Outsourcing Hits Record High in Asia Pacific
From:the outsource blog Release time:2016-07-17
Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today released data showing that the value of the outsourcing market in the Asia Pacific region surged to its highest level on record in 2012.
 
The Asia Pacific TPI Index, which measures commercial outsourcing contracts valued at $5 million or more, recorded annual contract value (ACV) during 2012 of $3.1 billion, a 55 percent increase over the previous year. The steep rise was driven by new scope awards, which accounted for 88 percent of the contracts awarded, as well as record performances by emerging markets and business process outsourcing (BPO).
 
The number of outsourcing contracts awarded in the region also climbed, rising 6 percent year-over-year to 134. Asia Pacific was the only region of the world in which either ACV or contract counts increased during 2012.
 
‘Asia Pacific’s robust 2012 performance contrasted sharply with the wider global picture in which Europe struggled and the Americas remained flat,’ said Sid Pai, Partner & President, ISG Asia Pacific. ‘Moreover, in contrast to peaks and troughs recorded in the other regions, the number of contract awards here has followed a pattern of consistent growth.’
 
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.
 
By scope, business process outsourcing (BPO) had its best year ever in 2012. The $1.4 billion of ACV in the segment represented a 133 percent rise over 2011, led by contracts for Contact Center and Industry-Specific BPO. The total number of BPO contracts awarded in Asia Pacific has doubled since 2007.
 
IT outsourcing (ITO) accounted for $1.7 billion of the region’s ACV, a rise of 21 percent year-on-year. The number of contracts awarded rose 16 percent to 87, the highest count for ITO in Asia Pacific since 2009.
 
By country, the emerging markets in Asia Pacific also experienced record activity in 2012. India and South Asia increased their ACV 175 percent to $1.5 billion, China’s ACV more than tripled year-over-year to $400 million, and the ASEAN countries more than doubled their ACV to $220 million.
 
In fact, every country registered growth in 2012 except Australia/New Zealand (ANZ). The region’s most mature market saw ACV drop 40 percent to $690 million for the year, enabling India and South Asia to surpass it as the largest market in Asia Pacific.
 
‘Within Asia Pacific, we see some mixed signals that make it difficult to predict market performance in the next half year,’ Pai said. ‘The rise in BPO activity in the region has been remarkable, as has the growth in the emerging markets. However, economic factors affecting the rest of the world are beginning to be felt in the region – especially in Australia and India – so it remains to be seen whether 2013 can sustain 2012’s robust levels.’