1Q11-TPI-Index-EMEA

8/6/2019 1Q11-TPI-Index-EMEA

1/20

2011

Technology

PartnersInternational

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EMEA Outsourcing Market Data and Insights

Hosted by:

Marc Geall, Deutsche Bank

First Quarter 2011

April 21, 2011


2/20

2011

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2

Partner & Managing

Director,TPI Germany

Partner & President,

TPI EMEA

Bernd SchaeferDuncan Aitchison

Welcome to the 33rd Quarterly EMEA TPI Index CallCovering the state of the outsourcing industry for global, commercial contractswith total contract value greater than 20 million.


3/20

2011

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EMEA SOURCING MARKET28% from 4Q10,

but NEW SCOPE PERFORMANCE WAS STEADY

RESTRUCTURINGS DOWN after a record 2010,

IMPACTING ITO VALUES

A RESURGENCE OF BPO, 66% globally year over year,

with ACTIVITY LEVELS AT A TWO YEAR HIGH IN EMEA

OUTLOOK FOR 2011 is healthy based on

INCREASING LEVELS OF MARKET ACTIVITY

3

1Q11 HEADLINES


4/20

2011

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At A Glance4

1Q11

TCV (B)*

Q/Q

Growth

Y/Y

Growth

Global Broader Market 13.9 -25% -28%

Restructurings 2.0 -64% -73%

New Scope 11.9 -7% steady

Americas 4.3 17% -56%

EMEA 8.1 -28% -5%

Asia-Pacific 1.5 -57% -42%

ITO 8.7 -46% -47%

BPO 5.3 111% 66%

SCORECARD

SOURCING MARKET25% IN 1Q11

NEW SCOPE PERFORMANCE STEADY

RESTRUCTURINGS DOWN, IMPACTING ITO & AMERICAS

RESURGENCE OF BPO, ACTIVITY NEAR A 5 YEAR HIGH

OUTLOOK FOR 2011 INDUSTRY ACTIVITY LEVEL UPSWING

*ITO and BPO Contracts with TCV > 20M


5/20

2011

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Broader Market Contract Award Trends5

EMEA TCV is down 28% Q/Q. Despite this, Q1 values are among the strongest

in the last decade.

EMEA Broader Market Contract Awards TCV (B)*

* ITO and BPO Contracts with TCV > 20M

7.1 6.7 5.9

15.4

8.5 6.6 5.8

11.2

8.1

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

- 28%

5.4 5.2 6.2 12.3

5.4 7.0 11.3

7.1 8.5 8.1

1Q02 03 4 5 06 07 08 9 10 1Q11

10 Years of First Quarters

Quarter to Quarter Comparisons


6/20

2011

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EMEA Contract Award Trends6

TCV awarded in EMEA declined 5% Y/Y and 28% Q/Q.

EMEA Contract Awards TCV (B)*


7.1 6.7 5.9

15.4

8.5 6.6 5.8

11.2

8.1

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

-28%

23.5

29.5

24.0

32.0

21.0

20.6

8.2

6.9

9.3

4.0

5.9

7.2

2Q10-1Q11

2Q09-1Q10

2Q08 1Q09

2Q07 1Q08

2Q06-1Q07

2Q05-1Q06

New Scope

Restructuring

Trailing 12 Months

Quarter to Quarter Comparison


7/20

2011

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Comparing New vs. Restructuring Contracts Awarded7

New Scope TCV in EMEA was down 10% Q/Q and TCV of restructurings fell by

76% Q/Q.

EMEA Broader Market New vs. Restructured Contracts TCV (B)*


7.4 8.2

5.0

5.6

0.7

3.0

3.5 1.4

1Q114Q103Q102Q101Q10Q093Q092Q091Q09

EMEA New TCV EMEA Restructured TCV

- 76%

- 10%

0.7

3.5

1.4

0.6

1.8 1.5 2.0

0.6 1.2 1.3

1Q1110090807060504031Q02

Restructuring TCV - 10 Years of First Quarters



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Americas Contract Award Trends8

Contracting activity in the Americas increased this quarter, after having

slowed during each of the past three quarters.

Americas Contract Awards TCV (

B)*


6.5 6.7 6.9 7.6

9.8 8.3

5.9

3.7

4.3

1Q09 2Q09 3Q09 Q09 1Q10 2Q10 3Q10 4Q10 1Q11

15.8

19.9

19.4

18.4

20.4

29.2

6.4

11.2

6.5

6.1

5.4

15.7

2Q10-1Q11

2Q09 1Q10

2Q08 1Q09

2Q07-1Q08

2Q06-1Q07

2Q05 1Q06

New Scope

Restructuring

Trailing 12 Months

+ 16.7%



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1.0

3.6

2.7 2.0

1.1 0.9

1.8

3.5

1.5

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Asia Pacific Contract Award Trends9

TCV awarded in Asia Pacific was up 42% Y/Y, although it declined 57% Q/Q.

Asia Pacific Contract Awards TCV (B)*

- 57 %


No mega-

relationships in

1Q11

6.0

7.0

7.6

5.9

5.3

5.2

1.8

2.4

0.9

1.2

2.1

1.2

2Q10 1Q11

2Q09-1Q10

2Q08-1Q09

2Q07 1Q08

2Q06 1Q07

2Q05-1Q06

New Scope

Restructuring

Trailing 12 Months



10/20

2011

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4.5

4.1

4.3

0.4

3.5

1.2

1Q11

1Q10

1Q09

New Scope Restructuring

EMEA: ITO Contract Award Trends10

A lack of restructurings in the quarter led to a decline in ITO TCV awards of

52% Q/Q and 36% Y/Y. New scope increased 10% Y/Y.

EMEA ITO Contract Awards TCV (B)*

4.9

10.3

3.8 5.2 7.6

12.1

5.1 5.4 5.5

1Q114Q103Q102Q101Q104Q093Q092Q091Q09

- 52 %

*ITO Contracts With TCV > 20M

Comparing First Quarters



11/20

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33

20211917

28

212114

1Q114Q103Q102Q101Q104Q093Q092Q091Q09

EMEA: BPO Contract Award Trends11

BPO TCV rose substantially both Q/Q and Y/Y. This was EMEAs strongest

quarter for BPO in the last two years.

EMEA BPO Contract Awards TCV (B)*

3.2

0.9

2.0 1.4

1.0

3.2

0.8 1.3 1.5

1Q114Q103Q102Q101Q104Q093Q092Q091Q09

+ 365%

Includes the

Saudi Telecom

contact centre

mega-

relationship

and a largeShell-Logica

loyalty cards

processing

agreement

*Industrywide BPO Contracts With TCV > 20M

Quarter to Quarter Contracts Awarded Comparison

Quarter to Quarter TCV Comparison


12/20

2011

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126

395

80

40

166

536

312

176

128

112

112

52

Telecom & Media

Energy

Financial Services

Business Services

Retail

Healthcare & Pharma

Manufacturing

Travel,Transport,

Leisure

1Q10 1Q11

400

80

367

20

32

140

80

4Q10

EMEA: Industry Segments Contract Award Trends12

Telecom & Media dominates market share in the first quarter of 2011,

followed by Energy and Financial Services.

EMEA TCV (M)* Awarded by Industry

66%

14%

13%

8%

Telecom

& Media

Energy

Other

Fin. Srvs.

* ITO and BPO Contracts with TCV > 20M


1Q11 Share of TCV

560 2,720


13/20

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EMEA: 1Q11 Top 10 Service Providers by TCV13

Although absent from the Top 10 list, Indian-Heritage Providers win more than

25% of EMEA TCV.

Accenture

Aegis

Capgemini

Capita

CSC

EDB ErgoGroup

HP

IBM

Logica

T-Systems

Indian-HeritageProviders won

25.5% of TCV in

1Q11


15/20

2011

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In Case You Missed It, the India Providers Story15

Looking back over the past 10 years, you may be surprised at the impressive

growth achieved by India providers.

Increasing Share of

TCV Awarded

Ten Years Ago

Today

Market Share

growth

26%Today

Revenue

# contracts19%

.1%

2%

Ten Years Ago

Larger Share of a

Growing Market


16/20

2011

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The Chinese Service Provider Community16

From a revenue perspective, the Chinese provider market is structurally similar

to the India provider market of ten years ago.

Camelot Longtop

Chinasoft Neusoft

hiSoft Rayoo Tech

Insigma SinoCom

iSoftStone VanceInfo

Highly

Fragmented

Market

85,000

Employees

$$2.4 billion

Revenues

10 Largest Chinese Providers

$ $$ $$$$$


17/20

2011

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Changing Market Dynamics17

Factors impacting all providers, including the Chinese.

33%

69%

7 Yrs Ago

Today

More Transactions Include

Offshore Delivery Than Ever

37

Large Companies Leveraging

Multi-sourcing More Than Ever

10 Yrs Ago TodayNumber of Service Providers

Making Up 75% Share of TCV

10 Yrs Ago Today

7

15

Continued Growth in Savings

Realised through Outsourcing

7 Yrs Ago

2x

53%33%

% G2000

Today


18/20

2011

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Chinese Provider Future Growth

Large, underpenetrated

domestic market

Scale and experience gained

from domestic market wins

supports big global deal wins

Potential to acquire service

centers from current external

partners and subcontractors

Chinese government as a

potential buyer

18

What might help Chinese providers accomplish breakthrough growth?

Breakthroughfactors

Labour arbitrage advantages not

unique

Intellectual property and data

privacy distraction

U.S. firms look outside Asia

Pacific for additional delivery

centres

Time lag to develop middlemanagement

Constrainingfactors


19/20

2011

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1Q11 TPI Index Summary

19

Steady market recovery supported by:

Strong activity across all regions

Increasing BPO interest

Stable new scope performance

marketBroader

EMEA TCV down 28% from strong 4Q10

Restructurings down, fuelling ITO decline both in EMEA andGlobally

Low restructurings greatly impacted ITO TCV

sectorsMajor

EMEA accounted for 57% of global ITO values

BPO TCV remarkably strong Q/Q and Y/Y. Number of contracts inEMEA is best in five years

Telecom & Media dominate EMEA market share

outlookTPI

Documents

1Q11-TPI-Index-EMEA