This morning we presented the 1Q11 Global TPI Index, which found that restructuring activity returned to historical norms following last year’s record spike, but the value of new scope awarded remained steady.
Total contract value (TCV) in the global outsourcing market was $17.5 billion during the first quarter of 2011. TCV dropped 28 percent from the first quarter of 2010 and 25 percent over the fourth quarter of 2010. However, restructurings, defined as contracts that are renewed, renegotiated or restructured, accounted for nearly all of the decline. New scope TCV of $14.9 billion was unchanged year-over-year and declined just 7 percent sequentially.
Among the highlights was business process outsourcing (BPO), which recorded its second-best quarterly performance in the last two years. By contrast, IT outsourcing (ITO) contract values dropped significantly, driven by the decline in restructurings. However, as with the broader market, new scope of nearly $10 billion in the segment was well within range of first quarters historically.
Among the regions of the world, Europe, the Middle East and Africa and Asia Pacific turned in steady performances. Meanwhile, the Americas suffered its third straight quarterly decline, with TCV falling 56 percent year-over-year but up 17 percent sequentially.
To listen to a replay of the 1Q11 Global TPI Index presentation and view presentation slides, please visit http://www.tpi.net/knowledgecenter/tpiindex/. We will share specific insights on market activity in Europe, the Middle East and Africa (EMEA) with the release of the 1Q11 EMEA TPI Index on Thursday, April 21st.
