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The Tenth
annual 'The world of
deal making for large outsourcing contracts in 2005 saw a slight decline
in signings by total deal value, a reduced number of mega deals valued at
$1bn and higher, and an increase in the number of players competing in
this segment,' said David Tapper, director of Outsourcing, Utility, and
Offshore Services research at Tapper said
vendors would have to radically alter their delivery models, have to
continue to address both business and IT outsourcing going forward. 'There is a shift from
labour-centric contracts to ones that are more automatic and mimic the
online model. Their business
model will have to move in that direction. We're in the midst of a large
global shift to a more complex environment.’ 'They will now need to include
more flexible and newer service capabilities along with globally based
delivery, and develop dynamically different ecosystems of partnerships,'
he said. The study
found that while six players captured 54% of the top 100-contract value in
2004, it took just five players to capture nearly the same amount (53.5%)
in 2005, with __________________________________________________________________________ TPI in a
similar report also pointed the third quarter of 2006 saw a decline in
contracts by volume and value from the same quarter last year. The cause of the falling aggregate
contact values can be tied to the decline in
contract durations, especially for Information Technology Outsourcing
(ITO) contracts. Since 2001,
the average duration of a Broader Market contract has decreased 12%. In ITO, it decreased 18%, while
for Business Process Outsourcing (BPO) it dropped
5%. Fewer
multi-process contracts have been signed so far
in 2006 than in each of the past three years. To date, there have been seven,
compared with 20 in all of 2004, and 11 in 2005. By total contract value (TCV),
multi-process contracts account for only 10% year-to-date, compared with
24% in 2004 and about 12% in 2005. 'There has
been an increasing number of smaller, single-process contracts compared
with larger, multi-process contracts in recent years. This trend holds true for both BPO
and ITO contracts,' said BPO is expected to grow by roughly 10% year-on-year due to
the large number of contracts valued at less than $25M. Although the TCV was lower, BPO
had a great deal of activity in the third quarter with 58 signed contracts
- an increase of more than 23% quarter-on-quarter and more than 26%
year-on-year. The value of
the third-quarter contracts exceeded $4.5 billion, which is up about 9%
quarter-on-quarter, but down 15% year-on-year due to the number of
single-process deals. On the global
service provider landscape, Indian-based providers continued to gain TCV
market share, increasing from nearly 1% in 2004, to slightly over 4% of
the Broader Market bookings so far in 2006. Their shares of awarded contracts
have also increased from about 2% to nearly 8% during the same
period. India-based providers
are beginning to sign business in infrastructure-related areas, and they
have over 25% TCV share in the pure applications development and
maintenance ( |
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EU
IT and Telecom Market to Reach $806 Billion in 2006:
EITO HSBC's
IT spend reaps rich rewards BT
Group in 5 year billing deal with Convergys Mattson
Technology Selects T-Systems to Provide Flexible Hosting
Services Global
Forest and Paper Company UPM Selects IBM as Information Technology
Delivery Partner Convergys
to Outsource Software Development to
Philippines Sun
Life to outsource an 'in-house' call centre Clorox signed a
seven-year, $260M contract with HP |
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India
to amend IT Act to tighten cybersecurity Infrastructure,
civil and political instability affect Sri Lanka's BPO
sector Hewitt
Associates Launch Mobility Operations In
Shanghai Accenture
to Help Confederated Tribes of the Umatilla Indian Reservation Manage its
New IT Company SAIC
Awarded IT Support Contract by the US Health Resources
and BAE
Systems wins $132M Army contract Sytel
has won, USD 28 million IT services contract with the US National
Institutes of Health T-Systems
opens global centre to export IT services -
Brazil |
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