Global TPI Index: Outsourcing Market Posts Slight Dip for 2012 On Weaker-Than-Usual Fourth Quarter

      Global TPI Index: Outsourcing Market Posts Slight Dip for 2012 On
                       Weaker-Than-Usual Fourth Quarter

Full-year annual contract value of $21.2 billion, down 3 percent from record

Growth in mega-relationships, record performances for BPO, Asia Pacific lead

PR Newswire

STAMFORD, Conn., Jan. 16, 2013

STAMFORD, Conn., Jan. 16, 2013 /PRNewswire/ --Information Services Group
(ISG) (NASDAQ: III), a leading technology insights, market intelligence and
advisory services company, today released data showing that the global
outsourcing market dipped slightly in 2012 on a weaker-than-usual
fourth-quarter performance.

The 4Q12 Global TPI Index, which measures commercial outsourcing contracts
with an annual contract value (ACV) of $5 million or more, totaled $4.8
billion in the fourth quarter, a drop of 27 percent from the fourth quarter of
2011 and 11 percent from the third quarter of 2012, which was the second-best
third quarter on record.

For the full year, the global market's ACV totaled $21.2 billion, a decline of
just 3 percent from its record performance in 2011. Leading the market in 2012
were mega-relationships (those contracts with an ACV of $100 million or more);
the business process outsourcing (BPO) segment, which had its best full-year
performance on record; and Asia Pacific, which also had a record year.

In total, the market awarded 1,006 contracts during 2012, down 13 percent from
the previous year but still above the five-year average for awards.

"Fourth-quarter results typically improve on those for third quarters, but
this one did not, mainly because it followed such a substantial third
quarter," said John Keppel, CMO and President, ISG. "Distractions from
elections in the U.S. as well as Superstorm Sandy could partially explain this
quarterly drop, as October and November were the lightest months of the year.
Still, the market's full-year performance nearly met the record it set in

The TPI Index, presented by ISG, provides a quarterly snapshot of the sourcing
industry for clients, service providers, analysts and the media. For more than
a decade, it has been the industry's authoritative source for marketplace
intelligence related to outsourcing transaction structures and terms, industry
adoption, geographic prevalence and service provider metrics.

The global commercial market awarded eight mega-relationships in the fourth
quarter and 34 for all of 2012, the largest full-year total since 2006. For
the second straight year, one-quarter of all mega-relationships were awarded
in emerging markets. The ACV of mega-relationships fell 50 percent from the
fourth quarter of 2011 and 24 percent from the third quarter of 2012. However,
mega-relationship ACV for all of 2012 rose 7 percent from the year before.

By scope, the market awarded $1.9 billion in BPO contracts during the fourth
quarter, down 1 percent year-over-year but up 5 percent sequentially.
Full-year BPO ACV reached $7.9 billion, an increase of 14 percent over 2011.
Leading the way were large awards in Industry-Specific BPO and Facilities
Management, as well as renewals of several significant first-generation HR
Outsourcing contracts.

In contrast, the ACV of contracts for IT outsourcing (ITO) dropped to $2.9
billion, a decline of 37 percent from a year ago and 18 percent from the prior
quarter. For the full year, ITO ACV totaled $13.3 billion, a decline of 11
percent. The segment suffered from a difficult comparison with 2011, which
included the $1 billion Siemens-Atos mega-relationship. However, the 650 ITO
contracts signed during 2012 marked the second-best annual total on record.

By region, the Americas awarded $1.7 billion in ACV during the fourth quarter,
a drop of 28 percent year-over-year and 9 percent sequentially. However, the
$7.9 billion in ACV signed in the Americas during all of 2012 represented just
a 3 percent drop from 2011, despite significant political and economic
uncertainty in the region's largest market, the United States. Latin American
markets heated up in 2012, as ACV in Brazil and other countries in the
sub-region nearly doubled from 2011.

In Europe, the Middle East & Africa (EMEA), fourth-quarter ACV of $2.6 billion
was down 29 percent from the year before and 6 percent from the prior quarter.
For the year, ACV in the region dropped 12 percent to $10.2 billion but
remained within its five-year average. Notably, while the ITO segment in EMEA
took a substantial downward turn in 2012, the BPO segment continued a steady
climb begun in 2010.

In Asia Pacific, the $500 million in fourth-quarter ACV was flat
year-over-year but declined 34 percent sequentially. However, the region
tallied a record $3.1 billion in full-year ACV, up 55 percent over 2011
despite significant volatility in the market. While Australia and New Zealand
experienced a reversal of recent growth trends, outsourcing by companies in
India, China and Southeast Asia reached all-time highs, benefitting from
increasing contract values and volume.

Said Keppel: "Looking forward, we see a mixed picture. We note some
transaction push-out, but it is not nearly as extreme as when the recession
started in 2008. The short-term pipeline appears healthy – and better than
ever according to service providers – yet the longer-term view into 2013 has
not yet solidified. The sustained BPO performance is encouraging, and renewed
positivity in the U.S. market as well as underlying structural trends in the
Americas give us added cause for optimism going forward."

ISG presented the 4Q12 Global TPI Index during a conference call for media and
analysts today. To listen to an audio replay of the call and view presentation
slides, please visit

About Information Services Group
Information Services Group (ISG) (NASDAQ: III) 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 800 employees
and operates in 21 countries. For additional information, visit

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SOURCE Information Services Group (ISG)

Contact: Andrew Park, ISG, +1-919-259-9252,; or
Gwennie Poor, Cohn & Wolfe for ISG, +1-212-798-9842,
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