DALLAS and GURGAON ─ The North American outsourcing market witnessed a 15 percent decrease in transaction volume during the first quarter this year compared to the previous quarter, according to the Market Vista: Q1 2009 report on global outsourcing and offshoring activity by the Everest Research Institute. Everest analysts will hold a one-hour Webinar on May 19, 9 a.m. CST, to present study findings and insights.
Comparing Q1 2009 to Q4 2008, the study findings include:
- The global outsourcing market decreased 7 percent in transaction volume, and ACV dropped 16 percent from US $3.55 billion to $2.97 billion.
- While most industries signed fewer outsourcing deals in the first quarter, the banking and financial services sector witnessed 30 percent growth in transactions, dominated by increased activity in Europe and led by the ITO market.
- The government sector dropped sharply with transaction volume falling 35 percent.
- BPO activity dropped 15 percent in transaction volumes.
- Europe witnessed a reduction in transaction volumes, although ACV was higher than Q4 primarily due to a few large deals signed in the region.
“While the American outsourcing market declined, the BFSI market saw an increase in activity, primarily driven by European financial services companies,” said Eric Simonson, Managing Principal, Everest Research Institute. “We believe that overall market activity is likely to see an uptick by the fourth quarter this year and onward.”
The Institute’s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations, key supplier developments, and key developments across the top 20 financial services companies globally. The Market Vista Q1 report also includes special sections on industry-specific FAO and an analysis of the outsourcing market in Eastern Europe.
Other insights for first quarter 2009 activity include:
- Captives activity included 20 new announcements in Q1, compared to 22 in each of the previous two quarters.
- Asia continues to dominate offshore delivery, and Tier-II cities continue to hold preference with new centers arising in locations such as Iloilo City and Bacolod in Philippines and Gdansk, Lublin and Poznan in Poland.
- Potential near-term risk issues arose in Mexico, El Salvador, Poland and Thailand.
- Aggregate US$ revenues across the Market Vista Index of suppliers declined by 2.2 percent on the heels of a 2.5 percent decline in the previous quarter. Revenues of traditional global suppliers declined by 2.2 percent and declined 2.3 percent for offshore-centric suppliers.
Quarterly Market Vista reports include key developments among 20 leading global suppliers. Traditional supplier profiles include Accenture, ACS, Atos Origin, Capgemini, Convergys, CSC, EDS, Hewitt, IBM, Perot Systems and Unisys. Offshore-centric supplier profiles include Cognizant, EXL, Genpact, HCL, Infosys, Tech Mahindra, Tata Consultancy Services, Wipro and WNS.
The 45-minute Webinar, followed by 15 minutes of questions and answers with participants, will take place on May 19 at 9 a.m. CDT; 10 a.m. EDT; 3 p.m. GMT Standard Time; 7:30 p.m. India Standard Time.