Global outsourcing market on a growth trajectory

Bangalore, July 20 (UNI) Midway into 2006, the global outsourcing market was ahead of last year in terms of total contract value awarded, according to an analysis by TPI, the world's largest Global Service Delivery Group.

TPI Managing Director Sidhartha Pai told newspersons here today that the Indian service providers have achieved rapid strides in growth of offshore outsourcing and their market share had risen to 5.2 per cent of the total value of contracts signed this year, up from less than three per cent in 2005 and just over one per cent in 2004. The size of deals the Indian service providers were winning was also increasing by 25 per cent from an average deal size of 128 million dollars in 2005 to 159 million dollars in 2006 till now. Of the 11 contracts, totalling 1.74 billion Dollars awarded to Indian providers this year, nine were in India's traditional areas of strength of application development and maintenance or finance and accounting.

He said that despite the continued controversy surrounding offshoring, a record level of outsourcing deals currently under negotiation involved offshoring.

Announcing the second quarter developments in the global sourcing industry, Mr Pai said a record breaking 92 business process outsourcing (BPO) contracts were signed during the first half of 2006, registering an increase of 58 per cent year-on-year. The contracts were valued at US Dollar 11 billion, a 20 per cent gain over the corresponding period of previous year.

He said that while little information was available on the breakdown of outsourcing between onshore and offshore operations, an analysis of deals revealed that almost half (47 per cent) involved offshoring or 'Global Service Delivery'.

Mr Pai said that among the industry sectors adopting BPO strategies, financial services led the way with 27 contracts worth over four billion dollar, representing almost 40 per cent of the total BPO global market share.

He said the mature Indian vendors have achieved significant growth and IT majors Infosys, Satyam, Wipro, TCS and HCL were beginning to win larger and more valued deals. However, the big six of outsourcing -- Accenture, ACS, CSC, EDS, HP and IBM -- still dominated the offshore outsourcing market, having won almost three quarters of contracts in 2006 compared to 18 per cent by the Indian providers.

UNI MV GD GM1840