Tuesday, July 17, 2007

According to TPI Index report for 1H 2007, the total contract value (TCV) of sourcing contracts awarded in 1H 2007 stood at USD 33 billion, reflecting a 34 percent decline over the TCV awarded in 1H 2006. This value is the smallest first-half TCV value since 2001. In addition, the total number of sourcing contracts witnessed a 25 percent decline in 1H 2007 as compared to 1H 2006.

The annualized contract value (ACV), or average annual spending also declined by 30 percent over 1H 2006 to reach USD 5.5 billion in 1H 2007. The study also reported that the number of BPO contracts awarded in 1H 2007 (78 contracts) were lower as compared to the number of contracts in 1H 2006.

In addition, according to the study, only 56 sourcing contracts were awarded in 1H 2007 in the Americas as compared to 86 contracts in 1H 2006. The TCV of these contracts declined from USD 24 billion in 1H 2006 to USD 10 billion in 1H 2007, reflecting the lowest first-half TCV value since 1994. In contrast, TCV of the contracts awarded in Europe increased from USD 14 billion in 1H 2006 to USD 18 billion in 1H 2007. In terms of sectors, financial services sector accounted for 47 of the total number of contracts having a worth of USD 11.5 billion in 1H 2007. Though the overall outsourcing industry did not perform well in 1H 2007, yet TPI expects a growth of 5 percent in annualized revenue for 2007 as compared to 2006.

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