Information technology outsourcing (ITO) ACV
rocketed 50 percent above the prior year, reaching a new high of US$2.
Data from the ISG Outsourcing Index, which measures commercial outsourcing contracts with annual contract value (ACV
) of $5 million or more, show that fourth-quarter ACV
surged 27 percent, to $5.
The region's year-to-date performance, with ACV
up 18 percent, was fueled by sharp increases in the value of new-scope contracts, up 30 percent; ITO contracts, up nearly 20 percent, and BPO contracts, up 17 percent.
4 billion in ACV
, while the annual value of restructured contracts, at nearly US$500 million, exceeded last year's performance and was above its prior four-half range.
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.
Established leaders Accenture, ACS-Xerox, Capgemini, Genpact and IBM account for nearly 65 percent of the FAO market's ACV
Deals with both ITO and BPO components drove the ACV
significantly in Q4 on account of a few mega-deals of this nature.
There were equal amounts of volatility (double-digit ACV
swings in 11 of the 27 industries) and stability (12 of the 27 industries saw ACV
changes of 5 percent or less) in outsourcing activity in the last year.
in that period was down 11 percent from the prior 12-month period, yet the number of contracts awarded for the most recent 12 months - 1,183 - is at an all-time high.
In fact, 10 of the 13 mega deals - contracts in which the TCV is $1 billion or greater - awarded in the first half of the year were awarded in EMEA, along with 16 of the 24 mega relationships - those contracts with an ACV
of $100 million or more.
Pai pointed out that the number of contracts awarded in the last decade has grown by 50 percent, while ACV
has remained remarkably consistent.
With several mega deals (contracts exceeding $1 billion in TCV), Europe, the Middle East and Africa (EMEA) continues to lead in outsourcing adoption, with more than 65 percent of the global contract TCV and ACV
coming from this region.