In the global outsourcing market during the fourth quarter and amid record contracting activity for the full year, the Information Services Group released TPI Index data showing healthy growth. The Information Services Group is a technology insights, market intelligence and advisory services. In the fourth quarter of 2011, the 4Q11 Global TPI Index which covers commercial outsourcing contracts valued $25 million or more, found total contract value of $26.4 int he fourth quarter of 2011. The growth was led by mega deals, the contracts with TCV of $1 billion or more, business process outsourcing or BPO and Europe the Middle East and Africa or EMEA.
The TCV reached $95 billion for all of 2011 is an increase of 3 percent over the prior year and the highest annual results since 2005. The 2011 was the busiest year on the record for the outsourcing market with 870 total awards well above the average of the five prior years of 690. In the smallest awards, an analysis of TPI Index data shows the intensified contracting activity is the result of a decade-long rise. Since 2002, while the numbers of mega-deals and mid-range contracts awarded each year has remained relatively stable since the year 2002.
John Keppel, Partner and President, Research and Managed Services ISG said that the acceleration of contracting activity alongside continued growth in overall contract value is a notable shift in the global outsourcing market. It is challenging clients to implement more sophisticated governance models and prompting services providers to team together to win and deliver business. The TPI Index presented by ISG includes the a quarterly snapshot of the sourcing industry for clients, service providers, analyst and the media. In the 37th consecutive quarter, it is the industry authorative source for marketplace intelligence related to outsourcing transaction structures and terms, geographic prevalence and service providers to team together to win and deliver business.
In the fourth quarter, the 4Q11 Global TPI Index found that year-end surge in the largest contracts boosted the outsourcing market. The mega-deal TCV rose 22 percent over the prior quarter and held steady year-over -year with four of five mega-deal awards coming in EMEA was not limited to the established markets of the United Kingdom, Scandinavia and Germany with momentum seen in France, Southern Europe and the Middle East. From the year 2010, the record in the other two regions was mixed. The fourth quarter TCV was up 22 percent year-over-year while annual TCV fell 20 percent from 2010.
The BPO continued its strong 2011 performance by scope with the fourth-quarter TCV up 60 percent year-over-year and full-year TCV up 32 percent to $29 billion. From the Financial Services Sector, the 336 BPO contracts signed in the year was more than in any previous year with much of the activity coming. In the Information Technology outsourcing segment also increased over 2010 contracting activity by 8 percent and it is up 86 percent since 2005. Over 2010, the TCV declined slightly year-over-year in the fourth quarter and the full-year total o9f $66 billion represented a 6 percent. After under performing the prior year through the third quarter the Financial Service Sector awarded a spurt of a large contracts to push its 2011 TCV to $27 billion among industries.
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http://www.globalservicesmedia.com/News/Home/Outsourcing-Megadeals-Hit-Fourth-Quarter-Peak/21/27/0/GS1201239210444