Everest Group Market Vista Reports Q4 2012 Global Sourcing Market Transaction Activity Breaks Six-Quarter Slide | Press Release

Webinar on Feb. 6 to Address Review of 2012 and Outlook for 2013

DALLAS, February 5, 2013 ─ The global services market saw transaction volumes increase in the fourth quarter of 2012 compared to the third quarter, ending a trend of declining transaction activity seen over the previous six consecutive quarters, according to Market Vista: Q4 2012, a quarterly market report by Everest Group, an advisory and research firm on global services. A one-hour webinar will be held Feb. 6, at 9 a.m. CST, during which Peter Bendor-Samuel, founder and chief executive officer of Everest Group, will share his perspectives on the state of the global services industry in 2012 and outlook for 2013.

Market Vista: Q4 2012, which analyzes global outsourcing and offshoring activity and contracts irrespective of contract value, found 2012 fourth quarter transactions and annual contract volumes increased 6 and 47 percent compared to the third quarter of last year, respectively. The market saw 401 outsourcing deals signed with an annual contract value (ACV) of approximately US$2.1 billion. Compared to the third quarter, fourth quarter transaction volume and ACV for IT Outsourcing (ITO) deals rose and Business Process Outsourcing (BPO) deals saw similar transaction volumes but a sharp increase in ACV.

“Pent up demand usually propels third quarter activity, but this activity spike occurred during the fourth quarter and ended a six-quarter slide of declining market transactions,” said Eric Simonson, managing partner of Research. “The market at the end of last year was largely driven by ITO activity in the public sector and BPO activity in the BFSI (banking, financial services and insurance) sector. The fourth quarter also saw significant increases in Global In-house Center (GIC) activity and new delivery centers.”

Other fourth quarter 2012 findings include:

  • There were 47 major deals reported in the fourth quarter, each valued at over US$50 million in total contract value (TCV), of which one was a mega deal valued at over US$1 billion in TCV.
  • The BFSI sector held about 19 percent of total market volumes, similar to the previous quarter, but the MDR (manufacturing, distribution and retail) sector saw sharp increases in both transaction activity and ACV.
  • Transaction volumes remained steady in North America while Europe witnessed an increase in activity over the previous quarter.
  • The GIC market saw 18 new set-ups, compared to 15 in the third quarter, and one divesture.
  • Location activity increased with 45 new delivery centers set up across GICs and service providers. Unlike the second and third quarters last year, the fourth quarter saw more activity in tier-1 locations than in tier-2/3 cities.
  • Service providers’ consolidated revenues decreased in the third quarter of 2012 compared to the previous quarter but margins increased during the same period (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:

  • Emerging geographies: analysis of labor arbitrage sustainability, operating costs, wage inflation, arbitrage sustainability and currency trends. Cities profiled include Johannesburg, South Africa; Ho Chi Minh, Vietnam; Port Louis, Mauritius; Bangkok, Thailand; Montevideo, Uruguay; Bogota, Colombia; Casablanca, Morocco; and Cairo, Egypt.
  • Location optimization insights include focus on impact of recent adoption of data privacy laws in Philippines and Malaysia; United Kingdom contact data center work moving to north of England and nearshore locations; sizeable GCC outsourced contact center market growth and trends; and developed infrastructure and government incentives fuelling growth in tier-2 cities in China.

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 Feb. 6, 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: Q4 2012report or other research services, please visit research.everestgrp.com, e-mail [email protected] or call +1-214-451-3110.

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