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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
1
Hosted by:
John King
Bank of America Merrill Lynch
18 April 2016
The ISG Outsourcing Index®
First Quarter 2016
EMEA Market Data and Insights
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
2
Covering the state of the outsourcing industry for EMEA commercial contracts.*
Welcome to the 54th Quarterly ISG Outsourcing Index® Review
Bernd Schaefer
Partner
John Keppel
Partner & President
*Contracts with ACV ≥ €5M from the ISG Contracts Knowledgebase®
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At a Glance
GLOBAL MARKET ACV UP 20% Y/Y
WITH SMALLER AWARDS DRIVING MARKET GROWTH
NUMBER OF RESTRUCTURING AWARDS SETS QUARTERLY RECORD,
WHILE RESTRUCTURING ACV SURGES ALMOST 50% Y/Y
AMERICAS UP 30% ON BEST QUARTERLY PERFORMANCE IN FOUR YEARS
EMEA UP 19% Y/Y WITH STRONG SHOWING IN THE RESTRUCTURING MARKET
ASIA PACIFIC ACV AND NUMBER OF AWARDS DOWN Y/Y;
EXTENDED WEAKNESS ACROSS MANY GEOGRAPHIC MARKETS
Scorecard 1Q16 1Q Y/Y 1Q Q/Q 1Q16 1Q Y/Y 1Q Q/Q
ACV (€B)* Change Change Counts Change Change
Global Market Totals € 4.9 20% -12% 404 32% 13%
Mega-relationships € 0.9 -3% -49% 5 -29% -38%
By Type New Scope € 2.6 4% 0% 231 11% 3%
Restructurings € 2.2 48% -23% 173 78% 31%
By Scope ITO € 3.4 24% -21% 301 51% 20%
BPO € 1.5 12% 17% 103 -4% -2%
By Region Americas € 2.2 30% 6% 217 49% 47%
EMEA € 2.2 19% -26% 160 28% -6%
Asia Pacific € 0.4 -13% -4% 27 -23% -29%
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
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Global Market ACV is up 20% Y/Y, and smaller awards drive market growth;
ACV approaches €5B level, while number of awards exceeds the 400 mark.
Broader Market Quarterly ACV (€B)*
Broader Market Quarterly Contract Counts
Global Market Contract Award Trends
€ 4.9
€ 5.5
€ 4.4
€ 4.9
€ 4.1
€ 5.3
€ 4.6
€ 5.4€ 5.2
€ 4.0
€ 5.1
€ 3.2
€ 4.9€ 4.6€ 4.8€ 5.2
€ 5.9€ 6.1
€ 5.5
€ 3.8
€ 19.7€ 19.4
€ 17.5
€ 19.6
€ 21.2
1Q164Q3Q2Q1Q154Q3Q2Q1Q144Q3Q2Q1Q134Q3Q2Q1Q124Q3Q2Q11
Quarterly ACV TTM ACV Totals
404
356336
446
306
387
295
376358
325
378
233
323313
263
313
370
332313
275
1542
1364129412121290
1Q164Q3Q2Q1Q154Q3Q2Q1Q144Q3Q2Q1Q134Q3Q2Q1Q124Q3Q2Q11
Quarterly Counts TTM Count Totals
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EMEA ACV rises 19% Y/Y due to a surge of Restructuring activity that ranks among
some of the best results ever; both BPO and ITO markets made slight Y/Y gains.
EMEA Quarterly Counts
EMEA Contract Award Trends
EMEA Quarterly ACV (€B)*
EMEA First-Quarter Segment ACV (€B)*EMEA Trailing 12 Months ACV (€B)*
€ 1.22
€ 1.03
€ 1.48
€ 0.77
€ 0
€ 1
€ 2
€ 3
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q15 1Q16
€ 2.25
€ 3.03
€ 1.89
€ 2.71
€ 2.21
€ 2.89
€ 2.01
1Q161Q151Q141Q131Q122Q11
160
170
125
174
147
161
123
1Q161Q151Q141Q131Q122Q11
€ 9.65€ 9.30€ 9.87€ 9.50
€ 11.87
637
592
647
560
602
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
TTM ACV Totals TTM Count Totals
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6
U.K. and France inch up Y/Y, while Nordics and Southern Europe make larger gains.
DACH market ACV down Y/Y though number of DACH awards increases over 30% Y/Y.
EMEA Sub-Regions First-Quarter ACV (€B)*
EMEA Industry First-Quarter ACV (€B)*
EMEA Contract Award Trends Detail
€ 0.89
€ 0.28
€ 0.55
€ 0.09 € 0.12 € 0.10
€ 0.22
€ 0.01€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
€ 1.4
U.K. & Ireland DACH Nordics Benelux France Africa &
Middle East
Southern
Europe
E. Europe &
Russia
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
€ 0.67
€ 0.50
€ 0.26 € 0.25 € 0.23
€ 0.05 € 0.10 € 0.12 € 0.08
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
€ 1.0
€ 1.2
Financial
Services
Manufacturing Telecom &
Media
Travel,
Transport &
Leisure
Energy Business
Services
Consumer
Packaged
Goods
Retail Healthcare &
Pharma
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
7
Firstsource Solutions*
FleetCor*
GFI Informatique*
ISON Group
Luxoft
Mindtree
NGA HR*
Transcom
VirtusaPolaris
WNS
Co. Revenues < $2 B
Capita
Ceva Logistics
CGI
G4S*
HCL
Infosys
Jones Lang LaSalle*
MITIE
Serco
Wipro
Co. Revenues $2 -10 B
Accenture
Atos
BT
Capgemini
Cognizant
HPE
IBM
ISS Global*
TCS
T-Systems
ISG Sourcing Market Standouts in EMEA
The Breakthrough 10 category experiences 40% turnover during the quarter as
several Service Providers featured on the Leader Board re-enter the Top 10 lists.
*New to group as of the current quarter
Placements based on ACV of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®.
Service providers in alphabetical order; no rankings implied.
Revenues sourced from Hoovers and individual company financial fillings
Co. Revenues > $10 B
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
The Big 10
Sourcing Standouts
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
8
Americas Quarterly Counts
Americas Contract Award Trends
Americas Quarterly ACV (€B)*
Americas First-Quarter Segment ACV (€B)*Americas Trailing 12 Months ACV (€B)*
Americas ACV rises 30% Y/Y as Restructuring activity achieves record-setting levels;
ITO ACV was best in four years, and number of ITO awards was second-best ever.
217
148146
134142
177
119
1Q161Q151Q141Q131Q122Q11
€ 2.2
€ 2.1
€ 1.7€ 1.7
€ 2.2
€ 2.6
€ 1.5
1Q161Q151Q141Q131Q122Q11
€ 8.4€ 7.9
€ 5.5
€ 7.2€ 7.6
756
616
488483
555
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
TTM ACV TTM Counts
€ 1.10 € 1.14
€ 1.71
€ 0.54$0.5
$1.0
$1.5
$2.0
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q15 1Q16
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U.S. ACV makes best showing in four years; the number of awards sets record high;
best quarter in 10 years for Financial Services as ACV soars 80% Y/Y.
Americas Sub-Regions First-Quarter ACV (€B)*
Americas Industry First-Quarter ACV (€B)*
Americas Contract Award Trends Detail
€ 0.55
€ 0.33
€ 0.19
€ 0.39
€ 0.17
€ 0.12
€ 0.18 € 0.20
€ 0.12
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
Financial
Services
Manufacturing Telecom &
Media
Healthcare &
Pharma
Business
Services
Energy Consumer
Packaged
Goods
Retail Travel,
Transport &
Leisure
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
€ 0.06 € 0.05
€ 0.01
€ 0.03
$0.0
$0.2
$0.4
Canada Brazil Mexico Other LatAm
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
€
2.10
€ 0.0
€ 0.5
€ 1.0
€ 1.5
€ 2.0
€ 2.5
U.S.
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10
Asia Pacific ACV slips 13% from a modest Q1 compare with number of contracts also
falling; both New Scope and Restructuring ACV lag Y/Y.
Asia Pacific Quarterly Counts
Asia Pacific Contract Award Trends
Asia Pacific Quarterly ACV (€B)*
Asia Pacific First-Quarter Segment ACV (€B)*Asia Pacific Trailing 12 Months ACV (€B)*
€ 1.69
€ 2.20€ 2.15
€ 2.85
€ 1.67
149156159
169
133
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
TTM ACV TTM Counts
€ 0.33
€ 0.06
€ 0.19 € 0.19
€ 0.0
€ 0.2
€ 0.4
€ 0.6
€ 0.8
New Scope Restructuring ITO BPO
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs
1Q15 1Q16
€ 0.38€ 0.44
€ 0.84
€ 0.45€ 0.42
€ 0.30
1Q161Q151Q141Q131Q122Q11
27
3835
50
343233
1Q161Q151Q141Q131Q122Q11
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
11
One large mega award helps support ANZ and Manufacturing short-term growth;
remaining geographic and vertical markets in Asia Pacific struggle to gain traction.
Asia Pacific Sub-Regions First-Quarter ACV (€B)*
Asia Pacific Industry First-Quarter ACV (€B)*
Asia Pacific Contract Award Trends Detail
€ 0.22
€ 0.02
€ 0.07
€ -
€ 0.06
€ -€ 0.00
€ 0.05
€ 0.10
€ 0.15
€ 0.20
€ 0.25
€ 0.30
ANZ India and South
Asia
Japan Greater China Southeast Asia South Korea
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
€ 0.05 € 0.04
€ 0.01
€ 0.21
€ 0.04
€ -
€ 0.03
€ 0.01 € -€ 0.0
€ 0.1
€ 0.2
€ 0.3
Financial
Services
Telecom &
Media
Travel,
Transport &
Leisure
Manufacturing Energy Consumer
Packaged
Goods
Business
Services
Retail Healthcare &
Pharma
Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
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Special Topic First Quarter 2016
PUBLIC SECTOR OUTSOURCING
John Keppel
Partner & President
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
13
Relative to the Commercial Sector, Public Sector sees strong five-year growth. Most
ACV is generated by ITO awards, with BPO ACV varying by geography.
Public Sector Trailing 12 Months Counts
Global Public Sector Award Trends
1,542
1,364
1,290
1,6361,629
1,006
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
Commercial Sector Public Sector
Public Sector Trailing 12 Months ACV (€B)*
Public Sector ITO vs. BPO TTM ACV (€B)*
3.25
4.28
3.19
3.77
Average Deal Size and Duration TTM Compare
Avg. Duration in Yrs.
Avg. Contract Value (€K)
€ 19.7
€ 52.5
€ 41.9
€ 32.9€ 29.6
€ 25.2
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
Commercial Sector Public Sector
€ 41.4
€ 31.2
€ 25.7
€ 21.3€ 19.5
€ 11.1€ 10.8
€ 7.2€ 8.2€ 5.8
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
Public Sector ITO ACV Public Sector BPO ACV
€ 12.8
€ 16.4
€ 32.1
€ 25.1
2Q15 -
1Q16
2Q14 -
1Q15
2Q13 -
1Q14
2Q12 -
1Q13
2Q11 -
1Q12
Commercial Sector Public Sector
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
14
Global Public Sector Award Trends
North America, led by federal government IT spending, accounts for a large share of
sourcing. Average deal values increase, whereas durations shorten.
Share of Public Sector ACV for Trailing 12 Months
Top Public Sector Providers
in Recent 12 Months
58%
17%
5% 3%
17%
U.S. &
Canada
U.K. Continental
Europe
ANZ Other
*New to List for 2016
Service providers in alphabetical order; no rankings implied.
Placements based on counts of public sector contract awards sourced from ISG Contracts Knowledgebase ®.
U.S. & Canada ANZ
U.K. Continental Europe
Booz Allen Hamilton*
CACI*
HPE*
Lockheed Martin
Northrop Grumman
Raytheon
Science Applications
BT
Capgemini*
Capita
Carillion
CGI
Fujitsu*
G4S*
HPE
Accenture
Atea
Atos
BT*
Capgemini
HPE
Indra Sistemas
Accenture
Boeing
Harris Corp.
HPE*
IBM
Raytheon*
SingTel Optus*
Telstra*Public Sector Regional ITO vs. BPO % TTM
79%
31%
88%
76%
21%
69%
12%
24%
U.S. & Canada U.K. Continental
Europe
ANZ
ITO ACV BPO ACV
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€ 31.4
€ 24.0
€ 15.4
€ 5.8
€ 3.0€ 4.7
€ 0.9€ 0.9€ 1.2
€ 0.3€ 0.7€ 0.6
€ 13.0
€ 6.1
€ 4.1
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
Local
Government
Public
Healthcare
Other Federal
Government
Department of
Defense
U.S. Public Sector Contract Award Details
Department of Defense (DoD) ITO dominates the U.S. Public Sector sourcing;
Health and Human Services (HHS) and Homeland Security (DHS) remain active.
% of DOD
Consortium
Contracts up
17 percentage pts
in Recent 12 Months
Local Government
Capgemini
Dell
Harris
HPE
Verizon
Public Healthcare
Atos
Booz Allen Hamilton
HPE
ICF International
Kelly Services
Other Federal
Government
Accenture
CSC
HPE
Raytheon
Science Applications
DoD Single Provider
General Dynamics
Lockheed Martin
Northrop Grumman
Science Applications
Raytheon
DoD Consortium
Participation**
BAE Systems
Booz Allen
General Dynamics
Leidos
Lockheed Martin
U.S. Activity Details by Sub-Sector
U.S. Public Sector Activity for Last 3 TTMs Top U.S. Public Sector Providers for the
Most Recent 12 Months*
*Service providers in alphabetical order; no rankings implied. Placements based on counts of contract awards in the ISG Contracts Knowledgebase ®.
**Providers who had the highest participation rates in consortiums who were awarded DOD contracts.
€ 38.4
€ 28.6
€ 21.8
1,0411,059
723
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
ACV €B Counts
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16
U.K. Public Sector Contract Award Details
Volume of deals increase sharply and by significantly more value in Central
Government functions, Healthcare (NHS) and Defence (MoD).
Local Government
Accenture
Capita Group
Carillion
CSC
Liberata
Public Healthcare
BT
Capita
CSC
Interserve
Serco Group
Other Central
Government
Carillion
Capita Group
HPE
BT Group
Fujitsu
Defence
BT
Carillion
General Dynamics
HPE
Leidos
U.K. Activity Details by Sub-Sector
U.K. Public Sector Activity for Last 3 TTMs
Top U.K. Public Sector Providers for the
Most Recent 12 Months*
*Service providers in alphabetical order; no rankings implied.
Placements based on counts of contract awards in the ISG Contracts Knowledgebase ®.
€ 1.4€ 0.9
€ 0.2
€ 4.3
€ 3.1€ 2.1
€ 2.0€ 0.3€ 0.6
€ 1.1€ 1.0
€ 1.8
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
Local
Government
Public
Healthcare
Other Central
Government
Defence
€ 8.9
€ 5.2€ 4.7
160
140
167
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
ACV €B Counts
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
17
Continental Europe Public Sector Contract Award Details
Value and volume of deals increases in Continental Europe driven by activity in the
Nordics, Germany, The Netherlands and France.
Local Government
Atea
Capgemini
HPE
Tieto
Transcom WorldWide
Public Healthcare
Atea
Cerner
HPE
Kamsoft
Tieto
Serco
Central Government
Atea
Atos
Capgemini
Indra Sistemas
Thales
Continental Europe Activity by Sub-Sector
Continental Europe Public Sector
Activity for Last 3 TTMs
Top Continental Europe
Public Sector Providers
for the Most Recent 12 Months*
*Service providers in alphabetical order; no rankings implied.
based on counts of contract awards in the ISG Contracts Knowledgebase ®.
€ 2.2€ 2.3
€ 1.7
€ 0.0€ 0.1€ 0.1
€ 0.4€ 0.3€ 0.4
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
Local
Government
Public
Healthcare
Other Central
Government
€ 2.7€ 2.6€ 2.2
202
136
180
2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14
ACV €B Counts
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
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Global Market starts year on an upswing, with ACV at almost €5B.
Number of awards generated ranks this quarter among the best ever.
Americas tops €1.5B for ninth quarter in a row.
Growth in EMEA driven by several large awards, consistent U.K. markets
and strong activity in the Nordics and Southern Europe.
Slowing pace of contracting in Asia Pacific; most sub-regions decelerate.
Expect a difficult compare in 2Q16; if vigorous small-deal activity continues,
markets should grow.
Long term, look for ACV to remain in positive territory; Europe and Asia-Pac
may see increasing demand across secondary markets; U.S. and U.K. markets
likely will maintain consistent demand.
1Q16 ISG Outsourcing Index® - Global Summary and Outlook
summary
market
outlook
market
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Please contact us with your questions and comments.
Learn More
Paul Reynolds
Partner & Chief Research Officer,
ISG Momentum
+1 508 625 2194
paul.reynolds@isg-one.com
www.isg-one.com
John Keppel
Partner and President
+44 (0)7879 432 212
john.keppel@isg-one.com
Denise Colgan
EMEA and AP Media Contact
+44 1737 371523
denise.colgan@isg-one.com
Bill McNee
CEO Saugatuck Technologies,
an ISG Business
+1 203 820 8987
bill.mcnee@saugatucktechnology.com
Laura Mountain
Cohn & Wolfe for ISG
+44 (0) 20 7331 5372
laura.mountain@cohnwolfe.com
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First Quarter 2016
APPENDIX: SCORE CARD FOR TCV
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The ISG Outsourcing Index has moved to ACV as the primary measure of the
Broader Market. We will continue to provide a high-level TCV view of the market via
a Scorecard analysis.
First Quarter 2016 TCV Scorecard
*Contracts with TCV ≥ €25M from the ISG Contracts Knowledgebase®
Scorecard
1Q16 1Q Y/Y 1Q Q/Q
TCV (€B)* Change Change
Global Market € 15.5 -12% -24%
New Scope € 10.9 -15% -4%
Restructurings € 4.6 -3% -49%
Mega-deals € 2.9 -26% -37%
ITO € 9.4 -28% -39%
BPO € 6.1 33% 22%
Americas € 5.6 -2% -25%
EMEA € 7.6 -21% -35%
Asia Pacific € 2.2 5% 107%
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*Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase®
22
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1Q 2016 EMEA ISG Outsourcing Index®

  • 1. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 1 Hosted by: John King Bank of America Merrill Lynch 18 April 2016 The ISG Outsourcing Index® First Quarter 2016 EMEA Market Data and Insights
  • 2. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 2 Covering the state of the outsourcing industry for EMEA commercial contracts.* Welcome to the 54th Quarterly ISG Outsourcing Index® Review Bernd Schaefer Partner John Keppel Partner & President *Contracts with ACV ≥ €5M from the ISG Contracts Knowledgebase®
  • 3. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 3 At a Glance GLOBAL MARKET ACV UP 20% Y/Y WITH SMALLER AWARDS DRIVING MARKET GROWTH NUMBER OF RESTRUCTURING AWARDS SETS QUARTERLY RECORD, WHILE RESTRUCTURING ACV SURGES ALMOST 50% Y/Y AMERICAS UP 30% ON BEST QUARTERLY PERFORMANCE IN FOUR YEARS EMEA UP 19% Y/Y WITH STRONG SHOWING IN THE RESTRUCTURING MARKET ASIA PACIFIC ACV AND NUMBER OF AWARDS DOWN Y/Y; EXTENDED WEAKNESS ACROSS MANY GEOGRAPHIC MARKETS Scorecard 1Q16 1Q Y/Y 1Q Q/Q 1Q16 1Q Y/Y 1Q Q/Q ACV (€B)* Change Change Counts Change Change Global Market Totals € 4.9 20% -12% 404 32% 13% Mega-relationships € 0.9 -3% -49% 5 -29% -38% By Type New Scope € 2.6 4% 0% 231 11% 3% Restructurings € 2.2 48% -23% 173 78% 31% By Scope ITO € 3.4 24% -21% 301 51% 20% BPO € 1.5 12% 17% 103 -4% -2% By Region Americas € 2.2 30% 6% 217 49% 47% EMEA € 2.2 19% -26% 160 28% -6% Asia Pacific € 0.4 -13% -4% 27 -23% -29%
  • 4. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 4 Global Market ACV is up 20% Y/Y, and smaller awards drive market growth; ACV approaches €5B level, while number of awards exceeds the 400 mark. Broader Market Quarterly ACV (€B)* Broader Market Quarterly Contract Counts Global Market Contract Award Trends € 4.9 € 5.5 € 4.4 € 4.9 € 4.1 € 5.3 € 4.6 € 5.4€ 5.2 € 4.0 € 5.1 € 3.2 € 4.9€ 4.6€ 4.8€ 5.2 € 5.9€ 6.1 € 5.5 € 3.8 € 19.7€ 19.4 € 17.5 € 19.6 € 21.2 1Q164Q3Q2Q1Q154Q3Q2Q1Q144Q3Q2Q1Q134Q3Q2Q1Q124Q3Q2Q11 Quarterly ACV TTM ACV Totals 404 356336 446 306 387 295 376358 325 378 233 323313 263 313 370 332313 275 1542 1364129412121290 1Q164Q3Q2Q1Q154Q3Q2Q1Q144Q3Q2Q1Q134Q3Q2Q1Q124Q3Q2Q11 Quarterly Counts TTM Count Totals
  • 5. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 5 EMEA ACV rises 19% Y/Y due to a surge of Restructuring activity that ranks among some of the best results ever; both BPO and ITO markets made slight Y/Y gains. EMEA Quarterly Counts EMEA Contract Award Trends EMEA Quarterly ACV (€B)* EMEA First-Quarter Segment ACV (€B)*EMEA Trailing 12 Months ACV (€B)* € 1.22 € 1.03 € 1.48 € 0.77 € 0 € 1 € 2 € 3 New Scope Restructuring ITO BPO Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 2.25 € 3.03 € 1.89 € 2.71 € 2.21 € 2.89 € 2.01 1Q161Q151Q141Q131Q122Q11 160 170 125 174 147 161 123 1Q161Q151Q141Q131Q122Q11 € 9.65€ 9.30€ 9.87€ 9.50 € 11.87 637 592 647 560 602 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 TTM ACV Totals TTM Count Totals
  • 6. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 6 U.K. and France inch up Y/Y, while Nordics and Southern Europe make larger gains. DACH market ACV down Y/Y though number of DACH awards increases over 30% Y/Y. EMEA Sub-Regions First-Quarter ACV (€B)* EMEA Industry First-Quarter ACV (€B)* EMEA Contract Award Trends Detail € 0.89 € 0.28 € 0.55 € 0.09 € 0.12 € 0.10 € 0.22 € 0.01€ 0.0 € 0.2 € 0.4 € 0.6 € 0.8 € 1.0 € 1.2 € 1.4 U.K. & Ireland DACH Nordics Benelux France Africa & Middle East Southern Europe E. Europe & Russia Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 0.67 € 0.50 € 0.26 € 0.25 € 0.23 € 0.05 € 0.10 € 0.12 € 0.08 € 0.0 € 0.2 € 0.4 € 0.6 € 0.8 € 1.0 € 1.2 Financial Services Manufacturing Telecom & Media Travel, Transport & Leisure Energy Business Services Consumer Packaged Goods Retail Healthcare & Pharma Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
  • 7. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 7 Firstsource Solutions* FleetCor* GFI Informatique* ISON Group Luxoft Mindtree NGA HR* Transcom VirtusaPolaris WNS Co. Revenues < $2 B Capita Ceva Logistics CGI G4S* HCL Infosys Jones Lang LaSalle* MITIE Serco Wipro Co. Revenues $2 -10 B Accenture Atos BT Capgemini Cognizant HPE IBM ISS Global* TCS T-Systems ISG Sourcing Market Standouts in EMEA The Breakthrough 10 category experiences 40% turnover during the quarter as several Service Providers featured on the Leader Board re-enter the Top 10 lists. *New to group as of the current quarter Placements based on ACV of commercial contract awards in the past 12 months sourced from ISG Contracts Knowledgebase®. Service providers in alphabetical order; no rankings implied. Revenues sourced from Hoovers and individual company financial fillings Co. Revenues > $10 B SOURCING STANDOUTS GROUPED BY COMPANY SIZE The Building 10 Sourcing Standouts The Breakthrough 10 Sourcing Standouts The Big 10 Sourcing Standouts
  • 8. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 8 Americas Quarterly Counts Americas Contract Award Trends Americas Quarterly ACV (€B)* Americas First-Quarter Segment ACV (€B)*Americas Trailing 12 Months ACV (€B)* Americas ACV rises 30% Y/Y as Restructuring activity achieves record-setting levels; ITO ACV was best in four years, and number of ITO awards was second-best ever. 217 148146 134142 177 119 1Q161Q151Q141Q131Q122Q11 € 2.2 € 2.1 € 1.7€ 1.7 € 2.2 € 2.6 € 1.5 1Q161Q151Q141Q131Q122Q11 € 8.4€ 7.9 € 5.5 € 7.2€ 7.6 756 616 488483 555 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 TTM ACV TTM Counts € 1.10 € 1.14 € 1.71 € 0.54$0.5 $1.0 $1.5 $2.0 New Scope Restructuring ITO BPO Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
  • 9. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 9 U.S. ACV makes best showing in four years; the number of awards sets record high; best quarter in 10 years for Financial Services as ACV soars 80% Y/Y. Americas Sub-Regions First-Quarter ACV (€B)* Americas Industry First-Quarter ACV (€B)* Americas Contract Award Trends Detail € 0.55 € 0.33 € 0.19 € 0.39 € 0.17 € 0.12 € 0.18 € 0.20 € 0.12 € 0.0 € 0.2 € 0.4 € 0.6 € 0.8 Financial Services Manufacturing Telecom & Media Healthcare & Pharma Business Services Energy Consumer Packaged Goods Retail Travel, Transport & Leisure Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 0.06 € 0.05 € 0.01 € 0.03 $0.0 $0.2 $0.4 Canada Brazil Mexico Other LatAm Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 2.10 € 0.0 € 0.5 € 1.0 € 1.5 € 2.0 € 2.5 U.S.
  • 10. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 10 Asia Pacific ACV slips 13% from a modest Q1 compare with number of contracts also falling; both New Scope and Restructuring ACV lag Y/Y. Asia Pacific Quarterly Counts Asia Pacific Contract Award Trends Asia Pacific Quarterly ACV (€B)* Asia Pacific First-Quarter Segment ACV (€B)*Asia Pacific Trailing 12 Months ACV (€B)* € 1.69 € 2.20€ 2.15 € 2.85 € 1.67 149156159 169 133 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 TTM ACV TTM Counts € 0.33 € 0.06 € 0.19 € 0.19 € 0.0 € 0.2 € 0.4 € 0.6 € 0.8 New Scope Restructuring ITO BPO Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 0.38€ 0.44 € 0.84 € 0.45€ 0.42 € 0.30 1Q161Q151Q141Q131Q122Q11 27 3835 50 343233 1Q161Q151Q141Q131Q122Q11
  • 11. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 11 One large mega award helps support ANZ and Manufacturing short-term growth; remaining geographic and vertical markets in Asia Pacific struggle to gain traction. Asia Pacific Sub-Regions First-Quarter ACV (€B)* Asia Pacific Industry First-Quarter ACV (€B)* Asia Pacific Contract Award Trends Detail € 0.22 € 0.02 € 0.07 € - € 0.06 € -€ 0.00 € 0.05 € 0.10 € 0.15 € 0.20 € 0.25 € 0.30 ANZ India and South Asia Japan Greater China Southeast Asia South Korea Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16 € 0.05 € 0.04 € 0.01 € 0.21 € 0.04 € - € 0.03 € 0.01 € -€ 0.0 € 0.1 € 0.2 € 0.3 Financial Services Telecom & Media Travel, Transport & Leisure Manufacturing Energy Consumer Packaged Goods Business Services Retail Healthcare & Pharma Range of 5 Prior 1Qs Avg of 5 Prior 1Qs 1Q15 1Q16
  • 12. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 12 Special Topic First Quarter 2016 PUBLIC SECTOR OUTSOURCING John Keppel Partner & President
  • 13. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 13 Relative to the Commercial Sector, Public Sector sees strong five-year growth. Most ACV is generated by ITO awards, with BPO ACV varying by geography. Public Sector Trailing 12 Months Counts Global Public Sector Award Trends 1,542 1,364 1,290 1,6361,629 1,006 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 Commercial Sector Public Sector Public Sector Trailing 12 Months ACV (€B)* Public Sector ITO vs. BPO TTM ACV (€B)* 3.25 4.28 3.19 3.77 Average Deal Size and Duration TTM Compare Avg. Duration in Yrs. Avg. Contract Value (€K) € 19.7 € 52.5 € 41.9 € 32.9€ 29.6 € 25.2 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 Commercial Sector Public Sector € 41.4 € 31.2 € 25.7 € 21.3€ 19.5 € 11.1€ 10.8 € 7.2€ 8.2€ 5.8 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 Public Sector ITO ACV Public Sector BPO ACV € 12.8 € 16.4 € 32.1 € 25.1 2Q15 - 1Q16 2Q14 - 1Q15 2Q13 - 1Q14 2Q12 - 1Q13 2Q11 - 1Q12 Commercial Sector Public Sector
  • 14. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 14 Global Public Sector Award Trends North America, led by federal government IT spending, accounts for a large share of sourcing. Average deal values increase, whereas durations shorten. Share of Public Sector ACV for Trailing 12 Months Top Public Sector Providers in Recent 12 Months 58% 17% 5% 3% 17% U.S. & Canada U.K. Continental Europe ANZ Other *New to List for 2016 Service providers in alphabetical order; no rankings implied. Placements based on counts of public sector contract awards sourced from ISG Contracts Knowledgebase ®. U.S. & Canada ANZ U.K. Continental Europe Booz Allen Hamilton* CACI* HPE* Lockheed Martin Northrop Grumman Raytheon Science Applications BT Capgemini* Capita Carillion CGI Fujitsu* G4S* HPE Accenture Atea Atos BT* Capgemini HPE Indra Sistemas Accenture Boeing Harris Corp. HPE* IBM Raytheon* SingTel Optus* Telstra*Public Sector Regional ITO vs. BPO % TTM 79% 31% 88% 76% 21% 69% 12% 24% U.S. & Canada U.K. Continental Europe ANZ ITO ACV BPO ACV
  • 15. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 15 € 31.4 € 24.0 € 15.4 € 5.8 € 3.0€ 4.7 € 0.9€ 0.9€ 1.2 € 0.3€ 0.7€ 0.6 € 13.0 € 6.1 € 4.1 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 Local Government Public Healthcare Other Federal Government Department of Defense U.S. Public Sector Contract Award Details Department of Defense (DoD) ITO dominates the U.S. Public Sector sourcing; Health and Human Services (HHS) and Homeland Security (DHS) remain active. % of DOD Consortium Contracts up 17 percentage pts in Recent 12 Months Local Government Capgemini Dell Harris HPE Verizon Public Healthcare Atos Booz Allen Hamilton HPE ICF International Kelly Services Other Federal Government Accenture CSC HPE Raytheon Science Applications DoD Single Provider General Dynamics Lockheed Martin Northrop Grumman Science Applications Raytheon DoD Consortium Participation** BAE Systems Booz Allen General Dynamics Leidos Lockheed Martin U.S. Activity Details by Sub-Sector U.S. Public Sector Activity for Last 3 TTMs Top U.S. Public Sector Providers for the Most Recent 12 Months* *Service providers in alphabetical order; no rankings implied. Placements based on counts of contract awards in the ISG Contracts Knowledgebase ®. **Providers who had the highest participation rates in consortiums who were awarded DOD contracts. € 38.4 € 28.6 € 21.8 1,0411,059 723 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 ACV €B Counts
  • 16. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 16 U.K. Public Sector Contract Award Details Volume of deals increase sharply and by significantly more value in Central Government functions, Healthcare (NHS) and Defence (MoD). Local Government Accenture Capita Group Carillion CSC Liberata Public Healthcare BT Capita CSC Interserve Serco Group Other Central Government Carillion Capita Group HPE BT Group Fujitsu Defence BT Carillion General Dynamics HPE Leidos U.K. Activity Details by Sub-Sector U.K. Public Sector Activity for Last 3 TTMs Top U.K. Public Sector Providers for the Most Recent 12 Months* *Service providers in alphabetical order; no rankings implied. Placements based on counts of contract awards in the ISG Contracts Knowledgebase ®. € 1.4€ 0.9 € 0.2 € 4.3 € 3.1€ 2.1 € 2.0€ 0.3€ 0.6 € 1.1€ 1.0 € 1.8 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 Local Government Public Healthcare Other Central Government Defence € 8.9 € 5.2€ 4.7 160 140 167 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 ACV €B Counts
  • 17. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 17 Continental Europe Public Sector Contract Award Details Value and volume of deals increases in Continental Europe driven by activity in the Nordics, Germany, The Netherlands and France. Local Government Atea Capgemini HPE Tieto Transcom WorldWide Public Healthcare Atea Cerner HPE Kamsoft Tieto Serco Central Government Atea Atos Capgemini Indra Sistemas Thales Continental Europe Activity by Sub-Sector Continental Europe Public Sector Activity for Last 3 TTMs Top Continental Europe Public Sector Providers for the Most Recent 12 Months* *Service providers in alphabetical order; no rankings implied. based on counts of contract awards in the ISG Contracts Knowledgebase ®. € 2.2€ 2.3 € 1.7 € 0.0€ 0.1€ 0.1 € 0.4€ 0.3€ 0.4 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 Local Government Public Healthcare Other Central Government € 2.7€ 2.6€ 2.2 202 136 180 2Q15 - 1Q162Q14 - 1Q152Q13 - 1Q14 ACV €B Counts
  • 18. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 18 Global Market starts year on an upswing, with ACV at almost €5B. Number of awards generated ranks this quarter among the best ever. Americas tops €1.5B for ninth quarter in a row. Growth in EMEA driven by several large awards, consistent U.K. markets and strong activity in the Nordics and Southern Europe. Slowing pace of contracting in Asia Pacific; most sub-regions decelerate. Expect a difficult compare in 2Q16; if vigorous small-deal activity continues, markets should grow. Long term, look for ACV to remain in positive territory; Europe and Asia-Pac may see increasing demand across secondary markets; U.S. and U.K. markets likely will maintain consistent demand. 1Q16 ISG Outsourcing Index® - Global Summary and Outlook summary market outlook market
  • 19. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 19 Please contact us with your questions and comments. Learn More Paul Reynolds Partner & Chief Research Officer, ISG Momentum +1 508 625 2194 paul.reynolds@isg-one.com www.isg-one.com John Keppel Partner and President +44 (0)7879 432 212 john.keppel@isg-one.com Denise Colgan EMEA and AP Media Contact +44 1737 371523 denise.colgan@isg-one.com Bill McNee CEO Saugatuck Technologies, an ISG Business +1 203 820 8987 bill.mcnee@saugatucktechnology.com Laura Mountain Cohn & Wolfe for ISG +44 (0) 20 7331 5372 laura.mountain@cohnwolfe.com
  • 20. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 20 First Quarter 2016 APPENDIX: SCORE CARD FOR TCV
  • 21. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 21 The ISG Outsourcing Index has moved to ACV as the primary measure of the Broader Market. We will continue to provide a high-level TCV view of the market via a Scorecard analysis. First Quarter 2016 TCV Scorecard *Contracts with TCV ≥ €25M from the ISG Contracts Knowledgebase® Scorecard 1Q16 1Q Y/Y 1Q Q/Q TCV (€B)* Change Change Global Market € 15.5 -12% -24% New Scope € 10.9 -15% -4% Restructurings € 4.6 -3% -49% Mega-deals € 2.9 -26% -37% ITO € 9.4 -28% -39% BPO € 6.1 33% 22% Americas € 5.6 -2% -25% EMEA € 7.6 -21% -35% Asia Pacific € 2.2 5% 107%
  • 22. © 2016 Information Services Group, Inc. All Rights Reserved isg-one.com *Contracts with ACV ≥ €4M from the ISG Contracts Knowledgebase® 22 www.isg-one.com Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 1,000 employees and operates in 21 countries. imagine your future™ RESEARCH | CONSULTING | MANAGED SERVICES let’s connect...