Quarterly Research Report Includes Focus on Asian Locations
DALLAS, November 5, 2012 – The global services market saw transaction volumes decline in the third quarter of this year, extending a declining trend to six consecutive quarters, according toMarket Vista: Q3 2012, a quarterly market report by Everest Group, an advisory and research firm on global services. A one-hour webinar will be held Nov. 8, at 9 a.m. CST, to present study findings and insights.
Market Vista: Q3 2012, which analyzes global outsourcing and offshoring activity contracts irrespective of contract value, found third quarter transactions and annual contract volumes fell 8 and 35 percent compared to the second quarter, respectively. The market saw 380 outsourcing deals signed in the third quarter, compared to 472 and 441 during the first and second quarters, respectively. In the third quarter, reported annual contract value (ACV) reached about US$1.4 billion. Both transaction volume and ACV dropped for IT Outsourcing (ITO) and Business Process Outsourcing (BPO).
“In years past, the market saw pent up demand accumulate then propel positive third-quarter activity, but that didn’t happen this year,” said Eric Simonson, managing partner of Research. “The market continues to be affected by the global economy, conservative buyer approaches and, going forward in some regions, the potential outcome of the United States presidential election.”
Other third quarter 2012 findings include:
- There were 35 major deals reported in the third quarter, each valued at over US$50 million in total contract value (TCV), of which three were mega deals valued at over US$1 billion in TCV.
- Apart from the public sector, which accounted for the majority of transactions, the BFSI (banking, financial services and insurance) and MDR (manufacturing, distribution and retail) sectors each held 19 percent of total market volumes.
- Transaction volumes decreased in all regions including traditional markets such as North America and Western Europe; Europe accounted for the majority of contract signings.
- Renewed/restructured deals increased by 36 percent over the previous quarter.
- Activity in the Global In-house Center (GIC) market declined compared to the last quarter with 15 new set-ups and three divestures.
- Location activity decreased with 39 new delivery centers set up across GICs and service providers while activity in tier 2/3 locations was pronounced for the second consecutive quarter.
- Service providers’ consolidated revenues and margins increased in the second quarter of 2012 compared to the previous quarter (Financials lag other service provider activity by one quarter).
Everest Group’s quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, the GIC landscape, and current and emerging locations, as well as 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 the BFSI, MDR, public sector, healthcare, energy and utilities, technology and telecom sectors.
The report also includes these focus sections:
- Asia: analysis of labor arbitrage sustainability, operating costs, wage inflation, arbitrage sustainability and currency trends. Cities profiled include Jaipur, Pune and Bangalore, India; Manila, Philippines; Guangzhou and Shanghai, China; and Kuala Lumpur, Malaysia.
- Location optimization insights include a focus on location preferences in Central and Eastern Europe (CEE); Brazil’s economic stimulus package; access to new talent in tier-2 cities in India; and talent saturation and peso appreciation in the Philippines.
Quarterly Market Vista reports comprise key developments among 20 leading global service providers. Traditional service provider profiles include Accenture, AON-Hewitt, Atos, Capgemini, Convergys, CSC, Dell Services, HP, IBM, Unisys and Xerox. Offshore-centric service provider profiles include Cognizant, EXL, Genpact, HCL, Infosys, Mahindra Satyam, Tata Consultancy Services, Wipro and WNS.
The webinar will be held Nov. 8, at 9 a.m. CST; 3 p.m. GMT Summer Time. To register, please visit: research.everestgrp.com/Events/Webinars.
Market Vista is a subscription service with four reports published per year, including location datasets, Breaking Viewpoint briefings, Market Vista Primer and Global Locations Insights newsletter. For information about the Market Vista: Q3 2012 report or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.