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The EMEA ISG Outsourcing Index 
Market Data and Insights 
Third Quarter 2014 
Hosted by: 
James Goodman 
Barclays Capital 
16 October 2014
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isg-one.com 
Welcome to the 48th Quarterly Outsourcing Index Review 
John Keppel 
Partner & President 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
2 
Covering the state of the outsourcing industry for global and EMEA commercial 
contracts.* 
Dr. David Howie 
Partner 
Bernd Schaefer 
Partner
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
3 
At a Glance 
AS ISG PREDICTED, LIGHTER CONTRACTING ACTIVITY 
DROVE GLOBAL BROADER MARKET ACV DOWN Y/Y 
ITO AND BPO BOTH DECLINED BY DOUBLE DIGITS; 
YTD, ITO REMAINS IN POSITIVE TERRITORY WHILE BPO CONTINUES TO PRODUCE UNEVEN RESULTS 
EMEA PERFORMANCE WEAKER WITH DACH AND NORDICS SLIDING; 
YTD, ACV SHOULD SURPASS 2013 WITH STRENGTH IN FRANCE AND SOUTHERN EUROPE 
AMERICAS RESULTS TREND UPWARD Y/Y, 
LARGE-DEAL ACTIVITY IN CANADA AND BRAZIL OFFSET FLAT U.S. PERFORMANCE 
ASIA PACIFIC'S QUARTERLY PACE SLOWED BY ABSENCE OF LARGE DEALS 
Scorecard 3Q14 3Q Y/Y 3Q Q/Q YTD YTD Y/Y 
ACV (€B)* Change Change ACV (€B)* Change 
Global Market € 3.7 -21% -28% € 13.7 13% 
New Scope € 2.4 -10% -27% € 8.7 22% 
Restructurings € 1.3 -36% -31% € 5.0 0% 
Mega-relationships € 1.0 2% -21% € 3.8 23% 
ITO € 2.7 -23% -31% € 10.4 22% 
BPO € 1.0 -17% -18% € 3.3 -9% 
Americas € 1.5 11% -17% € 4.9 18% 
EMEA € 1.9 -36% -26% € 7.0 3% 
Asia Pacific € 0.3 -27% -64% € 1.8 59%
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Global Market Contract Award Trends 
€ 5.7 € 4.3 € 4.5 
€ 4.5 
€ 4.9 
€ 3.5 
€ 3.9 € 5.7 
€ 3.6 € 3.4 
€ 3.6 € 4.9 
€ 4.4 
€ 3.1 € 2.3 € 2.5 
€ 8.8 € 8.2 € 10.0 € 8.1 € 10.0 € 7.4 € 7.1 € 7.0 
2005 06 07 08 09 10 11 12 13 2014 
1H Counts 3Q Counts 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
4 
Global Broader Market Quarterly ACV is down 21% Y/Y on slower contracting 
activity. YTD, ACV is still at the second-highest level ever, up 13% against 2013. 
Year-to-date Broader Market (€B)* 
Year-to-date Contracting Counts 
€ 3.7 
€ 10.0 
660 
€ 3.7 
€ 4.7 
€ 7.4 
511 
631 631 528 
518 
329 332 343 408 
239 
352 
295 252 
221 235 
227 
142 141 163 
€ 20 
€ 15 
€ 10 
€ 5 
1,000 
750 
500 
250 
- 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV 4Q ACV
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Global ITO and BPO Contract Award Trends 
€ 12 
€ 10 
€ 8 
€ 6 
€ 4 
€ 2 
700 
600 
500 
400 
300 
200 
100 
1H Counts 3Q Counts 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
5 
Both ITO and BPO quarterly ACV down Y/Y. Year-to-date, ITO ACV stands at all-time 
high while BPO ACV has trended lower, down 9% from 2013. 
BPO Year-to-date ACV (€B)* 
ITO Year-to-date ACV (€B)* 
BPO ITO Year-to-date Counts Year-to-date Counts 
484 
327 
400 396 336 
364 
228 271 224 202 
173 
185 161 248 
146 139 
140 
108 
81 
92 
- 
2005 06 07 08 09 10 11 12 13 2014 
184 176 
1H Counts 3Q Counts 
231 235 192 
130 115 137 154 105 
66 
104 
110 91 
96 
87 75 
60 55 
50 
€ 6 
€ 4 
€ 2 
400 
300 
200 
100 
- 
2005 06 07 08 09 10 11 12 13 2014 
€ 7.7 
€ 5.0 
€ 5.4 € 6.2 
€ 7.6 
€ 6.3 € 5.9 
€ 5.4 € 5.3 € 5.0 
€ 2.7 
€ 3.5 
€ 2.9 
€ 3.5 
€ 2.5 
€ 2.5 € 2.5 
€ 1.4 € 1.7 € 2.2 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV 
€ 2.4 € 2.3 
€ 3.7 
€ 2.6 € 2.3 € 2.4 € 2.8 € 2.0 € 1.9 € 1.9 
€ 1.2 € 1.0 
€ 1.6 
€ 1.3 
€ 0.9 € 1.0 
€ 1.1 
€ 0.9 € 0.8 € 0.8 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV
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500 
400 
300 
200 
100 
1H Counts 3Q Counts 
€ 5.0 
€ 4.5 
€ 4.0 
€ 3.5 
€ 3.0 
€ 2.5 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
6 
EMEA quarterly ACV is down 36% Y/Y as the number of awards drop markedly. 
Year-to-date, ACV is up slightly at 3% on the strength in ITO. 
EMEA Year-to-date ACV (€B)* 
€ 12 
€ 10 
€ 8 
€ 6 
€ 4 
€ 2 
EMEA YTD New vs. Restructuring ACV (€B)* 
EMEA Contract Award Trends 
EMEA Year-to-date Counts 
316 
298 275 257 
225 
198 237 173 140 159 
115 
110 176 
144 
106 110 
116 
76 77 
66 
- 
2005 06 07 08 09 10 11 12 13 2014 
€ 5.1 
€ 4.8 € 4.3 € 4.4 € 3.9 
€ 3.7 
€ 5.8 
€ 2.7 € 3.3 
€ 4.0 
€ 1.9 
€ 1.6 € 2.9 € 2.4 € 2.9 
€ 1.4 
€ 2.0 
€ 1.4 
€ 1.2 
€ 1.4 
€ 2.3 € 2.1 
€ 3.4 
€ 2.8 
€ 3.3 
€ 1.8 
€ 2.0 
€ 1.9 
€ 2.2 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV 4Q ACV 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 4.3 
€ 2.7 
€ 2.0 
New Scope Restructuring
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EMEA Contract Award Trends Detail 
France and Southern Europe help support year-to-date gains in EMEA while the 
more mature markets of the U.K., DACH and the Nordics pull back from 2013. 
€3.5 
€3.0 
€2.5 
€2.0 
€1.5 
€1.0 
€0.5 
EMEA Sub-regions Year-to-date ACV (€B)* EMEA Industries YTD ACV (€B)* 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
7 
€ 2.2 
€ 1.2 
€ 1.1 
€ 0.3 
€ 1.1 
€ 0.7 
€ 0.3 
€ 0.2 
€- 
U.K. & 
Ireland 
DACH Nordics Benelux France Southern 
Europe 
Africa & 
Middle 
East 
E. Europe 
& Russia 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
Avg of Prior 4 YTDs YTD 3Q14 
€ 1.3 
€ 1.5 
€ 1.2 
€ 1.2 
€ 0.8 
€ 0.4 
€ 0.2 
€ 0.3 
€ 0.2 
€ - € 0.5 € 1.0 € 1.5 € 2.0 
Financial Services 
Manufacturing 
Travel, Transport & 
Leisure 
Energy 
Telecom & Media 
Business Services 
Retail 
Consumer Products 
& Goods 
Healthcare & 
Pharma
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EMEA ITO Contract Award Trends 
1H Counts 3Q Counts 
€ 4.0 
€ 3.5 
€ 3.0 
€ 2.5 
€ 2.0 
€ 1.5 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
8 
ITO contract numbers in EMEA hit an all-time high year-to-date, while ACV reached 
its second highest level ever, despite a slowdown in the third quarter 
EMEA ITO Year-to-date ACV (€B)* 
€ 4.2 
€ 3.1 € 2.7 € 2.8 
€ 10 
€ 8 
€ 6 
€ 4 
€ 2 
EMEA ITO YTD New vs. Restructuring ACV * 
EMEA ITO Year-to-date Counts 
243 
214 187 166 
187 165 156 
122 
87 
129 
95 
78 124 
103 
77 
82 
78 
51 
42 
49 
2005 06 07 08 09 10 11 12 13 2014 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 3.5 
€ 2.4 
€ 1.0 
New Scope Restructuring 
€ 4.1 
€ 3.1 
€ 4.6 
€ 1.8 € 2.7 
€ 3.3 
€ 1.7 
€ 1.7 € 2.4 
€ 1.2 € 2.4 
€ 1.2 
€ 1.5 
€ 1.0 
€ 0.7 
€ 1.2 
€ 1.6 
€ 1.4 
€ 2.5 € 2.7 
€ 2.5 
€ 1.5 
€ 1.1 
€ 1.5 
€ 1.5 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV 4Q ACV
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EMEA BPO Contract Award Trends 
€ 2.0 
€ 1.5 
€ 1.0 
€ 0.5 
1H Counts 3Q Counts 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
9 
Year to date, BPO ACV and counts fell more than a third, driven by a lack of 
contracting activity by the Financial Services sector 
EMEA BPO Year-to-date ACV (€B)* 
€ 1.1 € 0.9 
€ 1.7 
€ 1.2 
€ 4.0 
€ 3.0 
€ 2.0 
€ 1.0 
EMEA BPO YTD New vs. Restructuring ACV* 
EMEA BPO Year-to-date Counts 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 0.9 
€ 0.2 
€ 0.0 
New Scope Restructuring 
€ 0.6 € 0.8 
€ 1.2 
€ 0.7 € 0.8 € 0.6 
€ 0.6 € 0.2 
€ 0.7 
€ 0.5 
€ 0.4 
€ 0.2 
€ 0.5 
€ 0.4 
€ 0.5 
€ 0.2 
€ 0.4 
€ 0.9 
€ 0.7 
€ 0.8 € 0.3 
€ 0.3 
€ 0.4 € 0.9 
€ 0.7 
2005 06 07 08 09 10 11 12 13 2014 
€ 0.0 
1H ACV 3Q ACV 4Q ACV 
73 
88 91 
84 
60 
37 42 50 
44 53 
20 
52 
41 32 
33 
38 24 
26 
34 
17 
2005 06 07 08 09 10 11 12 13 2014
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ISG Sourcing Market Standouts in EMEA 
Large multinationals and providers with strong local “home market” profiles head 
up both the Big 10 and Building 10 tiers. 
SOURCING 
STANDOUTS BY COMPANY SIZE 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
10 
Co. Revenues €2 -10 B Co. Revenues < €2 B 
Co. Revenues > €10B 
Capita 
Carillion1 
Cognizant1 
EVRY 
HCL1 
Infosys1 
Mitie Group 
Orange Business Services 
Tech Mahindra 
Tieto 
Accenture1 
Atos1 
BT1 
Capgemini1 
CSC 
Fujitsu 
HP 
IBM1 
TCS1 
T-Systems 
HH Global 
iGATE 
Innovation Group 
Kelway 
MAYKOR 
NGA Human Resources 
NNIT A/S 
Quindell 
Sitel 
The Building 10 
Sourcing Standouts 
The Breakthrough 10 
Sourcing Standouts 
The Big 10 
Sourcing Standouts
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Americas quarterly ACV was up 11% Y/Y even as the number of contract awards fell 
back. Year-to-date, ACV is up 18% from 2013 with New Scope ACV growing 30%. 
Americas Year-to-date ACV (€B)* 
€ 8 
€ 6 
€ 4 
€ 2 
Americas YTD Segment Details ACV (€B)* 
€ 5 
€ 4 
€ 3 
€ 2 
€ 1 
500 
400 
300 
200 
100 
1H Counts 3Q Counts 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
11 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 3.1 
€ 1.8 
€ 2.9 
€ 2.0 
€ 0 
New Scope Restructuring ITO BPO 
Americas Contract Award Trends 
Americas Year-to-date Counts 
265 
195 
278 
239 259 
219 
130 149 142 168 
97 
137 
119 104 
101 
83 
84 
57 49 61 
- 
2005 06 07 08 09 10 11 12 13 2014 
€ 2.8 € 3.4 
€ 4.0 
€ 3.0 
€ 4.5 
€ 3.4 
€ 2.8 € 2.5 
€ 3.0 € 3.7 
€ 1.5 
€ 1.4 
€ 1.5 
€ 1.6 
€ 1.6 
€ 1.5 
€ 0.7 € 1.1 
€ 1.5 € 0.9 
€ 1.2 
€ 1.5 
€ 1.9 
€ 0.9 
€ 1.9 
€ 2.2 € 1.4 
€ 1.6 € 1.4 
2005 06 07 08 09 10 11 12 13 2014 
€ 0 
1H ACV 3Q ACV 4Q ACV
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Americas Contract Award Trends Detail 
Year-to-date, U.S. ACV has risen 17% against 2013. Both Canada and Brazil ACV 
have advanced as a result of some larger contract awards. 
Americas Sub-regions Year-to-date ACV (€B)* 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 0.45 
€ 0.40 
€ 0.35 
€ 0.30 
€ 0.25 
€ 0.20 
€ 0.15 
€ 0.10 
€ 0.05 
€ 6.0 
€ 5.5 
€ 5.0 
€ 4.5 
€ 4.0 
€ 3.5 
€ 3.0 
€ 2.5 
€ 2.0 
€ 1.5 
€ 1.0 
€ 0.5 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
12 
€ 0.33 
€ 0.21 
€ 0.02 
€ 0.05 
€ 0.00 
Canada Brazil Mexico Other LatAm 
€ 4.31 
€ 0.0 
U.S. 
Americas Industry YTD ACV (€B)* 
Avg of Prior 4 YTDs YTD 3Q14 
€ 0.9 
€ 1.7 
€ 0.7 
€ 0.7 
€ 0.5 
€ 0.4 
€ 0.4 
€ 0.7 
€ 0.2 
€ 0.0 € 1.0 € 2.0 
Manufacturing 
Financial Services 
Telecom & Media 
Healthcare & Pharma 
Business Services 
Retail 
Consumer Products & 
Goods 
Energy 
Travel, Transport & 
Leisure
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ISG Sourcing Market Standouts in the Americas 
Americas-based providers head up the Big 10 Sourcing Standouts. Providers with 
substantial offshore profiles lead in both the Building and Breakthrough tiers. 
SOURCING 
STANDOUTS BY COMPANY SIZE 
The Building 10 
Sourcing Standouts 
CBRE Group 
CGI 
Cognizant1 
CompuCom 
Genpact 
HCL1 
Infosys1 
Tech Mahindra 
Teleperformance 
Wipro 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
13 
The Breakthrough 10 
Sourcing Standouts 
Co. Revenues €2 -10 B Co. Revenues < €2 B 
Accenture1 
BT 
Capgemini1 
CSC1 
Dell 
IBM1 
ISS 
RR Donnelley 
TCS1 
Xerox1 
Allscripts Healthcare Solutions 
EXL 
Garda World 
iGATE1 
KPIT Technologies 
Minacs 
Neoris 
NIIT 
Sitel 
Syntel 
The Big 10 
Sourcing Standouts 
Co. Revenues > €10B
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Asia Pacific quarterly ACV is down 27% Y/Y on the absence of large contract 
awards. Year-to-date ACV is up almost 60% on substantial contracting activity. 
Asia Pacific Year-to-date ACV (€B)* 
€ 3.0 
€ 2.5 
€ 2.0 
€ 1.5 
€ 1.0 
€ 0.5 
Asia Pacific YTD Segment Details ACV (€B)* 
€ 2.5 
€ 2.0 
€ 1.5 
€ 1.0 
€ 0.5 
140 
120 
100 
80 
60 
40 
20 
1H Counts 3Q Counts 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
14 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14 
€ 1.3 
€ 0.5 
€ 1.7 
€ 0.0 € 0.1 
New Scope Restructuring ITO BPO 
Asia Pacific Contract Award Trends 
Asia Pacific Year-to-date Counts 
79 
59 
78 
64 74 
62 
43 42 42 
26 
27 
39 
38 
32 
32 24 
16 25 27 
19 
- 
2005 06 07 08 09 10 11 12 13 2014 
€ 1.5 
€ 0.7 
€ 1.6 
€ 0.6 € 0.8 
€ 1.1 
€ 0.6 
€ 0.8 € 0.9 
€ 0.4 
€ 0.3 
€ 0.4 
€ 0.6 
€ 0.4 
€ 0.4 
€ 0.5 
€ 0.5 
€ 0.4 
€ 0.2 
€ 0.3 
€ 0.4 
€ 0.5 
€ 0.8 € 0.4 
€ 0.5 
€ 0.7 
€ 0.7 
€ 0.3 
€ 0.6 
2005 06 07 08 09 10 11 12 13 2014 
€ 0.0 
1H ACV 3Q ACV 4Q ACV
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Asia Pacific Contract Award Trends Detail 
€ 1.2 
€ 1.0 
€ 0.8 
€ 0.6 
€ 0.4 
€ 0.2 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
15 
YTD Asia Pacific ACV gains are the result of stepped up activity in ANZ and large 
awards in Japan. China and India bounce back from weaker 2013 results. 
Asia Pacific Sub-regions Year-to-date ACV (€B)* 
Asia Pacific Industries 
YTD ACV (€B)* 
Avg of Prior 4 YTDs YTD 3Q14 
€ 0.39 
€ 0.27 
€ 0.51 
€ 0.22 
€ 0.14 
€ 0.04 
€ 0.06 
€ 0.12 
€ 0.03 
€ - € 0.2 € 0.4 € 0.6 
Telecom & Media 
Financial Services 
Manufacturing 
Travel, Transport & 
Leisure 
Energy 
Business Services 
Healthcare & 
Pharma 
Consumer Products 
& Goods 
Retail 
€ 0.48 
€ 0.37 
€ 0.49 
€ 0.25 
€ 0.17 
€ - € 0.01 
ANZ India and 
South Asia 
Japan Greater 
China 
Southeast 
Asia 
South Korea 
Range of Prior 4 YTDs Avg of Prior 4 YTDs 
YTD 3Q13 YTD 3Q14
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ISG Sourcing Market Standouts in Asia Pacific 
Japanese providers join large multinationals in the Big 10 Sourcing Standouts list. 
Australian and India-based providers contribute greatly to the two smaller tiers. 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
16 
SOURCING 
STANDOUTS BY COMPANY SIZE 
Co. Revenues €2 -10 B Co. Revenues < €2 B 
Co. Revenues > €10B 
Cognizant1 
HCL 
Infosys1 
Orange Business Services 
Singtel Optus 
Tech Mahindra 
UGL Limited 
Unisys 
Wipro1 
Accenture1 
AT&T 
Capgemini 
CSC1 
Fujitsu1 
Hitachi 
IBM1 
NTT 
TCS1 
Telstra1 
Aegis 
ChinaSoft1 
Hollysys Automation 
Itron 
Kratos Defense & Security 
NGA Human Resources 
Pactera 
Ramco 
Redknee Solutions 
SITA 
The Building 10 
Sourcing Standouts 
The Breakthrough 10 
Sourcing Standouts 
The Big 10 
Sourcing Standouts
ISG MOMENTUM® METHODOLOGY FOR 
SOURCING OPPORTUNITIES ASSESSMENT 
Special Topic for 3Q14
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Energy Industry ACV (€B)* 
Chemicals Oil & Gas Ops Utilities 
$3 
$2 
$1 
Utilities Historical Frame 
exhibits consistency —over €1B in 
ACV for past five years —within 
Energy, a consistent performer on 
pace for a record high 2014 ACV 
HUNTING FARMING 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
18 
Historic vs. Potential Industry Characterization 
Historical Activity Frames an Industry 
$0 
2014 
YTD 
2010 '11 '12 '13 
But more information is needed to Characterize the Industry Potential 
Momentum® Vertical Reports gauge a market’s maturity and momentum 
Amount of industry business 
available but not yet captured 
by service providers 
vs 
U 
Amount of industry growth that 
can be cultivated from outsourcing 
relationships in place 
1 
Utilities Potential 
ISG’s 2014 Momentum Vertical Report 
rates Utilities as Medium Hunting and High Farming 
2 
WHY?
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Medium Hunting: Recent Growth Is Highest of 27 Verticals 
Utilities Market Spend (ACV) 
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase® 
19 
Industry Challenges 
local hiring 
requirements, heavy 
regulation and M&A 
activity impact 
service 
standardization and 
flexibility 
$1,395 
$1,612 
$1,746 
$1,695 $1,613 
$1,824 
$2,006 
$3,078 
$3,411 
$3,340 
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 
US$ Millions 
Growth: 5% 16% 8% -3% -5% 13% 10% 53% 11% -2% 
18.5 % compound 
annual growth rate 
for outsourcing 
spending by Utilities 
clients is highest 
among the 27 
verticals 
Momentum tracks 
1 
2 
2014 Vertical Industry Report
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High Farming: Low Per-company ACV Leaves Room for Growth 
2013 Utilities 
Market Composition 
108 Companies 
Outsourcing 
Not Outsourcing 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
20 
Innovative solutions 
abound due to 
deregulation, smart 
grid technologies, and 
ongoing service 
efficiency needs 
2013 Utilities 
Average Market Spend 
Utilities 
Market Average 
€66.8 €99.8 
50 58 
46% Penetration Rate 
is in line with 47% 
G2000 average 
1 
Below Average Spend 
compared to G2000 in 
2013 
2 
3 
2014 Vertical Industry Report
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T-Systems 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
21 
Who’s Winning the Utilities Contracts? 
The utilities client base is served by a competitive set of service providers. Industry 
specific BPO solutions and ITO cloud integration are key areas of focus. 
18% 
16% 
14% 
12% 
12% 
12% 
12% 
10% 
10% 
6% 
6% 
6% 
6% 
6% 
6% 
6% 
Capgemini 
TCS 
Accenture 
IBM 
HP 
Atos 
CGI 
CSC 
Wipro 
Fujitsu 
Xerox 
HCL 
Aon Hewitt 
TSystems 
Cognizant 
Carillion 
Utilities Clients Focus on Solutions 
High BPO adoption focusing on industry-specific 
solutions at a much higher rate than 
the global average 
 ITO services outsourced slightly below 
the G2000 average 
 Utilities maturing strategy around cloud 
services increases demand for 
integration with traditional IT 
Infrastructure. 
 Cloud services seen as a foundational 
element for next-generation IT 
infrastructures 
 Cloud strategies needed in all 
technology elements of a proposal 
2013 Service Provider Penetration 
in Momentum’s Utilities Vertical 
n = 50 Companies 
2014 Vertical Industry Report
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3Q14 ISG Outsourcing Index Summary and Outlook 
market 
market 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
22 
 As ISG forecast, Broader Market ACV lagged Y/Y on lower contract counts 
 Weakness across both the ITO and BPO markets, although ITO will likely 
surpass 2013’s results but BPO continues to yield patchy results 
 All regions are ahead of 2013’s pace 
 Americas ACV was up Y/Y as large awards in Canada and Brazil supported 
growth in the region 
 EMEA 3Q slipped as its key geographic markets pulled back; YTD sourcing 
activity continues to spread geographically in the continent, especially in 
France and Southern Europe 
 Asia Pacific slowed from record 1H14 as large awards were absent; YTD 
Australia rebounded and Japan becomes noteworthy 
 Expect a pickup in activity in 4Q14 as we have noticed a buildup of 
transaction activity likely to be awarded in next few quarters 
 Expect 2014 ACV to exceed 2013 by double digits, although tepid 3Q14 
performance may suppress comparisons against more robust periods like 
the years 2010-12 
summary 
outlook
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isg-one.com 
Learn More 
www.isg-one.com 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
23 
Please contact us with your questions and comments. 
Paul Reynolds 
Chief Research Officer 
+1 508 625 2194 
paul.reynolds@isg-one.com 
ISG insights serving providers and market analysts 
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 
Bhakti Gajjar 
Cohn  Wolfe for ISG 
+44 (0) 20 7331 5363 
bhakti.gajjar@cohnwolfe.com
APPENDIX: SCORE CARD FOR TCV 
Third Quarter 2014
© 2014 
Information Services 
Group, Inc. 
All Rights Reserved 
isg-one.com 
3Q14 TCV Scorecard 
Scorecard 
3Q14 3Q Y/Y 3Q Q/Q YTD YTD 
TCV (€B)* Change Change TCV (€B)* Change 
Global Market € 18.2 -9% -17% € 61.1 15% 
New Scope € 12.6 1% -14% € 40.9 23% 
Restructurings € 5.6 -26% -24% € 20.2 1% 
Mega-deals € 3.9 20% -30% € 12.1 26% 
ITO € 13.1 -12% -21% € 45.1 27% 
BPO € 5.0 -2% -6% € 16.0 -11% 
Americas € 8.3 66% 15% € 22.1 32% 
EMEA € 8.7 -35% -24% € 30.9 -1% 
Asia Pacific € 1.2 -26% -64% € 8.1 54% 
*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 
25 
The ISG Outsourcing 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. 
*Contracts with TCV ≥ €25M from the ISG Contracts Knowledgebase®
knowledge powering results® 
www.isg-one.com 
Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more 
than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector 
organizations to transform and optimize their operational environments through research, benchmarking, consulting and 
managed services, with a focus on information technology, business process transformation, program management services and 
enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the 
deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory 
services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.

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EMEA ISG Outsourcing Index Q3/2014

  • 1. The EMEA ISG Outsourcing Index Market Data and Insights Third Quarter 2014 Hosted by: James Goodman Barclays Capital 16 October 2014
  • 2. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Welcome to the 48th Quarterly Outsourcing Index Review John Keppel Partner & President *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 2 Covering the state of the outsourcing industry for global and EMEA commercial contracts.* Dr. David Howie Partner Bernd Schaefer Partner
  • 3. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 3 At a Glance AS ISG PREDICTED, LIGHTER CONTRACTING ACTIVITY DROVE GLOBAL BROADER MARKET ACV DOWN Y/Y ITO AND BPO BOTH DECLINED BY DOUBLE DIGITS; YTD, ITO REMAINS IN POSITIVE TERRITORY WHILE BPO CONTINUES TO PRODUCE UNEVEN RESULTS EMEA PERFORMANCE WEAKER WITH DACH AND NORDICS SLIDING; YTD, ACV SHOULD SURPASS 2013 WITH STRENGTH IN FRANCE AND SOUTHERN EUROPE AMERICAS RESULTS TREND UPWARD Y/Y, LARGE-DEAL ACTIVITY IN CANADA AND BRAZIL OFFSET FLAT U.S. PERFORMANCE ASIA PACIFIC'S QUARTERLY PACE SLOWED BY ABSENCE OF LARGE DEALS Scorecard 3Q14 3Q Y/Y 3Q Q/Q YTD YTD Y/Y ACV (€B)* Change Change ACV (€B)* Change Global Market € 3.7 -21% -28% € 13.7 13% New Scope € 2.4 -10% -27% € 8.7 22% Restructurings € 1.3 -36% -31% € 5.0 0% Mega-relationships € 1.0 2% -21% € 3.8 23% ITO € 2.7 -23% -31% € 10.4 22% BPO € 1.0 -17% -18% € 3.3 -9% Americas € 1.5 11% -17% € 4.9 18% EMEA € 1.9 -36% -26% € 7.0 3% Asia Pacific € 0.3 -27% -64% € 1.8 59%
  • 4. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Global Market Contract Award Trends € 5.7 € 4.3 € 4.5 € 4.5 € 4.9 € 3.5 € 3.9 € 5.7 € 3.6 € 3.4 € 3.6 € 4.9 € 4.4 € 3.1 € 2.3 € 2.5 € 8.8 € 8.2 € 10.0 € 8.1 € 10.0 € 7.4 € 7.1 € 7.0 2005 06 07 08 09 10 11 12 13 2014 1H Counts 3Q Counts *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 4 Global Broader Market Quarterly ACV is down 21% Y/Y on slower contracting activity. YTD, ACV is still at the second-highest level ever, up 13% against 2013. Year-to-date Broader Market (€B)* Year-to-date Contracting Counts € 3.7 € 10.0 660 € 3.7 € 4.7 € 7.4 511 631 631 528 518 329 332 343 408 239 352 295 252 221 235 227 142 141 163 € 20 € 15 € 10 € 5 1,000 750 500 250 - 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV 4Q ACV
  • 5. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Global ITO and BPO Contract Award Trends € 12 € 10 € 8 € 6 € 4 € 2 700 600 500 400 300 200 100 1H Counts 3Q Counts *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 5 Both ITO and BPO quarterly ACV down Y/Y. Year-to-date, ITO ACV stands at all-time high while BPO ACV has trended lower, down 9% from 2013. BPO Year-to-date ACV (€B)* ITO Year-to-date ACV (€B)* BPO ITO Year-to-date Counts Year-to-date Counts 484 327 400 396 336 364 228 271 224 202 173 185 161 248 146 139 140 108 81 92 - 2005 06 07 08 09 10 11 12 13 2014 184 176 1H Counts 3Q Counts 231 235 192 130 115 137 154 105 66 104 110 91 96 87 75 60 55 50 € 6 € 4 € 2 400 300 200 100 - 2005 06 07 08 09 10 11 12 13 2014 € 7.7 € 5.0 € 5.4 € 6.2 € 7.6 € 6.3 € 5.9 € 5.4 € 5.3 € 5.0 € 2.7 € 3.5 € 2.9 € 3.5 € 2.5 € 2.5 € 2.5 € 1.4 € 1.7 € 2.2 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV € 2.4 € 2.3 € 3.7 € 2.6 € 2.3 € 2.4 € 2.8 € 2.0 € 1.9 € 1.9 € 1.2 € 1.0 € 1.6 € 1.3 € 0.9 € 1.0 € 1.1 € 0.9 € 0.8 € 0.8 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV
  • 6. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com 500 400 300 200 100 1H Counts 3Q Counts € 5.0 € 4.5 € 4.0 € 3.5 € 3.0 € 2.5 *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 6 EMEA quarterly ACV is down 36% Y/Y as the number of awards drop markedly. Year-to-date, ACV is up slightly at 3% on the strength in ITO. EMEA Year-to-date ACV (€B)* € 12 € 10 € 8 € 6 € 4 € 2 EMEA YTD New vs. Restructuring ACV (€B)* EMEA Contract Award Trends EMEA Year-to-date Counts 316 298 275 257 225 198 237 173 140 159 115 110 176 144 106 110 116 76 77 66 - 2005 06 07 08 09 10 11 12 13 2014 € 5.1 € 4.8 € 4.3 € 4.4 € 3.9 € 3.7 € 5.8 € 2.7 € 3.3 € 4.0 € 1.9 € 1.6 € 2.9 € 2.4 € 2.9 € 1.4 € 2.0 € 1.4 € 1.2 € 1.4 € 2.3 € 2.1 € 3.4 € 2.8 € 3.3 € 1.8 € 2.0 € 1.9 € 2.2 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV 4Q ACV Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 4.3 € 2.7 € 2.0 New Scope Restructuring
  • 7. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com EMEA Contract Award Trends Detail France and Southern Europe help support year-to-date gains in EMEA while the more mature markets of the U.K., DACH and the Nordics pull back from 2013. €3.5 €3.0 €2.5 €2.0 €1.5 €1.0 €0.5 EMEA Sub-regions Year-to-date ACV (€B)* EMEA Industries YTD ACV (€B)* *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 7 € 2.2 € 1.2 € 1.1 € 0.3 € 1.1 € 0.7 € 0.3 € 0.2 €- U.K. & Ireland DACH Nordics Benelux France Southern Europe Africa & Middle East E. Europe & Russia Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 Avg of Prior 4 YTDs YTD 3Q14 € 1.3 € 1.5 € 1.2 € 1.2 € 0.8 € 0.4 € 0.2 € 0.3 € 0.2 € - € 0.5 € 1.0 € 1.5 € 2.0 Financial Services Manufacturing Travel, Transport & Leisure Energy Telecom & Media Business Services Retail Consumer Products & Goods Healthcare & Pharma
  • 8. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com EMEA ITO Contract Award Trends 1H Counts 3Q Counts € 4.0 € 3.5 € 3.0 € 2.5 € 2.0 € 1.5 *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 8 ITO contract numbers in EMEA hit an all-time high year-to-date, while ACV reached its second highest level ever, despite a slowdown in the third quarter EMEA ITO Year-to-date ACV (€B)* € 4.2 € 3.1 € 2.7 € 2.8 € 10 € 8 € 6 € 4 € 2 EMEA ITO YTD New vs. Restructuring ACV * EMEA ITO Year-to-date Counts 243 214 187 166 187 165 156 122 87 129 95 78 124 103 77 82 78 51 42 49 2005 06 07 08 09 10 11 12 13 2014 Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 3.5 € 2.4 € 1.0 New Scope Restructuring € 4.1 € 3.1 € 4.6 € 1.8 € 2.7 € 3.3 € 1.7 € 1.7 € 2.4 € 1.2 € 2.4 € 1.2 € 1.5 € 1.0 € 0.7 € 1.2 € 1.6 € 1.4 € 2.5 € 2.7 € 2.5 € 1.5 € 1.1 € 1.5 € 1.5 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV 4Q ACV
  • 9. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com EMEA BPO Contract Award Trends € 2.0 € 1.5 € 1.0 € 0.5 1H Counts 3Q Counts *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 9 Year to date, BPO ACV and counts fell more than a third, driven by a lack of contracting activity by the Financial Services sector EMEA BPO Year-to-date ACV (€B)* € 1.1 € 0.9 € 1.7 € 1.2 € 4.0 € 3.0 € 2.0 € 1.0 EMEA BPO YTD New vs. Restructuring ACV* EMEA BPO Year-to-date Counts Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 0.9 € 0.2 € 0.0 New Scope Restructuring € 0.6 € 0.8 € 1.2 € 0.7 € 0.8 € 0.6 € 0.6 € 0.2 € 0.7 € 0.5 € 0.4 € 0.2 € 0.5 € 0.4 € 0.5 € 0.2 € 0.4 € 0.9 € 0.7 € 0.8 € 0.3 € 0.3 € 0.4 € 0.9 € 0.7 2005 06 07 08 09 10 11 12 13 2014 € 0.0 1H ACV 3Q ACV 4Q ACV 73 88 91 84 60 37 42 50 44 53 20 52 41 32 33 38 24 26 34 17 2005 06 07 08 09 10 11 12 13 2014
  • 10. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com ISG Sourcing Market Standouts in EMEA Large multinationals and providers with strong local “home market” profiles head up both the Big 10 and Building 10 tiers. SOURCING STANDOUTS BY COMPANY SIZE *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 10 Co. Revenues €2 -10 B Co. Revenues < €2 B Co. Revenues > €10B Capita Carillion1 Cognizant1 EVRY HCL1 Infosys1 Mitie Group Orange Business Services Tech Mahindra Tieto Accenture1 Atos1 BT1 Capgemini1 CSC Fujitsu HP IBM1 TCS1 T-Systems HH Global iGATE Innovation Group Kelway MAYKOR NGA Human Resources NNIT A/S Quindell Sitel The Building 10 Sourcing Standouts The Breakthrough 10 Sourcing Standouts The Big 10 Sourcing Standouts
  • 11. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Americas quarterly ACV was up 11% Y/Y even as the number of contract awards fell back. Year-to-date, ACV is up 18% from 2013 with New Scope ACV growing 30%. Americas Year-to-date ACV (€B)* € 8 € 6 € 4 € 2 Americas YTD Segment Details ACV (€B)* € 5 € 4 € 3 € 2 € 1 500 400 300 200 100 1H Counts 3Q Counts *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 11 Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 3.1 € 1.8 € 2.9 € 2.0 € 0 New Scope Restructuring ITO BPO Americas Contract Award Trends Americas Year-to-date Counts 265 195 278 239 259 219 130 149 142 168 97 137 119 104 101 83 84 57 49 61 - 2005 06 07 08 09 10 11 12 13 2014 € 2.8 € 3.4 € 4.0 € 3.0 € 4.5 € 3.4 € 2.8 € 2.5 € 3.0 € 3.7 € 1.5 € 1.4 € 1.5 € 1.6 € 1.6 € 1.5 € 0.7 € 1.1 € 1.5 € 0.9 € 1.2 € 1.5 € 1.9 € 0.9 € 1.9 € 2.2 € 1.4 € 1.6 € 1.4 2005 06 07 08 09 10 11 12 13 2014 € 0 1H ACV 3Q ACV 4Q ACV
  • 12. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Americas Contract Award Trends Detail Year-to-date, U.S. ACV has risen 17% against 2013. Both Canada and Brazil ACV have advanced as a result of some larger contract awards. Americas Sub-regions Year-to-date ACV (€B)* Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 0.45 € 0.40 € 0.35 € 0.30 € 0.25 € 0.20 € 0.15 € 0.10 € 0.05 € 6.0 € 5.5 € 5.0 € 4.5 € 4.0 € 3.5 € 3.0 € 2.5 € 2.0 € 1.5 € 1.0 € 0.5 *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 12 € 0.33 € 0.21 € 0.02 € 0.05 € 0.00 Canada Brazil Mexico Other LatAm € 4.31 € 0.0 U.S. Americas Industry YTD ACV (€B)* Avg of Prior 4 YTDs YTD 3Q14 € 0.9 € 1.7 € 0.7 € 0.7 € 0.5 € 0.4 € 0.4 € 0.7 € 0.2 € 0.0 € 1.0 € 2.0 Manufacturing Financial Services Telecom & Media Healthcare & Pharma Business Services Retail Consumer Products & Goods Energy Travel, Transport & Leisure
  • 13. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com ISG Sourcing Market Standouts in the Americas Americas-based providers head up the Big 10 Sourcing Standouts. Providers with substantial offshore profiles lead in both the Building and Breakthrough tiers. SOURCING STANDOUTS BY COMPANY SIZE The Building 10 Sourcing Standouts CBRE Group CGI Cognizant1 CompuCom Genpact HCL1 Infosys1 Tech Mahindra Teleperformance Wipro *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 13 The Breakthrough 10 Sourcing Standouts Co. Revenues €2 -10 B Co. Revenues < €2 B Accenture1 BT Capgemini1 CSC1 Dell IBM1 ISS RR Donnelley TCS1 Xerox1 Allscripts Healthcare Solutions EXL Garda World iGATE1 KPIT Technologies Minacs Neoris NIIT Sitel Syntel The Big 10 Sourcing Standouts Co. Revenues > €10B
  • 14. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Asia Pacific quarterly ACV is down 27% Y/Y on the absence of large contract awards. Year-to-date ACV is up almost 60% on substantial contracting activity. Asia Pacific Year-to-date ACV (€B)* € 3.0 € 2.5 € 2.0 € 1.5 € 1.0 € 0.5 Asia Pacific YTD Segment Details ACV (€B)* € 2.5 € 2.0 € 1.5 € 1.0 € 0.5 140 120 100 80 60 40 20 1H Counts 3Q Counts *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 14 Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14 € 1.3 € 0.5 € 1.7 € 0.0 € 0.1 New Scope Restructuring ITO BPO Asia Pacific Contract Award Trends Asia Pacific Year-to-date Counts 79 59 78 64 74 62 43 42 42 26 27 39 38 32 32 24 16 25 27 19 - 2005 06 07 08 09 10 11 12 13 2014 € 1.5 € 0.7 € 1.6 € 0.6 € 0.8 € 1.1 € 0.6 € 0.8 € 0.9 € 0.4 € 0.3 € 0.4 € 0.6 € 0.4 € 0.4 € 0.5 € 0.5 € 0.4 € 0.2 € 0.3 € 0.4 € 0.5 € 0.8 € 0.4 € 0.5 € 0.7 € 0.7 € 0.3 € 0.6 2005 06 07 08 09 10 11 12 13 2014 € 0.0 1H ACV 3Q ACV 4Q ACV
  • 15. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Asia Pacific Contract Award Trends Detail € 1.2 € 1.0 € 0.8 € 0.6 € 0.4 € 0.2 *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 15 YTD Asia Pacific ACV gains are the result of stepped up activity in ANZ and large awards in Japan. China and India bounce back from weaker 2013 results. Asia Pacific Sub-regions Year-to-date ACV (€B)* Asia Pacific Industries YTD ACV (€B)* Avg of Prior 4 YTDs YTD 3Q14 € 0.39 € 0.27 € 0.51 € 0.22 € 0.14 € 0.04 € 0.06 € 0.12 € 0.03 € - € 0.2 € 0.4 € 0.6 Telecom & Media Financial Services Manufacturing Travel, Transport & Leisure Energy Business Services Healthcare & Pharma Consumer Products & Goods Retail € 0.48 € 0.37 € 0.49 € 0.25 € 0.17 € - € 0.01 ANZ India and South Asia Japan Greater China Southeast Asia South Korea Range of Prior 4 YTDs Avg of Prior 4 YTDs YTD 3Q13 YTD 3Q14
  • 16. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com ISG Sourcing Market Standouts in Asia Pacific Japanese providers join large multinationals in the Big 10 Sourcing Standouts list. Australian and India-based providers contribute greatly to the two smaller tiers. *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 16 SOURCING STANDOUTS BY COMPANY SIZE Co. Revenues €2 -10 B Co. Revenues < €2 B Co. Revenues > €10B Cognizant1 HCL Infosys1 Orange Business Services Singtel Optus Tech Mahindra UGL Limited Unisys Wipro1 Accenture1 AT&T Capgemini CSC1 Fujitsu1 Hitachi IBM1 NTT TCS1 Telstra1 Aegis ChinaSoft1 Hollysys Automation Itron Kratos Defense & Security NGA Human Resources Pactera Ramco Redknee Solutions SITA The Building 10 Sourcing Standouts The Breakthrough 10 Sourcing Standouts The Big 10 Sourcing Standouts
  • 17. ISG MOMENTUM® METHODOLOGY FOR SOURCING OPPORTUNITIES ASSESSMENT Special Topic for 3Q14
  • 18. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Energy Industry ACV (€B)* Chemicals Oil & Gas Ops Utilities $3 $2 $1 Utilities Historical Frame exhibits consistency —over €1B in ACV for past five years —within Energy, a consistent performer on pace for a record high 2014 ACV HUNTING FARMING *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 18 Historic vs. Potential Industry Characterization Historical Activity Frames an Industry $0 2014 YTD 2010 '11 '12 '13 But more information is needed to Characterize the Industry Potential Momentum® Vertical Reports gauge a market’s maturity and momentum Amount of industry business available but not yet captured by service providers vs U Amount of industry growth that can be cultivated from outsourcing relationships in place 1 Utilities Potential ISG’s 2014 Momentum Vertical Report rates Utilities as Medium Hunting and High Farming 2 WHY?
  • 19. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Medium Hunting: Recent Growth Is Highest of 27 Verticals Utilities Market Spend (ACV) *Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase® 19 Industry Challenges local hiring requirements, heavy regulation and M&A activity impact service standardization and flexibility $1,395 $1,612 $1,746 $1,695 $1,613 $1,824 $2,006 $3,078 $3,411 $3,340 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 US$ Millions Growth: 5% 16% 8% -3% -5% 13% 10% 53% 11% -2% 18.5 % compound annual growth rate for outsourcing spending by Utilities clients is highest among the 27 verticals Momentum tracks 1 2 2014 Vertical Industry Report
  • 20. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com High Farming: Low Per-company ACV Leaves Room for Growth 2013 Utilities Market Composition 108 Companies Outsourcing Not Outsourcing *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 20 Innovative solutions abound due to deregulation, smart grid technologies, and ongoing service efficiency needs 2013 Utilities Average Market Spend Utilities Market Average €66.8 €99.8 50 58 46% Penetration Rate is in line with 47% G2000 average 1 Below Average Spend compared to G2000 in 2013 2 3 2014 Vertical Industry Report
  • 21. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com T-Systems *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 21 Who’s Winning the Utilities Contracts? The utilities client base is served by a competitive set of service providers. Industry specific BPO solutions and ITO cloud integration are key areas of focus. 18% 16% 14% 12% 12% 12% 12% 10% 10% 6% 6% 6% 6% 6% 6% 6% Capgemini TCS Accenture IBM HP Atos CGI CSC Wipro Fujitsu Xerox HCL Aon Hewitt TSystems Cognizant Carillion Utilities Clients Focus on Solutions High BPO adoption focusing on industry-specific solutions at a much higher rate than the global average ITO services outsourced slightly below the G2000 average Utilities maturing strategy around cloud services increases demand for integration with traditional IT Infrastructure. Cloud services seen as a foundational element for next-generation IT infrastructures Cloud strategies needed in all technology elements of a proposal 2013 Service Provider Penetration in Momentum’s Utilities Vertical n = 50 Companies 2014 Vertical Industry Report
  • 22. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com 3Q14 ISG Outsourcing Index Summary and Outlook market market *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 22 As ISG forecast, Broader Market ACV lagged Y/Y on lower contract counts Weakness across both the ITO and BPO markets, although ITO will likely surpass 2013’s results but BPO continues to yield patchy results All regions are ahead of 2013’s pace Americas ACV was up Y/Y as large awards in Canada and Brazil supported growth in the region EMEA 3Q slipped as its key geographic markets pulled back; YTD sourcing activity continues to spread geographically in the continent, especially in France and Southern Europe Asia Pacific slowed from record 1H14 as large awards were absent; YTD Australia rebounded and Japan becomes noteworthy Expect a pickup in activity in 4Q14 as we have noticed a buildup of transaction activity likely to be awarded in next few quarters Expect 2014 ACV to exceed 2013 by double digits, although tepid 3Q14 performance may suppress comparisons against more robust periods like the years 2010-12 summary outlook
  • 23. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com Learn More www.isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 23 Please contact us with your questions and comments. Paul Reynolds Chief Research Officer +1 508 625 2194 paul.reynolds@isg-one.com ISG insights serving providers and market analysts 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 Bhakti Gajjar Cohn Wolfe for ISG +44 (0) 20 7331 5363 bhakti.gajjar@cohnwolfe.com
  • 24. APPENDIX: SCORE CARD FOR TCV Third Quarter 2014
  • 25. © 2014 Information Services Group, Inc. All Rights Reserved isg-one.com 3Q14 TCV Scorecard Scorecard 3Q14 3Q Y/Y 3Q Q/Q YTD YTD TCV (€B)* Change Change TCV (€B)* Change Global Market € 18.2 -9% -17% € 61.1 15% New Scope € 12.6 1% -14% € 40.9 23% Restructurings € 5.6 -26% -24% € 20.2 1% Mega-deals € 3.9 20% -30% € 12.1 26% ITO € 13.1 -12% -21% € 45.1 27% BPO € 5.0 -2% -6% € 16.0 -11% Americas € 8.3 66% 15% € 22.1 32% EMEA € 8.7 -35% -24% € 30.9 -1% Asia Pacific € 1.2 -26% -64% € 8.1 54% *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 25 The ISG Outsourcing 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. *Contracts with TCV ≥ €25M from the ISG Contracts Knowledgebase®
  • 26. knowledge powering results® www.isg-one.com Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.