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Global Outsourcing Industry at Record Highs

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Activity in the global outsourcing industry for the previous three months reached its highest level ever in a second quarter, producing record contract values for the period and contributing to the one of the strongest first halves ever, according to the latest market data from Information Services Group (ISG) III -1.70%

Data from the ISG Outsourcing Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show a record 340 contracts were signed in the second quarter, with the greatest growth coming from deals valued at under $40 million annually. This record-high volume generated $6.4 billion in ACV, also an all-time record for the period, and up 72 percent versus last year’s weak second quarter, despite a falloff in the number of mega deals valued at more than $100 million.

Coming on top of a strong first quarter this year, the second-quarter results pushed the first-half contract count to a record 663, up 30 percent, and ACV to $12.4 billion, the third-best mark ever for a first half and up 34 percent over last year.

“We are seeing broad-based strength across the entire global outsourcing market, with growth almost everywhere we look,” said ISG President and Partner John Keppel. “Deal counts are strong across the board, global ACV is surging, all three regions – Americas, Europe, and Asia Pacific – are seeing upward momentum, information technology outsourcing (ITO) continues to forge ahead, and, in a potential bright spot for the global economy, the manufacturing sector is seeing a significant rebound in deal activity and value. In short, the demand for outsourcing is extremely robust at the moment, and that bodes well for the rest of the year.”
July 16, 2014
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