mega
7 7 Relationships are
6
3 $1.8
Restructurings
$1.6
$0.9 $0.9
$0.5
© 2012
Information 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > $25M

6. 6
Broader Market New Scope & Restructuring Trends
While down 13% Q/Q, 1Q12 Restructuring TCV almost doubled Y/Y. New Scope
was off by nearly 50% Q/Q and Y/Y.
New Scope vs. Restructuring Quarterly TCV ($B)* Comparison
New Scope Restructured
$19.6 $19.5
$16.4 $17.2
$10.7
$11.0
$9.2 $8.0
$3.8 $4.4
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope vs. Restructuring TTM TCV ($B)* Comparison
New Scope TCV Restructuring TCV
2Q11-1Q12 $58 $36
2Q10-1Q11 $65 $24
66% of Large Deals
($100M - $999M TCV)
2Q09-1Q10 $74 $27 have been Restructurings
© 2012
Information
2Q08-1Q09 $66 $22 in the past 3 quarters
Services Group, Inc. 2Q07-1Q08 $14
All Rights Reserved
$71
ISG-one.com
*Contracts with TCV > $25M

7. 7
ITO Contract Award Trends
ITO experienced Q/Q decreases of 22% in counts and 37% in TCV. ITO mirrors the
Broader Market pattern of a ‘hangover’ quarter following two robust quarters.
Quarterly TCV ($B)* Comparison Top ITO Providers
$22.2
$20.0
by TTM TCV
$15.6
$13.0 $12.6 New Scope Restructuring
Accenture Atos
BT BT
Capgemini CGI
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12 Cognizant CSC
CSC Dell
Dell HCL
New Scope vs. Restructuring TTM TCV ($B)* Fujitsu HP
New Scope TCV Restructuring TCV HCL IBM
HP Infosys
2Q11-1Q12 $37.8 $26.2 IBM Xerox
2Q10-1Q11 $47.0 $17.8 Infosys
TCS
2Q09-1Q10 $55.1 $20.8 Telstra
2Q08-1Q09 $39.9 $16.4 T-Systems
© 2012
2Q07-1Q08
Xerox
Information $45.3 $10.1
Services Group, Inc.
All 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.
*Contracts with TCV > $25M

8. 8
BPO Contract Award Trends
BPO experienced Q/Q decreases of 10% in counts and 30% in TCV. The Q/Q
comparison is tough against the strong 2011, the result of Mega Deal activity.
Quarterly TCV ($B)* Comparison
$8.3 $8.7 Top BPO Providers
$7.2 by TTM TCV
$5.9 $6.1
Accenture
Capgemini
Capita
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12 Carillion
Cognizant
Genpact
New Scope vs. Restructuring TTM TCV ($B)* HCL
IBM
New Scope TCV Restructuring TCV Infosys
2Q11-1Q12 $20.3 $9.8 Logica
RR Donnelly
2Q10-1Q11 $17.9 $6.2 Sabre
2Q09-1Q10 $18.9 $6.6 TCS
Xchanging
2Q08-1Q09 $26.5 $5.7
Xerox
© 2012 2Q07-1Q08 $25.5 $3.9
Information
Services Group, Inc.
All 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.
*Contracts with TCV > $25M

9. 9
EMEA Contract Award Trends
1Q12 TCV was down 53% Q/Q and 32% Y/Y. The ‘hangover’ effect and,
potentially, Eurozone financial concerns impacted results.
Quarterly TCV ($B)* Comparison
$18.3
$12.2 $12.7
$9.2 $8.6
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope Quarterly TCV ($B)* Comparison Comparison
vs. Restructuring TTM TCV ($B)*
New Scope TCV Restructuring TCV
2Q11-1Q12 $31.7 $21.3
2Q10-1Q11 $32.6 $11.9
2Q09-1Q10 $38.5 $8.8
© 2012 2Q08-1Q09 $31.3 $12.1
Information
Services Group, Inc.
All Rights Reserved
2Q07-1Q08 $39.2 $4.7
ISG-one.com
*Contracts with TCV > $25M

10. 10
Asia Pacific Contract Award Trends
AP contracting counts were flat Q/Q. However, TCV was down by one-third both
Q/Q and Y/Y, ending up well below the recent first-quarter average.
Quarterly TCV ($B)* Comparison
$2.8 $2.7
$1.6 $1.8
$1.4
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope vs. Restructuring TTM TCV ($B)* Comparison
New Scope TCV Restructuring TCV
2Q11-1Q12 $5.6 $2.7
2Q10-1Q11 $8.8 $2.5
2Q09-1Q10 $9.0 $3.2
© 2012 2Q08-1Q09 $9.8 $1.3
Information
Services Group, Inc. 2Q07-1Q08
All Rights Reserved
$7.6 $1.6
ISG-one.com
*Contracts with TCV > $25M

11. 11
Americas Contract Award Trends
Americas TCV rose 8% Q/Q, making it one of the three highest quarters since the
beginning of 2010. Americas posted the only 1Q12 Mega Deal.
Quarterly TCV ($B)* Comparison
$14.6
$9.4 $8.5 $7.7 $8.3
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope vs. Restructuring TTM TCV ($B)* Comparison
New Scope TCV Restructuring TCV
2Q11-1Q12 $20.7 $12.1
2Q10-1Q11 $23.5 $9.6
2Q09-1Q10 $26.5 $15.4
© 2012 2Q08-1Q09 $25.2 $8.6
Information
Services Group, Inc.
All Rights Reserved 2Q07-1Q08 $24.0 $7.7
ISG-one.com
*Contracts with TCV > $25M

12. 12
Special Topic for First Quarter 2012
Paul Reynolds
Chief Research Officer,
ISG Momentum

13. 13
Anticipating Increased Restructuring Volume
Contract expirations are occurring at a faster rate as the result of dramatically
increased transaction counts and declining average contract durations.
Trends Impacting Restructuring Volumes
↑ 250% 933 Contract Awards
6
5 Average Duration
377 ↓ 1 Yr.
2002 2011
Record Levels of Expiring Contracts
↑ 20% Y/Y
690
570
310
© 2012
Information
Services Group, Inc.
All Rights Reserved
2007 2011 2012e
ISG-one.com
*Contracts with TCV > $25M

14. 14
Motivations Behind Preemptive Renegotiation Efforts
Contract renegotiations can be driven by either the client or the service provider,
but the leverage is, more often than not, with the Client.
Client Motivations Provider Motivations
Increase Scope or Service Levels   Chance for Sole Sourced Renewal
Reduce Price for Existing Scope   Retain Full Scope
Add Emerging Services   Introduce New Services
© 2012
Information
Restructuring creates the opportunity for Best-of-Breed providers to win
Services Group, Inc.
All Rights Reserved new clients looking for targeted solutions
ISG-one.com
*Contracts with TCV > $25M

15. 15
Who will win these restructurings?
Applying the 80/80 rule: 80% of the time a deal is renegotiated with the
incumbent provider, and they typically retain about 80% of the scope.
2012 Restructuring
by Provider Share of ACV
37%
32%
18%
13%
Americas-heritage Niche Providers India-heritage Major European
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > $25M

16. 16
1Q12 TPI Index Summary and Outlook
 Global Broader Market ↓1Q12 loses momentum after two
quarters of impressive growth
 Restructuring TCV ↑ Q/Q, not enough to make up for New
Scope declines
market
summary  Short fall in previously robust EMEA TCV had the greatest
impact on the market
 ITO and BPO ↓ Q/Q in contract number and TCV
 New Scope ITO ↓, but New Scope BPO ↑ in the last Trailing
Twelve Months
market  Look for a soft first half 2012 and a reviving second half
outlook  Restructuring 2H12 activity may lead an upswing in the
overall market
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > $25M

17. 17
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
► Paul Reynolds
Chief Research Officer,
ISG Momentum
+1 508 625 2194
paul.reynolds@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
© 2012
Information andrew.park@isg-one.com
Services Group, Inc.
All Rights Reserved
ISG-one.com www.considerthesourceblog.com
*Contracts with TCV > $25M

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