BFSI grows despite drop in overall outsourcing: Everest Market Vista study

Gurgaon: Global outsourcing market decreased seven percent in transaction volume in Q1 2009 as compared to Q4 2008, according to the latest quarterly Market Vista: Q1 2009 report on global outsourcing and offshoring activity by the Everest Research Institute. During the same period, the global annual contract value ( ACV ) dropped 16 percent from $3.55 billion to $2.97 billion. BPO activity dropped 15 percent in transaction volumes.

Nikhil Rajpal, Principal, Everest Group said, "Our analysis reveals that aggregate dollar revenues across the Market Vista Index of suppliers continued to decline and dropped by 2.2 percent in Q1 2009, falling in step with the 2.5 percent decline in previous quarter. Revenues of offshore-centric suppliers registered a 2.3 percent decline, while those of traditional global suppliers declined by 2.2 percent."

The North American outsourcing market witnessed a 15 percent decrease in transaction volume during the first quarter this year compared to the previous quarter. Although Europe witnessed a reduction in transaction volumes, its Annual Contract Value ( ACV ) was higher than Q4, primarily pushed up by some large deals.

H Karthik, Research Director, Everest Research Institute said, "Whereas other industries signed lesser number of outsourcing deals in Q1, the banking and financial services (BSFI) sector actually picked up to register a 30 percent growth in transactions, fueled especially by increased activity in Europe."

Rajpal stated, "In Q1 2009, several incidents have culminated to altogether reshape the outsourcing and offshoring market. Be it Tech Mahindra's historic acquisition of Satyam, or violence in Mexico leading to shifts in risk, or speculation related to captive divestitures-all of these new dynamics have made it imperative for business leaders to develop a more profound understanding of the fast-changing market dynamics to help steer through these turbulent times."

Everest Research Institute's quarterly Market Vista reports provide data and analysis of deal trends in the outsourcing and offshoring market, captive landscape, current and emerging locations, key supplier developments, and key developments across the top 20 financial services companies globally. Traditional supplier profiles include Accenture, ACS , Atos Origin, Capgemini, Convergys, CSC , EDS , Hewitt, IBM , Perot Systems and Unisys. Offshore-centric supplier profiles include Cognizant, EXL, Genpact, HCL, Infosys, Tech Mahindra, Tata Consultancy Services, Wipro and WNS. The Market Vista Q1 report also includes special sections on industry-specific FAO and an analysis of the outsourcing market in Eastern Europe.