The global outsourcing industry is constantly evolving through new contracting award characteristics and an expanding universe of successful service providers. ISG's TPI Index helps industry participants, enterprises and organizations keep pace and capitalize from the latest data on outsourcing trends. It is the authoritative source for marketplace intelligence related to outsourcing: transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

1. The TPI EMEA Index
EMEA Outsourcing Market Data and Insights
First Quarter 2012
Hosted by:
Marc Geall,
Deutsche Bank Software and IT
Services Team
April 16, 2012

2. 2
Welcome to the 37th Quarterly Outsourcing Index Call
Covering the state of the outsourcing industry for global, commercial contracts
with total contract value greater than €20 million.
Duncan Aitchison
Partner & President
North Europe, ISG
Bernd Schaefer
Partner & Managing Director,
ISG Germany
John Keppel
Partner & President Research
© 2012 & Managed Services
Information
Services Group, Inc.
and Chief Marketing Officer,
All Rights Reserved ISG
ISG-one.com
*Contracts with TCV > €20M

3. 3
At A Glance
“
GLOBAL BROADER MARKET AWARDS AND TCV DROPPED
ON THE HEELS OF RECORD 2011 RESULTS
RESTRUCTURINGS NOTABLY ↑ Y/Y, WHILE
NEW SCOPE TCV CONTINUES TO DECLINE
EMEA TCV DECLINES ON DEARTH OF LARGE DEALS
AMERICAS TCV ↑ Q/Q
“
STRONG RESULTS INCLUDE THE LONE 1Q11 MEGA DEAL
1Q12 TCV Q/Q 1Q Y/Y 1Q12 Q/Q 1Q Y/Y
Score Card (€B) Change Change Counts Change Change
Global Market € 14.9 -35% -22% 184 -18% -31%
Mega Deals € 1.2 -83% -93% 1 -80% -67%
New Scope € 8.5 -45% -46% 137 -23% -35%
Restructurings € 6.4 -13% 82% 47 2% -18%
ITO € 10.0 -37% -20% 120 -22% -29%
BPO € 4.9 -30% -20% 64 -11% -34%
© 2012
EMEA € 6.9 -53% -32% 79 -23% -37%
Information
Services Group, Inc. Asia Pacific € 1.4 -33% -36% 18 flat -55%
All Rights Reserved
Americas € 6.6 8% -3% 87 -16% -14%
ISG-one.com
*Contracts with TCV > €20M

4. 4
Global Broader Market Contract Award Trends
1Q12 TCV declined a substantial 35% Q/Q and 22% Y/Y, not unusual after a strong
third and fourth quarter 2011.
Quarterly TCV (€B)* Comparison
↓35%
€ 22.5 € 19.8 € 21.7 € 22.9
€ 17.4 € 19.2 € 15.7
€ 14.7 € 14.9
1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
The TCV Hangover Effect - Previous Quarterly Precedence
2 Prior
2 Prior
Qtrs Avg
Qtrs Avg
€ 23.9
€ 22.8
↓27%
↓40%
€ 23.2 € 25.3 € 22.5
€ 22.5
€ 17.4
© 2012
€ 13.8
Information
Services Group, Inc.
All Rights Reserved 4Q05 1Q06 2Q06 4Q09 1Q10 2Q10
ISG-one.com
*Contracts with TCV > €20M

5. 5
EMEA Contract Award Trends
1Q12 TCV was down 53% Q/Q and 32% Y/Y. The ‘hangover’ effect and,
potentially, Eurozone financial concerns impacted results.
Quarterly TCV (€B)* Comparison
€ 14.6
€ 9.8 € 10.1
€ 7.3 € 6.9
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q11 1Q12
New Scope Quarterly TCV (€B)* Comparison Comparison
vs. Restructuring TTM TCV (€B)*
New Scope TCV Restructuring TCV
2Q11-1Q12 € 25.4 € 17.0
2Q10-1Q11 € 26.1 € 9.5
2Q09-1Q10 € 30.8 € 7.0
© 2012 2Q08-1Q09 € 25.0 € 9.7
Information
Services Group, Inc.
All Rights Reserved
2Q07-1Q08 € 31.3 € 3.8
ISG-one.com
*Contracts with TCV > €20M

6. 6
EMEA Country Details in Contract Award Trends
With the exception of a steady performance in DACH, and some activity in E.
Europe, EMEA sub-regions were down from their Prior Five-Like-Quarter averages.
Sub-Regional Like-Quarter TCV (€B)* Comparison
Prior 5 Period Range Average 1Q11 1Q12
€ 5.0
€ 4.5
€ 4.0
€ 3.5
€ 3.0
€ 2.5 € 2.5
€ 2.0
€ 1.5
€ 1.3 € 1.4
€ 1.0 € 1.0
€ 0.5
€ 0.2 € 0.2 € 0.1
€- € 0.1
UK & Scandinavia Benelux DACH France Southern Africa & E. Europe &
© 2012 Ireland Europe Middle East Russia
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > €20M

7. 7
EMEA Mega Deals & Relationships Trends
Only one was signed in 1Q, an ITO mega deal in the Americas valued at €0.8B.
EMEA 1Q12 Mega Relationship counts were the 3rd highest in three years.
Mega Deal TCV (€B)* Comparison
TCV (B) Counts
4
3
2 2 2 2
1 1 1 1 1
€ 6.2
€ 4.7 € 4.7 € 5.8
€ 3.6
€ 1.6 € 2.5 € 1.8
€ 1.2 € 0.9 € 0.8
0 0
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Mega Relationship ACV (€B)* Comparison
ACV (B) Counts
9 8
6 75% of 1Q Mega
3 4 3 3 3 4
1 1 2 2 Relationships are
Restructurings
€ 1.1 € 0.9 € 1.4
€ 0.7 € 1.0 € 1.1
© 2012 € 0.3 € 0.1 € 0.2 € 0.3 € 0.3 € 0.6 € 0.4
Information
Services Group, Inc.
All Rights Reserved 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
ISG-one.com
*Contracts with TCV > €20M

8. 8
EMEA ITO Contract Award Trends
EMEA ITO experienced Q/Q decreases of 38% in counts and 58% in TCV. The lack
of large deals meant that 1Q12 was the weakest ITO quarter for TCV since 3Q06.
Quarterly TCV (€B)* Comparison Top ITO Providers
by TTM TCV
€ 10.1
€ 8.6 New Scope Restructuring
€ 6.7 Accenture Atos
€ 5.8
€ 4.2 Atos BT
BT Capgemini
Capgemini CSC
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q11 1Q12 Capita HCL
CSC Hexaware
TTM New Scope vs. Restructuring TCV (€B)* Dimension HP
Data IBM
New Scope TCV Restructuring TCV Fujitsu Infosys
2Q11-1Q12 € 16.9 € 12.9 HCL T-Systems
HP
2Q10-1Q11 € 19.8 € 7.6 IBM
2Q09-1Q10 € 25.2 € 6.1 Infosys
TCS
2Q08-1Q09 € 16.9 € 9.0
T-Systems
© 2012
Information
2Q07-1Q08 € 20.1 € 2.9 Wipro
Services Group, Inc.
All Rights Reserved
Note: Service providers in alphabetical order; no rankings implied.
ISG-one.com Placements based on 2011 TCV commercial contract awards sourced from ISG contracts database.
*Contracts with TCV > €20M

9. 9
EMEA BPO Contract Award Trends
BPO saw a Q/Q increase of 26% in counts but a decrease of 42% in TCV. Against
two 4Q11 Mega Deals, the TCV compare is tough.
Quarterly TCV (€B)* Comparison
Top BPO Providers
€ 4.5
by TTM TCV
€ 3.5
€ 2.6 TCS
€ 1.6 Accenture
€ 1.1
Capgemini
Capita
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q11 1Q12
Carillion plc
Convergys
TTM New Scope vs. Restructuring TCV (€B)* HCL
HP
New Scope TCV Restructuring TCV Infosys
2Q11-1Q12 € 8.5 € 4.1 Johnson Controls
Logica
2Q10-1Q11 € 9.4 € 4.0
Sabre
2Q09-1Q10 € 6.8 € 3.3 Sodexho
2Q08-1Q09 € 6.5 € 3.4
Xchanging
Xerox
© 2012 2Q07-1Q08 € 6.3 € 1.9
Information
Services Group, Inc.
All Rights Reserved
Note: Service providers in alphabetical order; no rankings implied.
ISG-one.com Placements based on 2011 TCV commercial contract awards sourced from ISG contracts database.
*Contracts with TCV > €20M

10. 10
EMEA Industry Details in Contract Award Trends
With the exception of a record high 1Q in Manufacturing, all EMEA industry sectors
performed under their Prior Five-Like-Quarter TCV averages.
Industry Like-Quarter TCV (€B)* Comparison
Prior 5 Period Range Average 1Q11 1Q12
€ 5.0
€ 4.5
€ 4.0
€ 3.5
€ 3.0
€ 2.5 € 2.5
€ 2.2
€ 2.0
€ 1.5
€ 1.0
€ 0.5 € 0.7
€ 0.4 € 0.5 € 0.4
€ 0.2 € 0.0
€-
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > €20M

11. 11
Asia Pacific Contract Award Trends
AP contracting counts were flat Q/Q. However, TCV was down by one-third both
Q/Q and Y/Y, ending up well below the recent first-quarter average.
Quarterly TCV (€B)* Comparison
€ 2.2 € 2.1
€ 1.3 € 1.4
€ 1.1
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope vs. Restructuring TTM TCV (€B)* Comparison
New Scope TCV Restructuring TCV
2Q11-1Q12 € 4.5 € 2.1
2Q10-1Q11 € 7.0 € 2.0
2Q09-1Q10 € 7.2 € 2.5
© 2012 2Q08-1Q09 € 7.9 € 1.0
Information
Services Group, Inc. 2Q07-1Q08
All Rights Reserved
€ 6.1 € 1.2
ISG-one.com
*Contracts with TCV > €20M

12. 12
Americas Contract Award Trends
Americas TCV rose 8% Q/Q, making it one of the three highest quarters since the
beginning of 2010. Americas posted the only 1Q12 Mega Deal.
Quarterly TCV (€B)* Comparison
€ 11.7
€ 7.5 € 6.8 € 6.2 € 6.6
1Q09 2Q 3Q 4Q 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 4Q 1Q12
New Scope vs. Restructuring TTM TCV (€B)* Comparison
New Scope TCV Restructuring TCV
2Q11-1Q12 € 16.6 € 9.6
2Q10-1Q11 € 18.8 € 7.7
2Q09-1Q10 € 21.2 € 12.4
© 2012 2Q08-1Q09 € 20.2 € 6.9
Information
Services Group, Inc.
All Rights Reserved 2Q07-1Q08 € 19.2 € 6.2
ISG-one.com
*Contracts with TCV > €20M

13. 13
Anticipating Increased Global Restructuring Volume
Contract expirations are occurring at a faster rate as the result of dramatically
increased transaction counts and declining average contract durations.
Trends Impacting Restructuring Volumes
↑ 250% 933 Contract Awards
6
5 Average Duration
377 ↓ 1 Yr.
2002 2011
Record Levels of Expiring Contracts
↑ 20% Y/Y
690
570
310
© 2012
Information
Services Group, Inc.
All Rights Reserved
2007 2011 2012e
ISG-one.com
*Contracts with TCV > €20M

14. 14
Motivations Behind Pre-emptive Renegotiation Efforts
Contract renegotiations can be driven by either the client or the service provider,
but the leverage is, more often than not, with the Client.
Client Motivations Provider Motivations
Increase Scope or Service Levels Chance for Sole Sourced Renewal
Reduce Price for Existing Scope Retain Full Scope
Add Emerging Services Introduce New Services
© 2012
Information
Restructuring creates the opportunity for Best-of-Breed providers to win
Services Group, Inc.
All Rights Reserved new clients looking for targeted solutions
ISG-one.com
*Contracts with TCV > €20M

15. 15
Who will win these restructurings?
Applying the 80/80 rule: 80% of the time a deal is renegotiated with the
incumbent provider, and they typically retain about 80% of the scope.
2012 Restructuring
by Provider Share of ACV
37%
32%
18%
13%
Americas Heritage Niche Providers India Heritage Major European
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > €20M

16. 16
1Q12 TPI Index Summary and Outlook
Global Broader Market ↓1Q12 loses momentum aŌer two
quarters of impressive growth
Restructuring TCV ↑ Y/Y, not enough to make up for New
market Scope declines
summary
Shortfall in previously robust EMEA TCV had the greatest
impact on the global market
EMEA ITO values at their lowest since 2Q06; BPO TCV ↓
while contract numbers ↑ Q/Q
market Look for a soft first half 2012 and a reviving second half
outlook Restructuring 2H12 activity may lead an upswing in the
overall market
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com
*Contracts with TCV > €20M

17. 17
Learn More
Please contact us with your questions and comments.
► John Keppel ► Duncan Aitchison
Partner & President Research & Partner & President
Managed Services and Chief North Europe, ISG
Marketing Officer +44 (0)1628 21702
+44 (0)7879 432 212 duncan.aitchison@isg-one.com
john.keppel@isg-one.com
► Paul Reynolds
Chief Research Officer,
ISG Momentum
+1 508 625 2194
paul.reynolds@isg-one.com
--- Media Contacts ---
► Denise Colgan ► Louise Fernley
Marketing Director, EMEA, ISG Cohn & Wolfe for ISG
+44 1737 371523 +44 207 331 5365
denise.colgan@isg-one.com louise.fernley@cohnwolfe.com
© 2012
Information
Services Group, Inc.
All Rights Reserved
ISG-one.com www.considerthesourceblog.com
*Contracts with TCV > €20M

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