Global Outsourcing Market Transction Volume Seven percent Dropped in First Quarter

Global outsourcing market decreased 7% in transaction volume in the first quarter of 2009 as compared to forth quarter of 2008 , according to Everest Research Institute the latest quarterly Market Vista: Q1 2009 report on global outsourcing and offshoring activity, the global annual contract value (ACV) dropped 16 per cent to $2.97 billion during the period and BPO industry dropped 15% in transaction volumes.

“Our analysis reveals that aggregate US$ revenues across the Market Vista Index of suppliers continued its decline and dropped by 2.2% in Q1 2009, falling in step with the 2.5% decline in previous quarter. Revenues of offshore-centric suppliers registered a 2.3% decline, while those of traditional global suppliers declined by 2.2 percent.” Mr Nikhil Rajpal, Principal, Everest Group, said.

The North American outsourcing market witnessed a 15 per cent decrease in transaction volume during the quarter. Although Europe witnessed a reduction in transaction volumes, its ACV was higher than quarter ended December, primarily pushed up by some large deals.

Says Mr H. Karthik, Research Director, Everest Research Institute, “while other industries inked lesser number of outsourcing deals in the first-quarter, the banking and financial services (BSFI) sector actually picked-up momentum to register a 30 per cent growth in transactions, fuelled especially by increased activity in Europe.”

Everest said that captive-related activities (establishment of new captive centres) included 20 new announcements in the first-quarter, compared to 22 in each of the previous two quarters. Asia continued to dominate offshore delivery.

“We expect the overall market activity to start picking up by the fourth quarter of this year,” Mr Nikhil pointed out.

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