Outsourcing hits second quarter wall

By Freddie Pierce
Over the last decade, the only three certain things were death, taxes and a growing global outsourcing market. Maybe we should hold off on that last on...

Over the last decade, the only three certain things were death, taxes and a growing global outsourcing market. Maybe we should hold off on that last one, however.

Outsourcing declined by 18 percent in the second quarter in the number of large contracts awarded, data from TPI showed last week.

The drop in large contracts totaled $16.4 billion from the same quarter last year, and is being attributed to a weak demand in the Americas. Total contract value (TCV) in the Americas slipped 51 percent, according to TPI’s John Keppel.

The drop in TVC in outsourcing didn’t have a sizable effect on the total number of outsourcing contracts awarded, however. Total outsourcing contracts fell just one percent, according to TPI.

While some outsourcing markets are starting to have problems, the Asia-Pacific market is growing at a substantial rate. Outsourcing in the region grew by 55 percent year-on-year, while the Middle East and Africa witnessed outsourcing growth of 13 percent in TCV during the second quarter this year.

SEE OTHER TOP OUTSOURCING STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK

Overcoming outsourcing language barriers

Wireless industry continues to cut and outsource jobs

Should you outsource Facebook marketing?

Check out July’s issue of Supply Chain Digital!

While the Indian market may be cresting, the largest outsourcing firms in the country are doing just fine. TCS, India’s largest outsourcer, reported quarterly revenue of $2.4 billion, up 34.4 percent from the same quarter last year.

India’s second largest outsourcing partner, Infosys, also saw substantial growth, as second quarter revenue was $1.7 billion, up 23 percent from last year.

The report from TPI only covers large outsourcing contracts, which are defined as having a value of at least $25 million. So while large contracts were reduced heavily in the second quarter from last year, smaller contracts could be doing just fine.

Share

Featured Articles

One Week to Go: Procurement & Supply Chain LIVE Dubai

With one week until Procurement & Supply Chain LIVE Dubai, don’t miss out on your chance to attend the ultimate virtual event for the Middle East & Africa

Three Sponsors Join Procurement & Supply Chain LIVE London

Procurement & Supply Chain LIVE London welcomes Focal Point, Coupa, and OpenText as its latest sponsors

P&SC LIVE New York: One Month to Go!

Just one more month to go until Procurement & Supply Chain LIVE New York, don’t miss out on your chance to get tickets to the two-day virtual event

Telescope International joins P&SC LIVE Dubai as a Sponsor

Digital Supply Chain

P&SC LIVE New York: Don Perigny, Supply Chain Director

Operations

Top 100 Women 2024: Donna Warton, Microsoft – No. 10

Technology