2014 Americas #ISGSIC Welcome and Market Update

Welcome Service Providers …
Welcome!

… and law firm attendees

ISG 2014 Sourcing Industry Conferences
Americas – Dallas, September 29-30
India – Bangalore, October 9
Europe – London, October 20-21

Just ask …
Lindsay Bookout
Carol Goode
Marilyn Hopkins
Ellen Rosof
Megan Zamary
Event
Management

Keep the conversation going …
Monday:
3:00 – 3:30: Sue Danino, Todd Dreger, Esteban Herrera
5:00 – 5:30: Harvey Gluckman, Steve Hall, Stanton Jones
Tuesday:
8:00 – 8:30: Clay Calhoun, Al Denis, Paul Reynolds
10:15 – 10:45: Jeff Croyle, Hack Heyward, Ray Shehata
Coffee talk
Join us on our LinkedIn group for Sourcing Industry Service Providers [http://ow.ly/BSSh0]
and at @isg_news on Twitter, #ISGSIC.

Time to disrupt your business before the business disrupts you
Avoid the success trap
2010
$71.8B
2014
$80.9B
Global Outsourcing Spend

Technology driven disruption
Amazon
Borders
Uber
Square
Duolingo
Yplan
Airnb
Who will disrupt our industry?
Netflix
Blockbuster
Apple
RIM / Kodak/Music

Exploring the success trap
ACV ($B)
$15.2
$21.2
$18.7
New Scope
$10.1
$14.3
$11.2
Restructure
$5.1
$6.9
$7.5
2006
2010
2013
35%
9%
‘06-’10
‘10-’13
42%
-22%
39%
-12%
Percentage
Change ACV

Exploring the success trap
ACV ($B)
$15.2
$21.2
$18.7
New Scope
$10.1
$14.3
$11.2
Restructure
$5.1
$6.9
$7.5
2006
2010
2013
35%
9%
‘06-’10
‘10-’13
42%
-22%
39%
-12%
Percentage
Change ACV
96%
52%
‘06-’10
‘10-’13
53%
6%
62%
18%
Percentage Change Counts

Source: ISG Research-Contracts Database. ACV = Annual Contract Value for the contacts awarded in that year greater than $25M
$21.0
$30.1
$21.4
54
55
57
2005
2010
2013
ACV ($B) ITO
# SPs ITO
$3.7
$2.1
$2.9
26
30
29
2005
2010
2013
ACV ($B) BPO
# SPs BPO
Global competition at $25M+

Global competition at $5M+
Source: ISG Research-Contracts Database. ACV = Annual Contract Value for the contacts awarded in that year greater than $5M
$24.6
$36.4
$29.8
96
115
140
2005
2010
2013
ACV ($B) ITO
# SPs ITO
$5.6
$5.3
$6.2
79
83
127
2005
2010
2013
ACV ($B) BPO
# SPs BPO

4.5
4.7
4.2
4.1
3.9
2000
2005
2008
2010
2013
0.0
1.0
2.0
3.0
4.0
5.0
$0
$50
$100
$150
$200
$250
$300
Average Duration in Years
Average TCV ($M)
Duration pressure continues
Source: ISG Research-Contracts Database

Has the win rate for service provider’s on competitive transactions gone up or down since 2010?
•Up
•Down
•Stayed the same

Top 20 service providers
Note: Per 100 ISG Invitations
Win Rate
13%
20%
ISG Invitations
High
Average
Low
46%
42%
2010
2013
19%
14%
3%
1%

Multi-sourcing leveling off
48%
49%
56%
65%
27%
24%
24%
21%
14%
11%
11%
8%
2013
2010
2005
2000
1 SP
2 SP's
3 SP's
4 SP's
5+ SP's
Note: ITO Contracts>USD25M+; 2013 Forbes Global 2000 company contracts considered
2000
2005
2010
2013

Current market trends
Complimentary Automation
Silo’d Analytics
Mobility/BYOD
As-A-Service
Social Media
Limited Industry Platform Solutions
Multi-Sourcing

Future market trends
Replacement Automation
Continuous Contracting
Enterprise Analytics
Service Integration
Internet of Things
Crowd Sourcing
Outcome-based Pricing
Hyperscaled
Data Centers
Global Business Services

Automation benefits
Productivity and efficiency
Accuracy
Cost savings
Compliance
Scalability and flexibility

Who oversees analytics?
9%
18%
15%
5%
5%
23%
4%
20%
CFO
CIO
CMO
Other C-Suite Execs
CEO
Business Unit
CAO
Multiple

Analytics
Majority of Outsourcing Today
What information do we have?
Data
Content
Reporting
What does
it mean?
What
happened?

Analytics
Decision Support
Forecasting
Optimization
What actions are needed?
How is it all connected?
What is happening now?
What’s the best that can happen?
Outsourcing Tomorrow

Supply-Chain Helpers
Vertical- Market Apps
Physical
World Web
Ubiquitous Positioning
2000
2010
2020
Time
The Internet
of Things
Data Source: SRI Consulting Business Intelligence
Road map of technology and data

Physical
World Web
2000
2010
2020
Time
The Internet
of Things
RFID tags for facilitating routing, inventorying & loss prevention

Physical World Web
2000
2010
2020
Time
The Internet
of Things
Surveillance, security, healthcare, transport, food safety, document management

Physical
World Web
2000
2010
2020
Time
The Internet of Things
Locating people & everyday objects, wearable devices

Physical
World Web
2000
2010
2020
Time
The Internet
of Things
Teleoperation & telepresence. Ability to monitor & control distant objects

Attack the supply chain
Retail Store
•
Inventory errors
•
Out-of-stocks
•
Costly markdowns
•
Theft
•
Expensive receiving
Distribution
•
Receiving & packing errors
•
Int’l shipments
•
Supply Chain visibility
•
Complex Cross-docking
Vertical Based Solutions (Retail example)
Sourced Production
•
Outsourced, overseas manufacturing
•
Packing & shipping errors
•
Manufacturing variances
>
>

Regardless of disruption…
price
service
selection
experience
delivery
convenience
…some things never change

2014 Americas #ISGSIC Welcome and Market Update

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2014 Americas #ISGSIC Welcome and Market Update