News @ TPI

Global Outsourcing Market Q1 2008: Healthy Start In Spite Of Credit Crunch And Other Economic Challenges


  • EMEA represents 70% of global market value
  • 6 out of 7 new mega deals in Q1 have been signed in Europe, three of them with Royal Dutch Shell
  • 108 new-scope contract awards globally valued at €15.7 billion in Q1
  • Past six months have witnessed the greatest ever amount of new scope added in any six-month period
  • Average Contract Value (ACV) increased globally in Q1 by nearly 20% on a year-on-year comparison

Press and analysts’ conference by tele-conference and webcast at 11.00am, Thursday 17th April,
http://wcc.webeventservices.com/view/wl/r.htm?e=107555&s=1&k=709E6D59188B957A8CA13EC36BA112D6&cb=genesys

17 April 2008 ― TPI, the largest sourcing data and advisory firm in the world and a unit of Information Services Group, Inc. (ISG) (NASDAQ:III), a leader in the information-based services industry, announced the key findings of its Quarterly Index tracking the global outsourcing market today. According to the latest Quarterly Index, 2007 established a landmark regional shift, with EMEA taking the lead in outsourcing activity. In Q1 2008 EMEA continued to dominate the outsourcing market; year-to-date EMEA represents about 70% of global market value, up from about 50% for the full year 2007.

The Broader Market in Q1 2008 saw 122 contracts awarded globally. These contracts were valued at over €16.5 billion in total contract value (TCV) and over €3.5 billion in annualised contract value (ACV). More than €2 billion of this ACV was contracted in EMEA, representing a year-on-year increase in the region of over 72%. While global TCV was down 3% on a year-on-year basis, the ACV tally was up nearly 20%. The Q1 ACV total marked the second best Q1 performance in the past five years. This was driven by the general trend to contracts of shorter average duration; the average contract duration of 5.4 years, recorded in Q1 2008 is the shortest ever.

6 out of the 7 mega deals awarded in the quarter were signed in EMEA, bolstering the Q1 global results. EMEA was also responsible for more than 65% of the TCV and ACV awarded to date in 2008.

The first quarter of 2008 was also significant for the high volume of new scope contracts awarded. Almost all of EMEA’s total contract value in Q1, €11 billion of a total of €11.4 billion, came from new-scope contracts, which included the three mega deals signed by Royal Dutch Shell in March.

Globally, the 108 new-scope contracts awarded, valued at €15.7 billion, demonstrate a fundamental demand for outsourcing.

“Again, driven by EMEA we have got the year off to a healthy start for the outsourcing market,” says Bernd Schaefer, Partner and Managing Director TPI Germany. “We definitely expect this to continue. Performance in the past six months, especially in EMEA, has lifted the historical trajectory and is suggesting that 2008 is likely to achieve the TCV levels of the past two years.”

On the Service Provider side, India-heritage providers joined the Big Six (Accenture, ACS, CSC, EDS, HP and IBM) and Big Five (Atos Origin, BT, Capgemini, Siemens and T-Systems) providers in winning more than three awards each this quarter. AT&T also won a place in this group. India-heritage providers accounted for 5% of the EMEA market in Q1, though they held 11% of the global TCV contracts awarded.


Other major findings of the latest TPI Quarterly Index include:

  • Contract restructuring influence dip in the first quarter
    The fourteen restructuring contracts awarded globally in Q1 2008 represent the lowest number, lowest TCV and lowest ACV in the past nine quarters. Just 5 restructuring contracts with a TCV of €400 million were signed in EMEA signalling a general satisfaction with existing outsourcing relationships.
  • Continued softness in contract awards in the Americas
    The number of contracts awarded in the Americas was the weakest since Q3 2006. Mega relationships have decreased in that region and there is a shift to shorter contract durations and contract value. The net effect in Americas is a market in which offshoring is increasing in significance.
  • BPO is on pace to exceed its 2007 level
    In Q1 2008, 48 BPO contracts worth about €4.8 billion TCV and €800 million in ACV were awarded globally. On a quarter-on-quarter basis the TCV is down about 39%, but on a year-on-year basis BPO TCV is up 88% over the Q1 2007 record. Although the Americas are still the largest user of BPO by number of contracts signed, EMEA accounted for 57% of the TCV awarded.

TPI European Index Call

The next quarterly TPI European Index Conference call takes place on Thursday 17th April 2008 at 11.00am CET. To join the conference call, please dial +49 (0)695 8999 0507. A web-cast will be available at: http://wcc.webeventservices.com/view/wl/r.htm?e=107555&s=1&k=709E6D59188B957A8CA13EC36BA112D6&cb=genesys

Replay Information:

Dial Information: (Access Code: 791342)
+49 (0)20 7031 4064 -- UK London
+49 (0) 30726167224 -- Germany
+1-888-365-0240 -- US Tollfree
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This will be available for 5 day(s) from 17 April 2008 until midnight on 22 April 2008.


About TPI

TPI, a unit of Information Services Group, Inc. (ISG) (NASDAQ:III) is the founder and innovator of the sourcing advisory industry, and the largest sourcing advisory firm in the world. We are expert at a broad range of business support functions and related research methodologies. Utilizing deep functional domain expertise and extensive practical experience, TPI’s accomplished industry experts collaborate with organizations to help them advance their business operations through the best combination of business process improvement, shared services, outsourcing and offshoring. For additional information, visit www.tpi.net.

About Information Services Group, Inc

Information Services Group, Inc. (ISG) (NASDAQ:III) was founded in 2006 to build an industry-leading, high-growth, information-based services company by acquiring and growing businesses in advisory, data, business and media information services. In November 2007, the company acquired TPI, the largest independent sourcing advisory firm in the world. Based in Stamford, Conn., ISG has a proven leadership team with global experience in information-based services and a track record of creating significant value for shareowners, clients and employees. For more, visit http://www.informationsg.com.