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Mega ITO Deals Awarded to Emerging Markets

by: Sarah Joson

Wednesday, July 25, 2012 | Outsourcing News |

Emerging Markets Nab Super-sized IT Outsourcing Contracts

According to the 2012 Global TPI Index, an upsurge in super-sized IT outsourcing contracts with values reaching $1 billion and up from companies based in the US and Western Europe were sent out offshore. In fact, during the same period of last year, only one mega deal was moved offshore, compared to this year’s five big ones. Three of which were subcontracted to Brazil and India. Four of the deals were new ones, and one was restructuring.

John Keppel, Partner and President of Research and Managed Services at ISG, said mega-deal activity varies almost every quarter, but the offshoring destinations are noteworthy. He added that emerging markets will shape the future of outsourcing and that the US and Western Europe have a major influence on the impending restructuring activity within the sector.

Moreover, 30 percent of the mega ITO deals’ global contract value amounting to $6.3 billion awarded in Q2 2012 were from the telecom, banking, and consumer goods industries. Mega-partnerships with annual contracts valued $100 million or more were also initiated during the second quarter.


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