Partner, KPMG in India
Our analysis of the 3Q14 ITO/BPO industry makes it clear that despite—or due to—technological innovations, client expectations, and a host of other factors, there’s a lot of activity going on. Following are some of the key 3Q14 (July to September 2014) highlights.
- BPO total contract value (TCV) was up an astounding 678 percent in 3Q14 as compared to 2Q14, and total BPO deal count increased by 151 percent in the same period, but ITO decreased in both TCV and number of deals signed. Most of the increase in BPO deals in the third quarter was due to a significant activity in defense and public sector.
- 197 ITO contracts worth $17.1 billion, and 103 BPO contracts worth $17.9 billion, were signed worldwide
- 24 ITO-BPO bundled deals were signed globally, with a TCV of $4.8 billion
- Approximately 70 percent of deals by value originated from the United States, followed by Spain with more than 5 percent; Brazil and India were the other key outsourcers
- The average deal tenure has been consistently increasing since 1Q14, with an increase of one month as compared to 2Q14, to four years seven months in 3Q14
- The defense and government sectors continue to be top consumers of ITO-BPO services, representing 44 percent and 30 percent, respectively, of the value of all outsourcing deals signed during the quarter
- Information and Communication Technologies (ICT) services contributed $5.5 billion and BPO bundled services contributed $5 billion to the TCV pie, making them among the largest procured services globally within ITO and BPO outsourced services
- Average annualized contract value during the quarter was $24.9 million, a minor decrease from $27.7 million in 3Q13
Click here for KPMG’s detailed analysis of 3Q2014 State of the Global Sourcing Market.
Viral Thakker coheads KPMG’s Shared Service and Outsourcing Advisory practice in India, and is a partner in KPMG India’s Management Consulting practice. He has extensive experience in leading large and complex sourcing life cycle, vendor management, and contracting engagements. His primary industry focuses are high-tech, retail, and financial services.