Market Analysis

ITMS AND BPO CONTRACT ANALYSIS—Q4 2019

WHAT THIS MARKET ANALYSIS REPORT COVERS

 

This quarterly analysis report provides a detailed study of information technology management services (ITMS) and business process outsourcing (BPO) contracts signed during the most recent eight quarters (Q1 2017 to Q4 2019), including estimated total contract value (TCV) and annual contract value (ACV), which sectors consume most of these services, ITMS-BPO service breakups, service providers’ performance in these markets, and digital services by type.

 

WHAT YOU’LL KNOW AFTER READING

 

Readers will gain insight into:

• ITMS Contracts Analysis by Region

• ITMS Contracts Analysis by Service Type

• ITMS Contracts Analysis by Key Verticals

• ITMS Contracts Analysis by Main Vendors

• BPO Contracts Analysis by Region

 

KEY MARKET DYNAMICS

 

Plunging outsourcing contract numbers: In Q4 2019, the number of contracts decreased by 7% compared to Q3 2019. The total contract value (TCV) and annual contract value (ACV) in Q4 2019 decreased by 11% and 15% respectively over Q3 2019. However, the year-over-year (YoY) TCV and ACV contract values grew by 46% and 42%, respectively. ITMS-BPO contracts grew consistently in the last two quarters; there was a surge in the value of the contracts signed in Q3 and Q4 2019.

 

Stable growth in ITMS contracts: ITMS contract value for Q4 2019 grew by 1% and by 47% over the previous quarter, and YoY respectively. Compared to last quarterly analysis, we observed a slow and steady quarter-over-quarter (QoQ) growth with a robust YoY growth. However, the number of ITMS contracts decreased by 10% compared to Q3 2019. The complexity and scope of ITMS managed services in outsourcing contracts is increasing, particularly those that move beyond the threshold required to be included in this list.

 

Complex ITMS and infrastructure contracts in trend: In the last three consecutive quarters, we saw a surge in multi-ITMS (contracts covering multiple infrastructure types) growing 234%. Similarly, infrastructure contracts rose by 85% YoY. Workplace transformation contracts mainly drove this. We foresee a huge demand in coming quarters for digital transformation and workplace contracts, primarily because workforce enablement becomes an essential component of broader digital requirements.

 

The public sector leads the pack in Q4 2019: Despite political instability in Europe (Brexit) and the US-China trade war in the IT services market, in Q4 2019, the public sector’s TCV grew by 4% and 200% compared to the previous quarter and YoY respectively. The telecom sector stood out as the second-largest contributor in this space, growing 57% YoY. The public sector remained a significant target market for outsourcing in both ITMS and BPO services spaces; even after excluding IDIQ contracts from the analysis, it remained the biggest.

 

EMEA drives ITMS contract signings: US ITMS contract values have declined for seven quarters, except for Q3 2018. In Q2 and Q3 2019, the US market started to recover; however, in the latest quarter, it declined again by 30% QoQ with 44% of the share. The EMEA region accounted for 45% of the contracts and witnessed a growth in both QoQ (81%) and YoY (82%).

 

WHO SHOULD READ THIS REPORT

 

Executive leaders and business unit leaders, technology leaders, advisors and outsourcing managers in the ITMS and BPO industry.


ITMS AND BPO CONTRACT ANALYSIS—Q4 2019

$2,000.00
(20 Pages)

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