This morning we presented the 1Q11 Global TPI Index, which found that restructuring activity returned to historical norms following last year’s record spike, but the value of new scope awarded remained steady.
Total contract value (TCV) in the global outsourcing market was $17.5 billion during the first quarter of 2011. TCV dropped 28 percent from the first quarter of 2010 and 25 percent over the fourth quarter of 2010. However, restructurings, defined as contracts that are renewed, renegotiated or restructured, accounted for nearly all of the decline. New scope TCV of $14.9 billion was unchanged year-over-year and declined just 7 percent sequentially.
Among the highlights was business process outsourcing (BPO), which recorded its second-best quarterly performance in the last two years. By contrast, IT outsourcing (ITO) contract values dropped significantly, driven by the decline in restructurings. However, as with the broader market, new scope of nearly $10 billion in the segment was well within range of first quarters historically.
Among the regions of the world, Europe, the Middle East and Africa and Asia Pacific turned in steady performances. Meanwhile, the Americas suffered its third straight quarterly decline, with TCV falling 56 percent year-over-year but up 17 percent sequentially.
To listen to a replay of the 1Q11 Global TPI Index presentation and view presentation slides, please visit https://isg-one.com/research/articles/isg-index. We will share specific insights on market activity in Europe, the Middle East and Africa (EMEA) with the release of the 1Q11 EMEA TPI Index on Thursday, April 21st.
About the authorJohn is a proven executive leader with strategic, transaction and post-transaction experience. John has helped many large, global enterprises introduce and cultivate innovation as a part of the transformation process. Many of John’s projects have led to groundbreaking transactions, particularly in the UK Life and Pensions market, where John is a sought after C-suite advisor in the strategic sourcing of insurance operations. John has also conducted significant transactions in both IT infrastructure and applications environments. As a Partner and President, he sits on the ISG Executive Board and leads ISG EMEA and Asia.
