Contracts in BPO/KPO - Highlights of 2008

Wednesday, 28 January 2009

While first half of 2008 was about growth and opportunities, economic crisis and recession dominated the later half of 2008. Similar to most other industries, the impact of economic downturn has started showing up even in the BPO sector.

As compared to 403 deals in 2007, ValueNotes Outsourcing DealTracker registered only 302 deals in 2008. The average deal value and duration also remain largely unchanged between previous and the current year.

Significant BPO/KPO contracts in 2008

Vendor	Client	Contract Details	Size	Tenure
Lockheed Martin Corporation	Transportation Security Administration (USA)	$1.2 b human resources outsourcing contract to Lockheed Martin	$1.2 b	8 years
Perot Systems	Harvard Pilgrim Health Care	$1 b contract to operate and support Harvard Pilgrim's information technology infrastructure, business applications and administrative business operations.	$1 b	13 years
R.R. Donnelley & Sons Co.	Houghton Mifflin Harcourt Publishing Co.	Houghton awards print management contract to R.R. Donnelley & Sons Co. The company will provide print management services	$875 m	NA
HP	BT Group Plc	BT awards Infrastructure and Services outsourcing contract to HP. HP will provide service desk and end user services to 100,000 users of BT in UK	$660 m	7.5 years
Cable & Wireless (C&W)	Aviva	C&W will provide a full communications suite for 72 separate services, including voice telephony, data, local and wide area networks and international services - to Aviva’s staff based in the U.K. and India.	$584 m	6 years

Source: ValueNotes Outsourcing DealTracker

Contracts by Vertical / Industry
Public sector contributed to about one fifth of the total contracts. While BFS sector still dominates the BPO market with 11% of the total contracts signed, the overall share has reduced significantly from 34% last year. In fact, the overall decrease in the number of contracts is largely due to a drop in the number of contracts signed by BFS companies.

Contracts by Vertical / Industry

Source: ValueNotes Outsourcing DealTracker

“Others” which comprises 7% of the deals outsourced in 2008 includes the law firms, research, BPO and consulting companies. The other notable industries were travel & logistics (8%), manufacturing (7%) and Healthcare (6%).

Contracts by Services
With little over one fourth of the total contracts, CRM services led the total contracts signed in this year.

Contracts by Services in 2008

Source: ValueNotes Outsourcing DealTracker

About 15% of the total deals were signed in the knowledge services segment, which include rapidly growing areas like publishing, legal, research & analytics, engineering design, media, e-learning and R&D Services. The “other services” includes deals awarded for Medical Transcription, Underwriting, Supply chain services and Clinical research services. A significant number of contracts were signed for multiple services. We believe this trend is set to grow in future as both buyers and service providers mature in their outsourcing strategy.

The above article is an excerpt from ValueNotes annual analysis of "Deal Tracker". To find out more about the product, please contact Rakhi at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

< Prev		Next >

[ Back ]