4Q08 Global TPI Index

Outsourcing Sees Strong Growth in 2008, Exceeding 2007 Values

• Total contract values (TCVs) softened in the second half of 2008, producing one of the weakest half years for TCV performance on record
• Strong performance from the first half of the year sustained the US$90 billion year-end TCV
• Annualized contract value (ACV) — the TCV divided by the duration of the contract — was the largest ever with a record US$17 billion
• In 2008, the market was defined by a 12 percent increase in smaller contract awards — contracts of less than US$1 billion in value
• Declining activity in the financial services sector had the greatest impact on overall 2008 values, while manufacturing, telecommunications and energy increased their TCVs a moderate or substantial amount

Click to view presentation

4Q08 Europe, the Middle East and Africa TPI Index

Global Figures Driven in Large Part by Strong EMEA Performance

• Europe, the Middle East and Africa (EMEA) recorded highest number of contracts ever awarded: 271
• Total value of contracts signed in 2008 was up 17 percent year on year
• EMEA represented 55 percent of the total value of outsourcing contracts awarded globally compared to 32 percent for the United States
• Value of contracts awarded in EMEA dropped by almost 50 percent in the second half of the year

Click to view presentation

4Q08 Asia Pacific TPI Index

Asia Pacific Sees Record Outsourcing Contract Award Volume in 2008

• Asia Pacific had record outsourcing contract awards in 2008, with 88 contracts valued at US$12.3 billion
• Region experienced 40 percent increase in the number of outsourcing contracts during second half of 2008
• Asia Pacific’s total contract value declined 6 percent from 2007’s TCV
• Two of the three mega deals — contracts valued at or greater than US$1 billion — signed globally in the second half of 2008 were in Asia Pacific
• Year-over-year TCV gains in India helped offset losses in Australia and Japan but were not enough to prevent the region’s slight decrease in total TCV for 2008 in comparison with 2007

Click to view presentation

The increased adoption of offshoring has resulted in outsourcing clients' businesses being extended into service provider organizations in various offshore locations. While businesses have enjoyed cost savings and additional capability additions, they've also raised concerns about data security at the extended offshore units. To build a culture of security, TPI’s Indy Banerjee, Partner, explains how to have tight integration with your globally sourced service providers.

CIOs are expected to achieve 10 to 20 percent overall cost efficiencies in providing infrastructure services, and within the data center, the server environment provides great cost-saving opportunities. During a recent client engagement, TPI helped quickly achieve a 10 percent reduction in the client’s server population. The savings resulting from this action alone funded the resources to analyze the next steps in the cost reduction process.




TPI News

2009 Defining Year for Indian IT firms
CNBC Video

TPI Leaders Named HRO Superstars

TPI Expands Capabilities With New Hires, Partners

India's Outsourcing Revenue Will Grow More Slowly
PC World

UK Firms More Likely to Outsource During Recession
Computing

How to Limit Your Outsourcing Risk
CFO.com





TPI Events

Asia Pacific Sourcing Industry Awards (SIA) Dinner
The Establishment
Sydney, Australia
March 18, 2009

To submit nominations or for more information


Sourcing Leadership Exchange Conferences (for sourcing executives)

Asia Pacific Sourcing Leadership Exchange
The Establishment
Sydney, Australia
March 18 – 19, 2009

Americas Sourcing Leadership Exchange 2009
InterContinental Miami Hotel
(Chopin Plaza)
Miami, Florida
May 12 – 14, 2009

EMEA Sourcing Leadership Exchange 2009
Hotel Palais de la Mediterranee
Nice, France
June 3 – 5, 2009


Sourcing Industry Conference (for service providers and law firms)

Americas Sourcing Industry Conference 2009
InterContinental Miami Hotel
Miami, Florida
April 7 – 8, 2009





WARNING: Computer viruses can be transmitted via e-mail. The recipient should check this e-mail and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this e-mail.

Ask a senior corporate executive what she or he expects from a shared services or outsourcing relationship, and most likely you’ll hear the “I” word — innovation. Most will also tell you that innovation is elusive. There are five core components to bringing innovation to life:

1. The Foundation of Scale. Innovation demands sufficient scale. Scale helps create the economic foundation that justifies the investment.
   
   
2. Master Your Domain. Focusing the intellectual energies of well-informed and pragmatic experts is essential. These people must live in the world of operational services, not the hypotheticals of a laboratory.
   
   
3. Transparency of Investments. Innovations are aimed at capturing real value, but the pursuit requires a price. Make the investment obvious to those who will benefit from (and measure) the value of the results. Ideally, share responsibility for those investments.
   
   
4. Span of Control. Make certain that there is a delivery path for taking the innovation to reality. Shelfware ideas are not innovations.
   
   
5. A Destiny, not History. Too often, innovations are measured retrospectively. That undermines the proposition. Innovation is a destination for which we marshal resources. Put the innovation agenda on the table up front and engage leadership on the journey.

TPI experts can guide you in ensuring that innovation is part of the service delivery equation — even in times of cost-reduction.

Click to read more

Click to have TPI Top 5 updates delivered to your inbox

Browse the TPI Top 5 archive

Quick Savings AND Minimal Operations Risk? Try Facilities Management Outsourcing
by Peter Allen, Partner & Managing Director, TPI

Looking under rocks to find near-term cost savings in 2009?

Most companies today are thoroughly examining new areas of cost structure improvement in various areas. Although the spending is often widely distributed and not easily visible to the CFO, facilities management spend in most companies is much greater than IT spending.

First generation facilities management outsourcing projects are reliably returning a net 10 to 15 percent savings on facilities operations and maintenance, while at the same time bringing new transparency to this area of spend.