As per the TPI index, outsourcing is struggling on continuous basis for the last one year due to financial crisis because less dollar amount was signed in the first half in comparison with the year of 2008. TPI this week released its second quarter and first half figures for the outsourcing market in 2009. TPI study witnessed that companies are going through a bad patch during the last one year, they are getting very tactful in order to take sourcing decision. However, they further noticed some activities for the last six month that indicates the worst may be finally over.
The sourcing advisory firm, which tracks commercial outsourcing contracts valued at $25 million or more, found that the total number of contracts that company received in the second quarter fell by 7.5% from the first quarter to 135. The total contract value (TCV) went up by 5% in the second quarter to $20.5 billion, but the annualized contract value – which is TCV divided by the duration of the contracts – fell by 5% from the first quarter to $3.6 billion.
The BPO market is declining faster compared to other IT outsourcing market because TPI says the latter has benefited from network services accounting for about half of the mega-deals so far in 2009. TPI further noted that the total contract value for BPO for the first half is lower than all first halves number for the last five year.
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“Compared to the first six months of 2008, which saw record levels of sourcing activity, the market in the first half of 2009 awarded 11% fewer contracts with 22% lower [total contract value] and 28% lower [annual contract value],” TPI reported in a press statement.