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Global TPI Index: Outsourcing Market Posts Slight Dip For 2012 On Weaker-Than-Usual Fourth Quarter

Stocks in this article: III

STAMFORD, Conn., Jan. 16, 2013 /PRNewswire/ -- Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today released data showing that the global outsourcing market dipped slightly in 2012 on a weaker-than-usual fourth-quarter performance.

The 4Q12 Global TPI Index, which measures commercial outsourcing contracts with an annual contract value (ACV) of $5 million or more, totaled $4.8 billion in the fourth quarter, a drop of 27 percent from the fourth quarter of 2011 and 11 percent from the third quarter of 2012, which was the second-best third quarter on record.

For the full year, the global market's ACV totaled $21.2 billion, a decline of just 3 percent from its record performance in 2011. Leading the market in 2012 were mega-relationships (those contracts with an ACV of $100 million or more); the business process outsourcing (BPO) segment, which had its best full-year performance on record; and Asia Pacific, which also had a record year.

In total, the market awarded 1,006 contracts during 2012, down 13 percent from the previous year but still above the five-year average for awards.

"Fourth-quarter results typically improve on those for third quarters, but this one did not, mainly because it followed such a substantial third quarter," said John Keppel, CMO and President, ISG. "Distractions from elections in the U.S. as well as Superstorm Sandy could partially explain this quarterly drop, as October and November were the lightest months of the year. Still, the market's full-year performance nearly met the record it set in 2011."

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.

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