TPI Index Cites Record Number of Global Outsourcing Contracts in 2005

Filed in archive Outsourcing News on January 13, 2006

TPI, Inc. has released its year-end market observations in the TPI Index, a quarterly report on global outsourcing.

2005's fourth quarter had the highest number of outsourcing transactions ever awarded (for contracts equal to or greater than $50 million) with a total of 293 contracts.

Also, the total contract value (TCV) for this quarter's mega deals ($1 billion or greater) was the highest since 2004's third quarter with five out of six mega deals awarded in December alone.

In addition, the quarter's total mega deal value was $11.2 billion or 40% of the 2005's mega deal value. However, 2005 had the lowest TCV for mega deals since 1996 with less than $27 billion.

Peter Allen, Partner and Managing Director of Global Practices at TPI., said, "The December surge in industry-wide mega deals produced a nice finishing surge for 2005 but was not enough to meet 2004 TCV levels." 2005 had a five percent decline in total value of global commercial outsourcing contracts.

According to TPI, 2005 saw the continued decline of commercial IT outsourcing value. They predict that if this continues, 2006 and 2007 will have absolute decline in overall revenue from IT outsourcing. However, BPO will see a growth rate of between 10 to 15 percent in 2006.

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