Global Business Services: (Mostly) Same Goals, (Mostly) Same Challenges and Problems

Stan Lepeak
Global Research Director, KPMG LLP

KPMG recently released the results of its quarterly, global 2Q15 Sourcing Advisory Pulse surveys. These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS). The learnings are gleaned from KPMG firms’ advisors, who are working closely with end-user organizations that are actively exploring or undertaking GBS initiatives, as well as from leading global business and information technology (IT) service providers.

One of the topic sets examined in this edition of the Pulse survey was what are the top drivers, challenges, and benefits sought by organizations in their GBS improvement efforts. KPMG defines GBS as the collective set of resources, capabilities, and systems to deliver enterprise-wide, multifunctional business services such as finance and accounting (F&A), human resources (HR), procurement, and other business processes across an organization. Implied in GBS is greater aggregation and leveraging of common IT and business processes, models, and leading practices to deliver these services more efficiently and effectively than in the past. As the name implies, this is often done on a global scale, using multiple service delivery models including elements of shared services, outsourcing and, increasingly, cloud solutions.

Driving cost savings from GBS efforts remains a baseline requirement and goal (see Figure 1), with greater emphasis being placed on improving global delivery capabilities, improving process performance, and supporting global growth efforts. Saving money is a requirement for all GBS organizations, but success—and the longevity both of the GBS organization and its executives—rests on delivering measurable business value above and beyond cost savings. Supporting and enabling organizational growth, for example via faster and more successful mergers, acquisitions, and divestitures, has emerged as one critical GBS value-add and strategic driver for investment and expansion. Organizations are taking a more methodical and structured approach to drive GBS change and improve maturity, are more focused on weighing costs against benefits, as well as mapping GBS strategic direction against corporate strategies and operating models. For the most mature GBS organizations, GBS capabilities are viewed as a strategic corporate weapon, not just a means to save money.

Figure 1 – Top Drivers for GBS Improvement Efforts


Challenges to improving GBS capabilities remain formidable, but not necessarily new or different from past major change efforts (see Figure 2). Retained organization, transition, and governance challenges remain the perennial challenges, along with weak change management capabilities. These have been the top perennial challenges since KPMG began conducting this polling. It is not the case, however, that organizations are not getting better at addressing these challenges, rather that the challenges become more complex as GBS efforts expand and their goals shift from just cost savings to delivering more strategic corporate value.

Figure 2 – Top Challenges to Improving GBS Capabilities

fig 2 9299
Finally, the top priorities (see Figure 3) in GBS and service delivery improvement efforts are enabling end-to-end process ownership and better integrating GBS efforts across functions, geographies, and business units to create a more holistic and portfolio-based approach to managing service delivery. The nature of these goals in part point to why the challenges listed above are perennial. Enabling end-to-end process ownership is really hard to do and involves among other things huge change management efforts, and the scope of the services being integrated—across multiple functions, geographies, and business units often using both shared services and outsourcing—is daunting as well.

Figure 3 – Top Priorities in GBS Improvement Efforts
fig 3 9299

Overall, many organizations, especially larger global ones, are successfully advancing the maturity of their GBS efforts. But the hill gets steeper near the top and there are some notable failures of organizations that pulled the proverbial plug on their GBS operations when unable to successfully move beyond cost savings to enabling measureable business value.

Governance Leadership in GBS

Liz Evans
Managing Director
Shared Services and Outsourcing Advisory

Liz Evans, Managing Director with KPMG, recently sat down with Phil Fersht, CEO of HfS Research, to talk about governance.

Phil: Liz, it’s great to talk with you again. I think it’s been four or five years since we last spoke to you on the blog. You have built quite a reputation at KPMG these days for leading a lot of the governance strategy and how clients are maturing post-transaction. I think our readers would like to hear a bit from you about your background and some of the early days in your career, then maybe how you ended up becoming such a governance expert in the industry.

Liz: Thanks Phil – it’s great to speak to you. You know, I did a conference—a Governance roundtable last October—and one of the sessions was on talent management. The first question I asked the audience was, “Put your hands up if, when you left university, you wanted to be a governance professional.” Shockingly, no-one raised their hands. And I have to say I am in the same boat. So I think the route into governance and this industry is often an interesting one.

I started off doing outsourcing deals way back in the mid-‘90s. And I actually focused much more on service levels. And then was asked to look at the structure of how you manage those on an ongoing basis. It kind of led me down the road as well. Service levels and service credit really are not all there is to a relationship—it’s much broader. I think the rest, as they say, is history from there. When I joined EquaTerra in 2005, I had the opportunity to really spend my time focusing on governance as a true discipline and expand my opportunity to include not only IT, where my background is, but also the BPO space as well. And then looking at shared services, and now in the KPMG world, I get to really look at service delivery governance from a much broader perspective now that we are looking at global business services and what that means for organizations and how people focus on it.

Phil: Now let’s talk about GBS for a bit because I think we have sort of come off the initial buzz of “What is GBS?” and why it is a growth path for many organizations to take. From your perspective, coming from traditional outsourcing into shared services to where we are, how would you describe what GBS is today to a sourcing executive on the buy side and why is it something that they should be excited about?

Liz: That’s an interesting question. I have a firm belief that GBS is really about changing not only your organizational structure but also the mindset upon which you are delivering services. It is not only about the value and the knowledge and the talent within a given function—let’s just say IT or finance. It is also about how you get those traditional functions in your organizational structure to really work together effectively to deliver services or a complete end-to-end process to the business customers…

To learn more about the role of governance leadership in GBS, read the full interview on the HfS blog, Horses for Sources.

About the Author:
Liz is a Managing Director with KPMG. She has over 17 years’ experience, focused on working with organizations to support transformational change, often in the form of shared services, outsourcing, or other changes to the service delivery environment. Much of her work is spent advising clients on how to successfully establish supplier portfolios and govern them effectively.

Related Insight:

Don’t Get Left Behind: Next Generation Contact Centers

 Michele Miller, Director, Shared Services and Outsourcing Advisory

A new era has emerged and brings with it a population that not only wants, but expects answers and resolutions delivered more quickly and efficiently. This is a generation that prioritizes the speed of information over the human experience. That shift has caused businesses to rethink the delivery of the customer experience far beyond the traditional contact center analyst who answers the phone or supports the customer through an online chat session. Whether your contact center is internal or outsourced, understanding the differentiators in delivering exceptional service will impact your company’s bottom line

In the past, a dissatisfied customer had little influence on the growth potential of a business. Today that consumer has the ability to make or break a company as reviews go viral. Previously, the only venue to provide feedback on an interaction was through a customer satisfaction survey sent out by the company. Now, what is more likely to occur is that an experience, good or bad, will show up as a review on one of many public forums. This has made companies painfully aware of the importance of their contact center.

Effectively managing service delivery, with the unpredictability of customers and their ever-changing perception of service, has become even more challenging in terms of costs and options. To help you better understand opportunity and budget trade-offs, KPMG offers an eight point checklist that characterizes well-managed contact centers.

Successful contact centers possess a very similar set of mature attributes in the delivery of their services, which in turn allows them to balance business objectives with customer expectations. This is evident whether delivery is sourced to a service provider or offered through an internal organization.

About the Author:
Michele has 21+ years of experience in infrastructure management and sourcing advisory. She specializes in solution assessment, design, implementation and optimization with added emphasis on transaction, transition and transformation services.

Related Insight:
To access the checklist and to learn more about your contact center’s readiness to face the future, read our whitepaper Next-Generation Contact Centers: Building a Competitive Customer Service Model in the Age of Social Media.

The RPA Revolution: What Are Your Next Steps?

Cliff Justice
Principal, KPMG LLP
Innovation and Enterprise Solutions Lead
Labor-centric business process outsourcing (BPO) is dying, but robotic process automation (RPA) continues to grow. Although BPO may once have been your most profitable strategy, factors in today’s business world do not justify traditional outsourcing based on labor arbitrage. KPMG LLP’s quarterly survey of outsourcing buyers, advisors, and service providers reveals that demand for third-party services dropped significantly in 2015.*

New RPA-based business model

The end of BPO and the rise of RPA are incredibly disruptive forces, upending industries, markets, and, potentially, whole societies. But they also present powerful opportunities for forward-looking, transformative enterprises to drive long-term value. Service providers are embracing RPA in order to move away from outsourcing deals and create operating models that bypass the back office completely. Cloud-based RPA is enabling them to deliver services in a much more responsive, targeted, scalable, cost-effective, and “labor-light” manner. RPA has also become more advantageous than employees for even some higher-level knowledge work.

Image for 9308

Along with traditional service providers, other BPO entrants are reevaluating their entire business and operating models through a digital lens. Cloud providers like ServiceNow, Salesforce, and Amazon are creating new types of service—networked platforms that enable enterprises to operate their business processes virtually, with a much-reduced headcount and very low implementation costs.

Where do you go from here?

As you begin to lay the groundwork for RPA in your business, here are three key areas of consideration:

  • Reframe your strategy and business model. Embracing RPA is not just about taking out cost. It’s about creating—or protecting—your advantage. Rather than squeezing another nickel out of a linear, people-centric process, your core objective should be to leverage emerging RPA platforms to digitize business processes, eliminate manual activities, and drive greater cost efficiency, responsiveness, and productivity.
  • Reevaluate outsourcing contracts. Look forward. What do you expect from your outsourcing relationships in this new, digitized world? If you’re a buyer of outsourcing, ask your provider what they’re bringing to the table in terms of automation. If you’re a service provider, think about how you can digitize your business process knowledge, and talk to your clients about ways to collaborate.
  • Redeploy your resources. With RPA, you will eliminate a lot of manual activities and free up skilled labor. How will you manage widespread workforce change? Think about how you can use those displaced employees to do something else for your business. Could those resources take on higher-value roles, becoming experts who resolve issues that technology cannot?

The RPA revolution has already begun. Now the question is whether you’ll be a leader or a laggard in the new world of RPA-based development.

*KPMG Sourcing Advisory Global 1Q2015 Pulse Survey (KPMG, April 27, 2015)

About the Author:
Cliff is a Principal in KPMG’s Innovation & Enterprise Solutions team, leading the firm’s Cognitive Innovation initiatives. He is a leading authority on global service delivery model design and sourcing with more than 20 years of experience in operations, outsourcing, offshoring, and enterprise services transformation.

 Related Insight:



A CIO Check List for Digital Transformation [SlideShare]

Marc Snyder
Managing Director, CIO Advisory
Head of Global Centre of Excellence at KPMG

CIOs are at a crossroad.  Down one road, CIOs assume a leadership role that harnesses digital disruption and turns IT into a source of innovation, working with business leaders to develop new products, services and even business models.  Down the other road, CIOs preside over an increasingly marginalized IT as its business customers go elsewhere for innovation, while they still manage a shrinking portfolio of legacy systems with diminishing value.

CIOs are in a perfect position to make the difference between being a victim of disruption and a digital leader. View the SlideShare below to access a CIO Checklist that KPMG has developed to guide CIOs on that road to become a leader in this new digital world.

About the Author:
Marc heads KPMG’s Global CIO Advisory Centre of Excellence and as a senior-level IT leader, helps client executives drive improved business performance through the strategic and effective use of technology. 

Related Insight:

What Has Your Analytics Capability Done For You Lately?

Chris Panneck
CIO Advisory
Hari Venkataraman
CIO Advisory

If your IT organization is typical, its analytics consists of casting a wide net to surface myriad metrics around, for example, ticket volumes, ticket duration, number of people working on tickets, and incidents by different severity levels. These “did you know?”-type data points are good for populating dashboards, but the value they provide is debatable, as they lack insight into specific business challenges such as, “Why are incidents taking so long?”

A real value-producing analytics capability possesses two key characteristics: a top-down approach, and a project orientation.

A top-down approach means always beginning with a defined business question, e.g., “How do I reduce the overall incident load to run a more efficient organization?” It then deconstructs the question to allow focus only on relevant data elements, patterns, and trends, and to enable identification of causality, relationships, and correlations that drive specific actions.

Operating in a project-like environment enables the analytics team to generate relevant findings and outcomes. Essentially as with the Agile development methodology, analysts can act on the insights they’ve unearthed from the narrower set of data indicated by the business question. For example, they may toss some information that proves irrelevant to the issue at hand, move the data into the company’s regular reporting package, or iteratively dig deeper into specific data points until they find the answer that will drive a specific action. This constant iteration provides increasingly deeper insights into trends and patterns, thereby enabling the business to ask better questions, leading to progressively more informed business decisions.

Consider this real-world example. A large financial services institution had deployed a brand new client servicing platform that was integrated with several of its legacy back-end systems. As the platform was to be used by customers, the bank expected a significant increase in the workloads on the back-end systems. It implemented a predictive performance management system to track utilization of the back-end systems at a granular level, and correlate utilization to workloads to identify potential threshold breaches and performance bottlenecks.

Upon implementation, one of the key databases in the back-end crashed intermittently. Because this was a highly customized deployment, the bank’s IT department was unable to pinpoint the cause. An analytics team stepped in and began visualizing the performance and event data captured by the performance management system as the starting point for answering the overarching question, “What is causing this database to crash?”

The analytics team first recognized that utilization associated with the crashing database spiked at regular intervals. Digging deeper, they identified that the first crash instance happened during the weekend following the initial deployment, but that the database infrastructure didn’t show any changes. Their further analysis of platform logs found a correlation between the spikes in database utilization and a particular clean-up task that ran every weekend. The analytics group was finally able to determine that a code issue – which showed up whenever the cleanup tasks were complete – was actually causing the database to be overloaded and eventually crash.

To operate a real value-producing analytics capability, you need to ask the right business questions, and continue to dig until one or more specific actionable solutions are revealed.

As this financial services firm learned, the traditional boil the ocean approach to analytics doesn’t work, as it results in shallow data that lacks root cause information with which to make informed business decisions. To operate a real value-producing analytics capability, you need to ask the right business questions, and continue to dig until one or more specific actionable solutions are revealed.

About the Authors:
Chris has over 15 years of business  and advisory experience across multiple disciplines including IT, strategy, and finance. He specializes in IT strategy, cost optimization, and technology transformation.

Hari has more than 18 years of management advisory and technology experience, with particular emphasis in IT and enterprise architecture strategy and delivery.

Related Insight:
To learn more, read KPMG’s whitepaper Running the Business of IT: Metrics That Matter, and listen to the podcast IT Analytics Shape the Future of the IT Organization.

Ready for the Baby Boom in IT Outsourcing Contracts?

Jerry Klawitter
Director, Shared Services and Outsourcing Advisory

Over the next few years, an estimated $367 billion of IT outsourcing contract value is expected to be up for renewal. Companies often elect to stay with their existing service providers. In fact, many contracts enter their second or third generation, with little variation in service levels, scope, or contractual protections.

To stay competitive, however, companies need to re-evaluate their IT service delivery strategy on a regular basis. This means exploring new supply options and technical innovations, recognizing improvement opportunities, assessing in-house resources, and identifying any changes in business goals and requirements.

Now is the time to take a careful look at your existing contracts — whether they are at end-of-term or not — and determine whether they can fully address the evolving needs of your organization. It’s not enough to consider whether your service provider can meet your current needs – they need to be the right partner for your future needs too.

Triggers for re-evaluation

Entering the end-of-term period is a common trigger for companies to re-evaluate their contracts. Some might recognize an opportunity to lower prices or increase service levels. Others might be unhappy with their current services and want to switch providers.

For the majority, the most important trigger today is the growing expectation that contracts should enhance business value.

The most important trigger today is the growing expectation that contracts should enhance business value

In the early days of IT outsourcing, the focus was on squeezing out costs, outsourcing whatever could be done more cheaply than with in-house resources. Now companies are looking for ways to both save costs and increase value in terms of product innovation, improved risk mitigation for regulatory requirements, and the ability to enter new platforms like the cloud.

As a result, they want more than a transaction-based relationship with their service provider. They expect a collaborative partnership in which both parties can work together to develop effective strategies for the growth of the company.

Consider your options

Rather than taking a business-as-usual approach, you should consider all your options, keeping in mind the time and effort required for each.

  1. Renew: Although this requires the least effort, simply renewing the contract is not a recommended approach. Standard reports might not reveal any problems, so make sure that service level agreements are being met and terms have stayed competitive. What seemed like a good deal at the initial signing might not be optimal today. Something usually needs to be adjusted, deleted, or added.
  2. Renegotiate: If anything more than minor changes are required to the existing contract, new terms and conditions will have to be negotiated. Companies often underestimate the work required for this option. Areas of discussion can include pricing structures, service descriptions, provider liabilities, and indemnification.
  3. Re-bid: This option involves much more time and energy. In effect, this is the same process the company went through when it first began to outsource IT services. Warning: make sure you understand what went wrong in your original partnership. In some cases, dissatisfaction with one provider only carries over to the new provider because the root cause of the initial failure was a lack of strong management and governance structures. Lack of those competencies will not lead to better results by changing your service provider.
  4. Return to insourcing: Companies can also bring some of their IT services in-house, accept new bids on other services, or find other ways to develop an effective mix of in-house and outsourced strategies. Keep in mind that insourcing requires a significant investment to redeploy or build internal resources that replace one or more service providers.

Contract expiration often provides a valuable opportunity to assess performance, recognize improvement opportunities, and settle on a better course of action. Choosing the right options can help you lower operational and labor costs, free up staff for more strategic initiatives, and gain greater access to innovative capabilities.

About the Author:
Jerry is a director in KPMG’s Shared Services and Outsourcing Advisory practice with more than 20 years’ experience in all aspects of IT delivery. His advisory engagements have spanned the life cycle of transformation services including strategy, solution, implementation, and optimization.

Related Insight:
Learn more about contract renewal by reading The Three Options When an Outsourcing Contract Ends — Extend, Divide or Terminate on the KPMG Institutes and listening to Jerry’s podcast on Considerations for End of Term IT Outsourcing.


China’s Role in IT Business Operations Sourcing

Gary Nowak
Partner, KPMG China

Gary Nowak, from KPMG’s practice in China, sat down with Phil Fersht, CEO of HfS Research, to talk about IT sourcing.

Phil Fersht: Gary, thank you for spending some time today with HfS. Tell us a bit about yourself, your history in the industry, and how you’ve ended up leading a practice for KPMG in China.

Gary Nowak: Sure, thanks Phil. During the summer of 2012, I took a client to visit Eastern Europe, India, and eventually China. I was very impressed with China, specifically Dalian, which is a city with a high concentration of outsourcing located in the Northern part of the country. During the preceding five years, the government specifically identified over 28 cities that could support shared services, so there was impressive infrastructure. After that trip, I requested through KPMG to be sent to China, specifically Shanghai, because shared services was and still is a very hot topic. I’ve been in China since January 2013 and the move here has provided me with a perspective of a dynamic, fast paced, and quickly growing country. Overall, it’s been a tremendous experience both personally and professionally.

Prior to my time in China, I worked in shared services in the U.S., Europe, and Singapore with Arthur Andersen, EquaTerra and now KPMG.

Ironically, back in 2004, I was in Singapore for about 10 months setting up a shared services center for the Asia Pacific region, something I had just done in Europe. I remember going to China and recognizing how complex business was in this country. Ten years later, business still remains complex. Language and culture are also significant considerations when working in China. Mandarin is the main language, with only the higher-level executives comfortable doing business in English. A majority, if not all, of my clients prefer to do business in Mandarin. Once a project is sold, the day-to-day delivery is conducted in Mandarin and I will debrief and get consistent updates from my team in English.

In China, the focus is on internal captive centers rather than outsourcing. But in the upcoming years I see the trend moving towards outsourcing since captives are extremely hard to maintain, and the employment costs continue to go higher and higher.

Today, 90 percent of my client discussions have something to do with setting up China-for-China captive centers. As I talk to multinational clients, I do get these kinds of questions: “What are my options for China? How do you handle the Asia-Pacific? Do I need a center in China and also outside of China?” My opinion, shaped through speaking to over 45 different companies that conduct business in the country, is that if you have a China presence, you need a China shared services center as it can service the rest of Asia-Pac.  However, handling China from outside of China is extremely difficult due to the complexity and language situation and there are very few companies that do it.

To learn more of China’s role in IT business operations sourcing, read the full interview on the HfS blog, Horses for Sources.

Related Insight


Shining the Pulse Crystal Ball –
Top Trends for 2015 and (Far) Beyond

Stan Lepeak
Global Research Director, KPMG LLP

KPMG LLP (KPMG) recently released the results of its quarterly, global 1Q15 Sourcing Advisory Pulse surveys. These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS). The learnings are gleaned from KPMG member firms’ advisors, who are working closely with end-user organizations that are actively exploring or undertaking GBS initiatives, as well as from leading global business and IT service providers.

The first quarter edition of the Sourcing Advisory Pulse examined top trends and predictions for 2015 and beyond, including the following.

  • Top positive and negative market trends
  • Top initiatives and challenges to successfully undertaking these initiatives
  • Top capabilities required to successfully undertake these initiatives.

Attracting, retaining, and managing skilled talent is the number one concern facing organizations globally (see Figure 1). This was also cited as the top negative trend in the last two years’ Pulse surveys. This is evidenced in that organizations are being forced to wage a new, ongoing, and fierce “War for Talent,” despite high unemployment rates in many markets. Clearly skills available are not the skills organizations need. And while organizations continue to place significant emphasis on attracting external talent, many are failing to adequately analyze and remediate their current capabilities to develop and retain existing talent within their organizations. One key dimension to this is better utilization of techniques such as workforce analytics to identify and assess talent. Lacking adequate analytical skills, many organizations are unable to determine if untapped talent exists internally, resulting in efforts being focused on the more costly acquisition of external talent. Following closely on the heels of talent challenges, the Pulse survey identified political and government gridlock as another top negative trend. The trend ranked high across nearly all markets and geographies. The gridlock contributed to renewed concerns over weakening regional and global economies. A key issue here in many markets is to what degree is this situation situational or systemic.


Figure 1

On the positive side of things, maturation of and greater access to innovative technologies such as automation, cloud, mobile, and analytics was a top positive trend cited (see Figure 2). This was also the top positive trend cited the last two years. A somewhat distant second and third were expanding emerging market opportunities for selling goods and services and improving or rebounding global economic conditions. This represents a bipolar view of economic conditions as well as variations of findings across geographies and countries as well as industries and sectors. In general, KPMG advisors that operate globally and support global organizations were more optimistic on economic conditions, and those operating in Europe the most pessimistic. This highlights that despite slowing, globalization is still moving forward to the benefit of global organizations.


Figure 2

Looking forward, organizations need to address each of the following points to capitalize on positive trends and limit the impact of negative ones.

  • The War for Talent – This is a battle that will be long in duration and with its winners and losers. It is important for organizations to understand their current capabilities and develop aggressive and strategic plans to both train and attract key talent. Organizations should also explore emerging technology areas such as robotics process automation (RPA) as a means to address talent shortages. RPA can further reduce the need for human talent to perform certain activities, partially alleviating talent shortages and reducing costs. This will enable organizations to reposition talent for the more value-driven activities.
  • The Adoption of Innovative Technologies – While this will require substantial investment, the ability to truly bring an organization’s technology platforms into the 21st century can play a vital role in helping attract talent and can pay significant dividends over the long term.
  • Big Data and IT – Successful execution around big data and IT will represent perhaps one of the most important strategic advantages in the coming years. This is about more than simply understanding internal benchmarks and identifying customers. With proper implementation, big data and IT can provide an organization with strategies to respond to both internal and external challenges.
  • First-Mover Advantage – As with many other business endeavors, the first movers often are the ones that reap the greatest benefits from new business techniques, such as to better execute talent management, or innovative technologies, such as next generation data and analytics. Many organizations are still waiting on the sidelines to see what changes their competitors will make. Now is the time to assess and overhaul operating models. With the current pace of technology and volatile market conditions, adopting a wait-and-see approach could be disastrous to an organization’s ability to compete over the long term.

3Q14 ITO/BPO industry analysis:
BPO TCV up by 678 percent in 3Q14; ITO lags

Viral Thakker
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.