ISG (Information Services Group) has released data which showed that the value of outsourcing in Asia Pacific has hit an all time high level in the year 2012. ISG is a leading company in providing market intelligence, technology insights and advisory services.
The TPI Index, measured by ISG, for Asia Pacific outsourcing market measures the commercial outsourcing contracts which have value over $5 million. The TPI Index recorded ACV (annual contract value) of $3.1 billion in 2012. This shows an increase of 55% when compared to 2011.
The TPI Index by ISG actually gives an in-depth idea of the outsourcing industry for service providers, clients, media and analyst. The index has served as an authoritative source for the entire outsourcing industry.
Rise in ACV and number of contracts
The spectacular rise in the figure in Asia Pacific outsourcing market can be attributed to the new scope awards. Around 88 percent of the contracts belonged to this category. Business process outsourcing (BPO) and accentuated performances of emerging markets also played significant roles in raising the figure to a record high.
Not only the value, but the number of contracts in outsourcing also increased seeing a 6 percent increase year-over-year and the count reached is 134. Asia Pacific remains the only region in outsourcing which witnessed an increase in number of contracts or ACV in 2012.
According to Sid Pai who is partner and President at ISG Asia Pacific said that the growth of outsourcing in Asia pacific, led by India and China, has been sustainable and consistent as compared to European and US markets. The region shows growth in both ITO and BPO.
Growth of both BPO and ITO
BPO industry saw its best growth during 2012 with ACV of $1.4 billion in total. This is a 133 percent growth when compared to 2011. The total number of such contracts in Asia Pacific region is double than that of 2007 and Industry-Specific BPO and Contact Center contracts account for a major chunk.
IT outsourcing industry earned $1.7 billion ACV which is a 21 % rise year-on-year. The number of contracts is also the highest since 2009 with an increase to 87 percent.
Every country in the region marked significant growth except New Zealand and Australia with India and South Asia becoming the leaders in the region. Pai stated that there are mixed signals in the Asia Pacific which makes it difficult to predict the performance of the outsourcing market in the region in the next six months.
Even though the growth of the BPO industry in the Asia Pacific region, in particular the emerging market has been significant, economic elements are uncertain.
The economic factors that affect the other parts of the world are hitting this region as well; especially India and Australia which makes it uncertain whether 2013 will maintain the robust levels of 2012. ISG presented these findings over a conference call targeted at analysts and media.