The global outsourcing industry is constantly evolving through new contracting award characteristics and an expanding universe of successful service providers. ISG's TPI Index helps industry participants, enterprises and organizations keep pace and capitalize from the latest data on outsourcing trends. It is the authoritative source for marketplace intelligence related to outsourcing: transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

1. The Asia Pacific TPI Index
First Half 2012
Hosted by:
Mitali B Ghosh
Bank of America Merrill Lynch
30 July 2012

2. 2
Welcome to the 12th Semi-Annual Asia Pacific TPI Index Call
Covering the state of the outsourcing industry for global and regional commercial
contracts.
Arno Franz
Partner & President,
Asia Pacific
Gerry Clark
Partner,
South & East Asia
Dinesh Goel
Partner,
India
© 2012
Information
Services Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with TCV > $25M

3. 3
“
At A Glance
GLOBAL BROADER MARKET TCV DOWN 8% Y/Y
NUMBER OF CONTRACT AWARDS RETURNS TO HISTORICAL LEVELS
MEGA DEAL TCV ROSE 22%, STRENGTHENING THE GLOBAL MARKET
RESTRUCTURING TCV UP ALMOST 40%
“
ASIA PACIFIC RETURNS AN IMPRESSIVE HALF YEAR PERFORMANCE
YEAR TO DATE, STRONG MEGA DEAL AND ASIA PACIFIC RESULTS WERE NOT
ENOUGH TO OFFSET BROADER MARKET DECLINE
1H12 TCV 1H Y/Y 1H12 1H Y/Y
Score Card ($B)* Change Counts Change
Global Market $ 41.4 -8% 373 -28%
Mega Deals $ 7.8 23% 6 50%
New Scope $ 27.0 -22% 286 -30%
Restructurings $ 14.4 39% 87 -19%
ITO $ 26.8 - 6% 234 -24%
BPO $ 14.6 -13% 139 -33%
© 2012
Asia Pacific $ 6.5 44% 59 -11%
Information
Services Group, Inc. EMEA $ 17.8 -24% 153 -32%
All Rights Reserved
Americas $ 17.1 flat 161 -28%
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*Contracts with TCV > $25M

4. 4
Global Broader Market Contract Award Trends
1H12 TCV was down 8%, contract numbers dropped 28% overall and were a little
short of the five-year averages.
Half-year TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs
$42.9 $52.9 $43.8 $57.2
$45.4 $45.7
$40.7 $49.0 $42.5 $51.1 $45.1 $41.4
2007 2008 2009 2010 2011 2012
Half-year Counts by TCV Bands
$25-99M TCV Band $100M+ TCV Band
1H 2H Avg of 5 Prior 1Hs 1H 2H Avg of 5 Prior 1Hs
366
327 308
250
193 404 282
291 286 277 111 130 99 113
199 231 95 112
© 2012 116 124
93 115 111 96
Information
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All Rights Reserved 07 08 09 10 11 2012 07 08 09 10 11 2012
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*Contracts with TCV > $25M

5. 5
Regional Comparison of First Half Contract Trends
The effect of the continuing economic uncertainty impacting the Americas’ and
EMEA outsourcing markets is less pronounced in Asia Pacific.
Half-year TCV ($B)* Compare Half-year Contract Counts Compare
Americas EMEA Asia Pacific Americas EMEA Asia Pacific
225
224
$26.3
$23.5 161
$15.3 $17.8 153
$18.4 134
$19.6 $15.6 $17.13 123
$17.1
66
59
$5.8 $6.5
$4.5
35
1H07 1H08 1H09 1H10 1H11 1H12 1H07 1H08 1H09 1H10 1H11 1H12
© 2012
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*Contracts with TCV > $25M

6. 6
Asia Pacific Contract Award Trends
Asia-Pacific TCV was up 44% Y/Y leading to the strongest first half performance in
almost a decade. Contract awards counts fell slightly but remained ahead of recent
halves.
Half-year Asia Pacific TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs Includes a
$1.2B Mega
$6.6 Deal in India
$5.8
$8.0 $4.9
$7.1
$4.6
$5.8 $6.4 $6.5
$3.5 $2.8 $4.5
2007 2008 2009 2010 2011 2012
Half-year Asia Pacific Counts by TCV Bands
$25-99M TCV Band $100M+ TCV Band
1H 2H Avg of 5 Prior 1Hs 1H 2H Avg of 5 Prior 1Hs
36
36
42 41
30 53
40 43 33 18
© 2012 28 11 13 9
25 19 11 13
Information 20 15 11 8 13 16
Services Group, Inc.
All Rights Reserved 07 08 09 10 11 2012 07 08 09 10 11 2012
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*Contracts with TCV > $25M

7. 7
Asia Pacific New Scope & Restructuring Trends
With three years of consecutive first-half growth, new scope awards dominate in
the region, accounting for 94% of TCV – the highest percentage ever.
Half-year Asia Pacific New Scope TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs
$2.6 $4.8 $5.6
$7.5
$2.4 $5.1 $5.0 $2.6 $6.1
$4.1 $3.7
$2.3 $6.2
$2.9 $3.0 $4.3 $3.7
$1.7 $1.9 $2.3
2003 04 05 06 07 08 09 10 11 2012
Half-year Asia Pacific Restructuring TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs
$0.55
$0.98
$2.57 $2.24
$2.08 $2.10
$0.81 $1.01
$0.90
© 2012 $0.35 $0.65 $0.56
$0.94 $0.65 $0.50 $0.78
Information
$0.05 $0.24 $0.49 $0.42
Services Group, Inc.
All Rights Reserved
2003 04 05 06 07 08 09 10 11 2012
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*Contracts with TCV > $25M

8. 8
Asia Pacific Country Details in Contract Award Trends
India TCV rebounds in the first half of 2012. Even discounting the mega deal award
signed, India TCV grew significantly.
Like-half Asia Pacific TCV ($B)* by Country
Prior 5 Period Range Average 1H11 1H12
$3.5
$3.23
$3.0
$2.5
$2.0
$1.5 $1.44
$1.0
$0.76 $0.68
$0.5
$0.35
$0.0 $0.03
© 2012 ANZ India Japan Greater China ASEAN South Korea
Information
Services Group, Inc.
All Rights Reserved
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*Contracts with TCV > $25M

9. 9
Asia Pacific Industry Segment Contract Trends
Telecom & Media and Financial Services sectors together accounted for 65% of all
TCV signed in the region.
Like-half Asia Pacific TCV ($B)* by Industry
Prior 5 Period Range Average 1H11 1H12
$4.0
$3.5
$3.0
$2.5
$2.33
$2.0
$1.88
$1.5
$1.0
$0.85
$0.5 $0.49 $0.58
$0.18 $0.12
$0.0 $0.05
Telecom & Financial Travel, Energy Healthcare & Business Retail
© 2012 Media Services Manufacturing Transport, Pharma Services
Information
Services Group, Inc. Leisure
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*Contracts with TCV > $25M

10. 10
Asia Pacific Industry Segment Contract Trends
Despite the drop in number of contracts awards in 1H12 all sectors, except for
Manufacturing, met or exceeded their five year averages.
Like-half Asia Pacific Contract Counts by Industry
Prior 5 Period Range Average 1H11 1H12
20
18 18
16
14
12 12
10
8 8
7
6
5 5
4
3
2
1
0
Telecom & Financial Travel, Energy Healthcare & Business Retail
© 2012 Media Services Manufacturing Transport, Pharma Services
Information
Services Group, Inc. Leisure
All Rights Reserved
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*Contracts with TCV > $25M

11. 11
Asia Pacific ITO Contract Award Trends
ITO TCV rose 10% Y/Y. The number of smaller contracts dropped, while the number
of larger contracts increased slightly.
Half-year Asia Pacific ITO TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs Top Asia Pacific ITO Providers
by 1H12 Contracts
$3.5
TCV Leaders
$4.3 Capgemini
$3.4 $6.4 $3.7 $3.7
$6.0 CSC
$4.9 $3.3
$2.8 $1.8 $3.0 HP
2007 2008 2009 2010 2011 2012 IBM
TCS
Half-year Asia Pacific ITO Counts by TCV Bands
$25-99M TCV Band $100M+ TCV Band Counts Leaders
2H 1H Avg of 5 Prior 1Hs 2H 1H Avg of 5 Prior 1Hs HCL
HP
22
29
31
25
IBM
Infosys
20 33 30 21 10 TCS
20 22 8 11
18 7 8
14 19 8
© 2012 12 9 6 9 10 Note: Service providers in alphabetical order; no
Information rankings implied. Placements based on ISG
Services Group, Inc.
All Rights Reserved 07 08 09 10 11 2012 07 08 09 10 11 2012 contracts database.
isg-one.com
*Contracts with TCV > $25M

12. 12
Asia Pacific BPO Contract Award Trends
BPO accounted for almost half of the regional market in 1H12 as TCV, driven by a
rise in larger contract awards, more than doubled Y/Y
Half-year Asia Pacific BPO TCV ($B)*
1H TCV 2H TCV Avg of 5 Prior 1Hs Top Asia Pacific BPO Providers
by 1H12 Contracts
$4.6
$3.2
$3.0 $1.2 TCV Leaders
$1.5 $0.7
$1.5 $0.9 Genpact
$0.9 $0.7 $1.0
$0.3 IBM
2007 2008 2009 2010 2011 2012 Mahindra^
Sykes
Half-year Asia Pacific BPO Counts by TCV Bands WNS
$100M+ TCV Band
$25-99M TCV Band
2H 1H Avg of 5 Prior 1Hs 2H 1H Avg of 5 Prior 1Hs Counts Leaders
Genpact
14
11
Mahindra^
13 20 ^Includes both Mahindra Satyam and Tech
10 18
10 12 Mahindra
13
6 3 1
© 2012 7 8 3 8 6 3 Note: Service providers in alphabetical order; no
6 3 2 2 4
Information rankings implied. Placements based on ISG
Services Group, Inc. 0
All Rights Reserved 07 08 09 10 11 2012 07 08 09 10 11 2012 contracts database.
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*Contracts with TCV > $25M

13. 13
Asia Pacific Market Share Comparison by Provider Category
India-heritage companies outperformed US-heritage firms in every category.
1H12 Asia Pacific Market Share by Service Provider Category
Contract Numbers and TCV ($B)* of Awards
US-heritage India-heritage Other
ITO TCV 27% 42% 31%
ITO Counts 28% 35% 38%
BPO TCV 14% 77% 8%
BPO Counts 11% 58% 32%
© 2012
Information
Services Group, Inc.
All Rights Reserved
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*Contracts with TCV > $25M

14. 14
Asia Pacific Outsourcing Revenue Trends
With an active contracts CAGR of 12% and annualised revenue CAGR of 6%, Asia
Pacific market shows robust performance.
Annualized Revenue &
Active Contract Trends
Annualized Revenue ($B) *
Active Contracts
551
521
316
$10.5 $10.8
$8.1
2007 2008 2009 2010 2011 2012
© 2012
Information
2007 to 2012 Active Contracts CAGR: ↑ 12%
Services Group, Inc. 2007 to 2012 Annualized Revenue CAGR: ↑ 6%
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*Contracts with TCV > $25M

15. Special Topic for First Half 2012

16. 16
Duration Trend Impact on the Global Market
Declines in duration may appear small, but even a slight decline can have large
impact on TCV levels.
What if all 1H12 contracts* had 1999 average durations of 6.4?
1H12 Actual TCV $41 B 38%
Hypothetical 1H12 TCV with 1999-2000 Durations $57 B
Average Contract Durations Over Time
Avg Duration Duration Plateau
6.4
6.0
5.5
6.48
5.1
6.35 6.14 6.10 6.07 5.95 5.88 5.72 5.48 5.31 5.10 4.98 5.05 4.85
© 2012
Information
Services Group, Inc. 1999 00 01 02 03 04 05 06 07 08 09 10 2011 1H12
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*Contracts with TCV > $25M

17. 17
Does the 1H12 duration-dip signal the start of a step down?
Durations decreased across a range of contract types.
Distribution of Contracts* Average Durations Fall
Moves Towards Lower Durations for All Contract Sizes*
TCV < $200M TCV > $200M
Durations Durations Durations
< 5 Years 5 - 6.9 Years 7+ Years
6.6
6.1 6.2 6.0
51%
46%
4.9 4.8 4.9
4.6
34%
32% 22%
15%
2009 1H12 2009 1H12 2009 1H12 2009 2010 2011 1H12 2009 2010 2011 1H12
© 2012
Information
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*Contracts with TCV > $25M

18. 18
Factors Influencing Downward Trend in Contract Durations
Average Duration for
Stepped Up Market Competition New Adopters
Amidst increased provider competition, companies ↓14%
– particularly New Sourcing Adopters – push for 5.1
4.4
shorter contract commitments, leveraging the
2009 1H12
providers’ desire to seal the deal.
Outsourcing Savvy Clients and Providers
Solution improvements enable more efficient and effective
delivery of innovations, making the best solutions at the best
prices available via more frequent contract negotiations.
Disposability of Cloud Solutions
© 2012
Service Providers note that contracts with Cloud in scope are shorter
Information
Services Group, Inc.
in duration than Managed Services deals.
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*Contracts with TCV > $25M

19. 19
Asia Pacific 1H12 TPI Index Summary and Outlook
 Global Broader Market TCV down 8% Y/Y
 Asia Pacific growth of 44% propped up the global broader
market, Americas remained flat and EMEA struggled
 New scope awards in Asia Pacific accounted for 94% of TCV
market
summary  BPO accounted for almost half of Asia Pacific TCV
 India TCV rebounded strongly
 India-heritage service providers outperformed their US-
heritage counterparts across all categories
 Anticipate a soft 3Q globally though 4Q TCV may pick up
because of larger deals in the pipeline
 Unprecedented levels of TCV in 2H12 are required for the
market global market to meet the record-high 2011 TCV result
outlook  Asia Pacific on track to have it’s best year yet for BPO awards
 Asia Pacific need only deliver its five year average
© 2012 performance to result in a banner year for outsourcing
Information
Services Group, Inc.
All Rights Reserved
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*Contracts with TCV > $25M

20. 20
Learn More
Please contact us with your questions and comments.
► Arno Franz
Partner & President, Asia Pacific
+61 (0) 2 9006 1610
arno.franz@isg-one.com
► Gerry Clark ► Dinesh Goel
Partner, South & East Asia Partner, India
+65 (0) 9634 5927 +91 98458 93787
gerry.clark@isg-one.com dinesh.goel@isg-one.com
© 2012
Information
Services Group, Inc.
All Rights Reserved
isg-one.com www.considerthesourceblog.com
*Contracts with TCV > $25M

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