Ten-Year High in Number of Outsourcing Contracts, Total Contract
Value and Annualized Contract Value for First Half of 2008
HOUSTON--(Business Wire)--
TPI, the largest sourcing data and advisory firm in the world and
a unit of Information Services Group Inc. (ISG) (NASDAQ:III, IIIIU,
IIIIW), an industry-leading, information-based services company,
announced today strong growth for the outsourcing industry. According
to the latest TPI Index, which tracks commercial contracts valued
greater than $25 million, the recently-completed second quarter
produced significant market strength and a solid trajectory for growth
during the remainder of the year.
In the second quarter, 146 contracts were awarded in the global
outsourcing industry, valued at $25.6 billion in total contract value
(TCV), and almost $5 billion in annualized contract value (ACV), or
the value of a contract divided by its duration. All three measures
indicate noteworthy market strength as this was the strongest second
quarter performance since 2000. Additionally, each of the past three
quarters has topped the $20 billion TCV mark; this series represents
the best three-consecutive quarter performance ever.
According to TPI's analysis, the industry has seen the highest
number of outsourcing contracts, TCV and ACV during the first half of
2008 in more than 10 years. At the midpoint of the year, TCV in the
broader market is on trajectory to eclipse the TCV record of 2004,
which has been the most prolific full year to date.
Finishing as one of the strongest first halves in more than a
decade is attributed to the 282 contracts valued at nearly $49 billion
in TCV, and nearly $10 billion in ACV that were awarded in the first
half of 2008, yielding a brisk year-over-year increase of 24 percent
by TCV and 36 percent in ACV. Another major factor contributing to the
first-half's record performance is the high number of "new scope"
contract awards - awards that factor out restructurings that reflect
adjustments to existing relationships. The new scope, which signals
that the growth is truly incremental to the market, increased in TCV
and ACV at roughly 26 percent and 43 percent respectively - the
greatest year-over-year increase in the past four years.
"It appears that since the fourth quarter of 2007 and continuing
today, corporate attitude towards cost-reduction has had a new sense
of urgency," said Peter Allen, partner and managing director, TPI.
"Companies across industry segments are expressing their concerns
regarding the uncertain business conditions by taking steps to reduce
operational costs, and the outsourcing industry is benefiting. We see
little to disrupt this outsourcing upswing as we head into the third
quarter, and we may even be looking towards a record year in 2008 for
outsourcing in terms of TCV."
While the Americas and Asia Pacific regions did not have an
appreciable increase in market activity, Europe, the Middle East and
Africa (EMEA), by contrast, experienced 58 percent more TCV in the
first half of 2008 in comparison to the same time-frame in 2007,
significantly contributing to the global TCV record. This was due to
greater average contract size in EMEA rather than a surge in the
number of contracts. In fact, 10 of the 13 mega deals - contracts in
which the TCV is $1 billion or greater - awarded in the first half of
the year were awarded in EMEA, along with 16 of the 24 mega
relationships - those contracts with an ACV of $100 million or more.
For more insight on why outsourcing is showing positive growth and
projections on how long this will last, please join the discussion on
the findings at TPI's blog: www.considerthesourceblog.com.
About TPI
TPI, a unit of Information Services Group, Inc. (ISG) (NASDAQ:III,
IIIIU, IIIIW) is the founder and innovator of the sourcing advisory
industry, and the largest sourcing data and advisory firm in the
world. We are expert at a broad range of business support functions
and related research methodologies. Utilizing deep functional domain
expertise and extensive practical experience, TPI's accomplished
industry experts collaborate with organizations to help them advance
their business operations through the best combination of business
process improvement, shared services, outsourcing and offshoring. For
additional information, visit www.tpi.net.
About Information Services Group, Inc.
Information Services Group, Inc. (ISG) (NASDAQ:III, IIIIU, IIIIW)
was founded in 2006 to build an industry-leading, high-growth,
information-based services company by acquiring and growing businesses
in advisory, data, business and media information services. In
November 2007, the company acquired TPI, the largest independent
sourcing advisory firm in the world. Based in Stamford, Conn., ISG has
a proven leadership team with global experience in information-based
services and a track record of creating significant value for
shareowners, clients and employees. For more, visit
www.informationsg.com.
TPI
Todd Miller, +1-480-235-7018
Market Communications
todd.miller@tpi.net
or
Peppercom
Laura Bower, +1-212-931-6127
lbower@peppercom.com
Copyright Business Wire 2008
