On our last 1Q12 Global TPI Index conference call, we discussed noteworthy trends in the sourcing market during the first quarter.
Our headlines revealed that:
- By both contract awards and total contract value (TCV), the global commercial outsourcing market dropped quarter-over-quarter and year-over-year. A weak quarter after two consecutive strong quarters is a familiar historical pattern.
- While mega deals nearly vanished, mega relationships held firm . . . the latter mainly consisting of restructurings.
- Restructuring TCV climbed over the same period a year ago, but new scope TCV continued to dwindle.
Both IT outsourcing and BPO contract numbers and TCV waned quarter-over-quarter and year-over-year.
- Europe in particular cooled off. However, Americas TCV improved sequentially, thanks in part to the lone mega deal in the market this quarter.
- ISG believes that the first half of 2012 will be a bit slower than the last half of 2011. However, we expect that second-half activity and TCV will pick up, resulting in full year 2012 TCV awards in line with historical norms.
You can read more details in our press release.
By John Keppel, Partner & President, ISG