Total outsourcing transactions climb, while set-ups and expansions of Global In-house Centers fall slightly in Q4.
DALLAS, February 25, 2014 — As the global outsourcing market reached its highest quarterly transaction volume since Q1 2012, Europe continued to exert dominance by posting a significant increase in outsourcing transactions over Q3. Meanwhile, North America witnessed a decrease in transaction volumes for the quarter. Europe also overtook North America as the region accounting for the largest percentage of major deals.
These findings and others are detailed in a new research report published by Everest Group, an advisory and research firm on global services. The report, Market Visa™: Q4 2013, focuses on global outsourcing transaction trends, including details of major outsourcing deals, GIC (global in-house center) developments, global offshoring dynamics, location risks, and key service provider developments.
“Gradual economic recovery and improving business conditions in Europe are fueling steady growth in the global outsourcing services market as a whole,” said Salil Dani, practice director in the Global Sourcing team at Everest Group. “Europe led the world in outsourcing transactions, was among the top regions for GIC set-ups and expansions in Q4, and also reported more forthcoming set-ups and expansions than any other region.”
Two megadeals for information technology outsourcing (ITO) services were signed worldwide in Q4. IBM signed a US$1.3 billion deal, and Steria inked a contract worth US$1.0 billion. Forty-three (43) major deals (total contract value exceeding US$50 million) were reported in Q4 compared to 36 in Q3, with medium-term deals (terms of 5-7 years) accounting for the largest percentage (40) of deals signed in Q4.
The Q4 2013 report also highlights new opportunities in Trinidad & Tobago and a growing value proposition for complex work such as Legal Process Outsourcing (LPO) in South Africa. The report spotlights the continued macroeconomic challenges in Argentina, driven by high wage inflation and rapid currency depreciation.
Apart from analyzing the above-mentioned trends, the report contains extensive data on outsourcing transactions, setups and expansions of GICs and service provider delivery centers, and detailed profiles of the top 20 service providers. 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.
Emerging geographies are profiled as well; the report compares advantages, risks, operating costs, labor arbitrage sustainability, real estate inflation, and currency exchange rate movements. Cities profiled include Johannesburg, South Africa; Ho Chi Minh, Vietnam; Port Louis, Mauritius; Bangkok, Thailand; Montevideo, Uruguay; Bogota, Colombia; Casablanca, Morocco; Cairo, Egypt; Guatemala City, Guatemala; and San Salvador, El Salvador.
Market Vista is a subscription service with four reports published annually, complemented by buyer geography and industry trend reports. For information about the Market Vista: Q4 2012 report or other research services, please visit research.everestgrp.com, e-mail info (at) everestgrp (dot) com or call +1-214-451-3110.
Market Vista Webinar: Everest Group hosted a one-hour webinar covering this Market Vista report. The webinar document and replay will be available.