News 24/7 - IT industry news for Indian IT professionals
BPO business looking up, while IT outsourcing dips, says Everest
Wednesday, 4th May 2011

The global outsourcing and offshoring market continued to witness steady growth during the first quarter of 2011, led by Business Process Outsourcing (BPO) transactions, according to Everest Group, an advisory and research firm on global services. This activity in the BPO market was driven by Banking, Financial Services and Insurance (BFSI), Manufacturing, Distribution and Retail (MDR), and Healthcare industry verticals. While outsourcing transactions saw a marginal decrease in ACV of five percent as compared to Q4 2010, while it increased by 14 percent compared Q1 2010.

Everest Group�s Market Vista: Q1 2011, a quarterly report on global outsourcing and offshoring activity, reports that in the first quarter global transaction witnessed 508 new transactions, accounting for about US$3 billion in annual contract value (ACV). Moreover, the captive market witnessed 35 new captive announcements in Q1, majority of these in India, followed by other countries in Asia and the Middle East.

Other first quarter 2011 findings include:

� Decrease in overall market activity largely due to reduced activity in the ITO market

� ACV decreased by 17% compared to Q4 2010. The Public Sector vertical continued to dominate ITO transactions, with one-fourth of the ITO deals signed in this vertical

� All geographies showed positive trends in the BPO market, whereas the ITO market activity only increased in the United Kingdom

�Volume of renewals and restructured deals increased by 10 percent from Q4 2010, but ACV of the deals dropped 17 percent

�There were four mega deals (contract value >US$1 billion) signed in Q1 2011, three of which were ITO contracts. 17 very large deals with contract values between US$200 million -1 billion were also recorded during the quarter

�Brazil has been elevated to the category of �Mature Locations� in the Everest Market Vista Location Maturity Heatmap, an elite group previously consisting of India, the Philippines and China. The country offers multiple opportunities to players in functions such as IT-ADM, IT-infrastructure, and R&D/engineering services

�Overall location activity remained same compared to Q4 2010 with 18 new centers. While activity increased slightly for offshore centric service providers, it fell marginally for traditional service providers

�While the global sourcing market continues to show steady growth in terms of BPO deals, transactional volume seems to have gone down in the first quarter, this decrease in activity in overall market is largely due to reduced activity in the ITO �said Eric Simonson, Managing Partner of Research. �However, it is interesting to note that around one-fourth of these reported ITO deals were signed in the public sector, which shows the relevance of this sector as a growth generator� he added

Salil Dani, Research Director, Everest Group, said, �India has started to play a key role as one of the buyer geographies. While North America and Europe continued to dominate transaction activity, India-based buyer organizations also reported activity with 20 contracts signed during the first quarter. Some of the notable deals included BSNL�s ITO and BPO contracts with CMS Infosystems and HCL as well as Tata Teleservices� BPO agreement with Intelenet.�

Everest Group�s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations and key service provider intelligence insights. Everest Group�s industry trends research complements the Market Vista reports through quarterly updates focused on industry specific global sourcing data, developments and insights across four industries (BFSI, MDR, Healthcare and Energy and Utilities).

TAGS : bpo  ito  everest  outsourcing  


Post Comments
Recent Comments
Subscribe to newsletter

follow us on :

Subscribe :

  © 2010 All rights reserved