TPI Index Shows Outsourcing Market Cooled in Q1

Earlier today, we held our 1Q12 Global TPI Index conference call, during which we discussed noteworthy trends in the sourcing market during the first quarter.

Our headlines revealed that:

 

• By both contract awards and total contract value (TCV), the global commercial outsourcing market dropped quarter-over-quarter and year-overyear. A weak quarter after two consecutive strong quarters is a familiar historical pattern.
• While mega deals nearly vanished, mega relationships held firm . . . the latter mainly consisting of restructurings.
• Restructuring TCV climbed over the same period a year ago, but new scope TCV continued to dwindle.
  Both IT outsourcing and BPO contract numbers and TCV waned quarter-over-quarter and year-over-year.
• Europe in particular cooled off. However, Americas TCV improved sequentially, thanks in part to the lone mega deal in the market this quarter.
• ISG believes that the first half of 2012 will be a bit slower than the last half of 2011. However, we expect that second-half activity and TCV will pick up, resulting in full year 2012 TCV awards in line with historical norms.

You can read more details in our press release. A replay of today’s call is available until Apr. 20 on the TPI Index page of our web site, where you can also view the presentation slides. I hope you’ll have a chance to listen and sound off with your own perspectives in the comments section below!

About the author

John 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.