global tpi index - 4q12 and fy12

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Moshe Katri, Cowen and Company

16 January 2013

The TPI Index

Fourth Quarter and Full Year 2012

Global Sourcing Market Data and Insights

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*Contracts with ACV ≥ $5M

2

Covering the state of the outsourcing industry for global, commercial contracts.*

John Keppel President & Chief Marketing Officer

Esteban Herrera Partner Americas

Welcome to the 41st Quarterly Outsourcing Index Review

Dr. David Howie Partner EMEA

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*Contracts with ACV ≥ $5M

3

At A Glance

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*Contracts with ACV ≥ $5M

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ACV was down 27% Y/Y and 11% Q/Q on a strong 3Q and as the industry paused due to the US Election. For the full year, ACV of $21B was down 3% from 2011.

Broader Market ACV ($B)*

Broader Market Counts

Broader Market Contract Award Trends

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*Contracts with ACV ≥ $5M

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34 Mega-relationships were awarded in 2012, up 36%. Restructuring activity is prevalent in large deals for the third straight year.

Mega-relationship Contracts - ACV > $100M

Mega-relationship New/Restructured ACV

Broader Market Contract Trends for the Largest Deals

Mega-relationship Counts

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*Contracts with ACV ≥ $5M

6

ITO ACV was down 37% Y/Y and 18% Q/Q. For the full year, ACV was down 11% on diminishing New Scope awards.

ITO Annual ACV ($B)*

ITO Contract Award Trends

ITO Counts

Accenture

Atos

BT

Capgemini

CGI1

CSC

Dell

Fujitsu

HCL

HP

IBM

Infosys

Mahindra Satyam1

TCS

T-Systems

Top 15 ITO Providers by 2012 ACV Awarded

Note: Service providers in alphabetical order; no rankings implied. Placements sourced from ISG Contracts Knowledgebase®.

1New in 2012

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*Contracts with ACV ≥ $5M

7

BPO ACV was flat Y/Y and up 5% Q/Q. For the full year, ACV was up 14% because of several large contract awards.

BPO Annual ACV ($B)*

BPO Contract Award Trends

Top 15 BPO Providers by 2012 ACV Awarded

Accenture2

Aditya Birla Minacs

Capgemini2

Genpact2

HCL2

HP

IBM2

Infosys2

ISS Global

Jones Lang LaSalle

Mahindra Satyam

MITIE Group

Sodexho Alliance

Xchanging

Xerox2

BPO Counts

Note: Service providers in alphabetical order; no rankings implied. Placements sourced from ISG Contracts Knowledgebase®.

2Repeat from 2011

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*Contracts with ACV ≥ $5M

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Americas ACV was down 28% Y/Y and 9% Q/Q and full year ACV was down 3%. New Scope ACV remarkably consistent on a quarterly basis throughout the year.

Americas ACV ($B)*

Americas Contract Award Trends

Americas ITO and BPO ACV ($B)* Americas New and Restructured ACV ($B)*

$4.4

$5.6 $6.1 $5.9

$4.2

$5.4 $4.9 $5.0 $5.3 $5.1

$3.5 $2.4 $2.8

$2.4 $1.9

$1.4

$2.6 $2.5 $1.8

$2.3

201211100908070605042003

New Scope Restructured

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*Contracts with ACV ≥ $5M

9

LATAM markets were up significantly in 2012, while the U.S. market finished slightly below it’s five year average.

Americas Contract Award Trends Detail

Americas Sub-region ACV ($B)* Americas Industry ACV ($B)*

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*Contracts with ACV ≥ $5M

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EMEA ACV was down 29% Y/Y and 6% Q/Q. For the full Year, ACV was down 12% on lighter contracting activity.

EMEA ACV ($B)*

EMEA Contract Award Trends

EMEA ITO and BPO ACV ($B)* EMEA New and Restructured ACV ($B)*

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*Contracts with ACV ≥ $5M

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EMEA Contract Award Trends Detail

EMEA Sub-region ACV ($B)*

For the year, UK ACV was up 20% over 2011 and the Nordics and Benelux saw improvement. Financial Services ACV grew by 9% over 2011.

EMEA Industry ACV ($B)*

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*Contracts with ACV ≥ $5M

12

Asia Pacific ACV was flat Y/Y and down 34% Q/Q; For the year, ACV is up 55% off strong performance from the second quarter.

Asia Pacific ACV ($B)*

Asia Pacific Contract Award Trends

AP ITO and BPO ACV ($B)* AP New and Restructured ACV ($B)*

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The emerging markets of India, China and ASEAN lead Asia Pacific to record ACV result in 2012. ANZ, the traditional market leader, experienced a downturn.

Asia Pacific Contract Award Trends Detail

Asia Pacific Sub-region ACV ($B)* AP Industry ACV ($B)*

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*Contracts with ACV ≥ $5M

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The top service providers in each region based on total 2012 ACV awarded

Top Service Providers Across the Globe

Note: Service providers in alphabetical order; no rankings implied. Placements based on 2012 ACV commercial contract awards sourced from ISG Contracts Knowledgebase ®.

Special Topic for Fourth Quarter 2012

John Keppel President & Chief Marketing Officer

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*Contracts with ACV ≥ $5M

16

Key Short-term Trends in Sourcing for 2013 and Beyond

Emerging Markets to Continue their Increasing Impact on Sourcing ACV

LatinAm and Mexico

China and India

ACV Change from 2007

+150% +100%

BPO Expansion Continues with Industry Specific Solutions Leading the Way

$ +60%

BPO ACV Change from 2010

$ $ $ $ $ $ $ $

U.S. G201-500 Companies Recent Sourcing Adoption Rate Expands Large Deal Potential for Providers

2010 2012 32%

Adoption Rate

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*Contracts with ACV ≥ $5M

17

Disruptive Technologies Shape Long-term Industry Trends Four disruptive technology trends impact enterprises today and shape long-term industry trends: Social Media, Mobility, Cloud Computing and Big Data.

Social Media Collaboration

Computing & Storage

Mobility

Big Data/Analytics

Cloud

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*Contracts with ACV ≥ $5M

18

Case Study: Tech Trends Spur Transformative Solutions BT “Global Trace“ provides TNT with a cloud-based solution that leverages Big Data and Analytics to improve customer satisfaction and operational efficiency.

Social Media Collaboration

Computing & Storage

Mobility

Big Data/Analytics

Cloud

Social Media Data + Supply Chain Data +

External Data Sources

Global Trace utilizes real-time data

stored in the Cloud and analyzed with software

edge adaptors to improve client decision making

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*Contracts with ACV ≥ $5M

19

4Q ACV underperformed 3Q, yet 2012 performance nearly met 2011 levels

Fewer contracts were awarded for 2012, but Mega-relationships supported the market value

BPO ACV and Asia Pacific ACV helped lift Broader Market for 2012

Contract push-out and lingering fiscal uncertainties in both the U.S. and Europe could make for a softer first half in 2013

Outlook for 2013 ACV awards is one of cautious optimism

Market growth, in terms of Annualized Revenue, is projected to be 3 - 4% in 2013

4Q12 TPI Index Summary and Outlook

summary market

outlook market

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*Contracts with ACV ≥ $5M

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Please contact us with your questions and comments.

Learn More

--- Media Contacts ---

► John Keppel President & Chief Marketing Officer +44 (0)7879 432 212 john.keppel@isg-one.com

► Andrew Park Director, ISG +1 919 259 9252 andrew.park@isg-one.com

► Gwennie Poor Cohn & Wolfe for ISG +1 212 798 9842 gwennie.poor@cohnwolfe.com

blog.isg-one.com

Fourth Quarter and Full Year 2012

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*Contracts with ACV ≥ $5M

22

The TPI Index has moved to ACV as the primary measure of the Broader Market. In transition, we will continue to provide a high-level TCV view of the market via a Scorecard analysis.

4Q12 TCV Scorecard

*Contracts with TCV ≥ $25M

4Q12 4Q Y/Y 4Q Q/Q 2012 2012 Y/Y

Scorecard TCV ($B)* Change Change TCV ($B)* Change

Global Market $ 23.4 -33% -10% $ 99.1 -9%

New Scope $ 15.8 -31% -6% $ 66.2 -9%

Restructurings $ 7.6 -35% -16% $ 32.9 -10%

Mega-deals $ 2.4 -78% -59% $ 16.0 -34%

ITO $ 14.1 -40% -16% $ 62.6 -15%

BPO $ 9.3 -17% 3% $ 36.5 1%

Americas $ 7.8 -24% -16% $ 37.5 0%

EMEA $ 12.8 -40% -4% $ 48.6 -22%

Asia Pacific $ 2.8 -7% -13% $ 13.0 31%

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