[REVIEW 2010] Global Outsourcing Slows Down to Re-adjust CourseEd Nair, Editor, Global Services
The effects of the recession were seen complete in 2010 with most indicators pointing south. But the fundamentals are strong for a steady recovery. In that sense, the year was a brief interlude.
The full impact of the 2008 recession on the global services industry was only beginning to get felt in 2009, but it actually played out in 2010 in terms of growth rates, total contract values, new customers gained, and type of contracts. These are the real measures of outsourcing activity and these measures tell a tough story in 2010.
The silver lining on the dark clouds of 2010 is that despite the bad news, the size of the outsourcing industry did not shrink. The industry is not depressed. In fact, it grew at modest rates, whichever source you allude to. Global Services does not size up the overall industry, but evidences from GS100 data also suggest that the volume of outsourcing has grown. Therefore, the good news is that the big picture is intact. (See Fig. 1)
TPI tracks deal activity on a quarterly basis. Global deals larger than $25M in TCV get tracked as the global broader market. Though not a perfect measure, it is still a great indicator of global deal activity correlated with size. For full year 2010, the TCV was $79.4 B, which is 11 percent down from 2009. The figure of course does not include deals below $25M in TCV, which if take into consideration may indicate a net increase over 2009.
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