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December 2016 | Outsourcing Blog | BPO Industry Updates and Articles

According to 3Q 2016 ISG Index™, released by technology insights and market intelligence firm Information Services Group (ISG), the global sourcing market grew by 11 percent, propelled by continuous growth in traditional sourcing and best-ever performance in the as-a-service segment.

During this year’s third quarter, the annual contract value (ACV) of commercial outsourcing contracts in the traditional sourcing segment grew by five percent to $5.8 billion. Moreover, with the accelerated movement of traditional services to the cloud, the quarter posted a record growth of 20 percent in the as-a-service segment reaching $3.7 billion in value. The ACV of both markets is $9.5 billion, which is the highest ever for a third quarter since 2014, due to strong performance of the as-a-service segment. The notable combined value is also considered a strong indication for the performance of the entire year.

Q3 2016 Breakdown of Outsourcing Markets per Segment

Q3 2016 Breakdown of Outsourcing Market per Region

Global outsourcing industry in review

Market Predictions
According to John Keppel, president of ISG EMEA and Asia, they are revising their initial forecast of a flat market for 2016. They are projecting an improved performance in the mid-single-digits range for traditional outsourcing and as more and more enterprise buyers are adopting mobility and are moving processes to the cloud, they are predicting gains above 30 percent in the as-a-service market.

Philippines Posts 7.1% Growth in Q3
As for the Philippines, it recorded a 7.1% growth in gross domestic product (GDP)-the fastest in Asia for this year’s third quarter.

The country is seen to remain resilient amid external threats such as the US election results and President Rodrigo Duterte’s statements against the US. In fact, according to economists surveyed by Bloomberg, the country is seen to grow by six percent through 2018.

The Philippine economy’s robust growth is backed by President Duterte’s plans to boost infrastructure spending and $50 billion of revenue from remittances of Filipino workers abroad as well as the business process outsourcing (BPO) industry.


Outsourcing Country Risk Index

Take a look at the movements of key outsourcing markets in the Country Risk Index report created by SupplyWisdom.com. Data collected is analyzed across a risk criteria comprising several complex factors such as geo-political soundness, financial stability, scalability, infrastructure, macro-economic, quality of life, and overall business environment.

Two countries are seen retaining their top position, backed by well-established IT-BPM markets. One of Q2’s top three countries was found slipping a few spots due to domestic political volatility. Lastly, a key player is moving up the rankings and is tagged as an emerging IT-BPM hub in the Asia-Pacific region propelled by the support from its government.

 

Q2 Global Outsourcing Industry