Printable Edition Click Here  :  Subscribe   :   Page  2  : News   :  May 2006 
  Go to page:  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16           Previous Page      Next Page
TPI Index cites strongest-ever first quarter in outsourcing contracts
 
 The outsourcing industry
performed very strongly
in the first quarter,
according to advisory
firm TPI. Total
contract value (TCV) for
contracts worth $50m or
more was up 173% year on
year at $22.7bn. The
quarterly figure
represented a record
number of 83 outsourcing
transactions. TPI’s
latest market
observations are
published in the TPI
Index, a quarterly
report on the state of
the global outsourcing
industry.
   “Restructurings of		 
 first-generation
agreements have had an
increased impact on both
the volume and the value
of contracts in the
broader market this
quarter, with
restructurings
representing 33% of the
TCV signed," said Peter
Allen, partner &
managing director,
market development.
"This compares to 24% of
TCV during the whole of
2005, which was a record
year for
restructurings."
   Restructurings
include renegotiations,
extensions and renewals		 
 to existing agreements.
The 19 contracts
restructured this
quarter were worth
$7.5bn. Contract
restructurings tended to
increase the average TCV
for outsourcing
contracts this quarter.
   Business Process
Outsourcing (BPO) also
saw a distinct increase
this quarter. The number
of BPO transactions was
up 63% year on year,
totalling 49, which
marks an all-time high
for BPO contracts signed
in a single quarter. In
terms of TCV, this
quarter was also strong		 
 with $7.3bn in total BPO
value, significantly
higher than this time a
year ago.
   "In 2005, BPO TCV was
relatively soft, but
both this quarter and
last quarter have shown
a marked rebound, giving
us the best consecutive
two-quarter performance
since early 2004," said
Allen.
   American firms signed
approximately two-thirds
of all BPO contracts in
the marketplace this
quarter, led
predominantly by the
financial services
industry. Financial		 
 services accounts for
more than 30% of total
BPO contracts, and 46%
of the total value
signed.
   TPI's pipeline has
expanded to a record
number of 79
transactions, valued at
more than $22bn in
anticipated awards, an
indicator of strong
potential market
activity in the coming
months.
   		 
 
Is South Eastern Europe the next offshoring frontier?
 
  
   
 
 
 
 
 
 
 
 
 
 
 
 Bulgaria, Slovenia and
Croatia's readiness as
supply-side services
globalisation
destinations and rank
each country's offshore
readiness.
   As services
globalisation evolves,
companies are seeking
relevant, up-to-date
data in order to
evaluate the state of
readiness of developing
countries as locations
and suppliers. Central
Europe has been the
primary beneficiary of
sourcing deals in the
European region, with
Poland, the Czech		 
 Republic and Hungary
leveraging their skilled
workforce and cost
competitive advantages
to garner business from
the United Kingdom and
the European Union. This
has prompted the SEE
countries to hone their
offering in order to
more fully participate
in the services
globalisation arena.
   In its white paper,
"Offshore Readiness of
SEE Countries", neoIT
evaluates the four SEE
countries' abilities to
attract and successfully
implement information
technology outsourcing		 
 (ITO) and business
process outsourcing
(BPO) work. The study
examines each country's
regulations, business
environment,
infrastructure and
resources.
   Of the four
countries, Slovenia
appears to be the most
offshore ready, given
its excellent ICT
(information &
communications
technology)
infrastructure and a
supportive business
environment; however the
country's small labour
pool and high wage rates		 
 could prove to be a
disadvantage. Romania's
strength is its skilled,
cost competitive labour
pool and the relatively
low cost of setting up a
business. Bulgaria has
the lowest wage rates of
the four countries and a
fairly large labour
pool, but has low
supplier maturity.
Croatia was ranked the
least offshore ready of
the four, with a small
labour pool, relatively
high wage rates and low
level of supplier
maturity.
  
   		 
 A new white paper on the
state of readiness of
the South Eastern
European (SEE) region
has been issued by
neoIT, which advises on
outsourcing issues. The
new research findings
look at Romania,		 
  Consulting Times | Page 2 Previous Page     Next Page