The ISG Outsourcing Index (formerly the TPI Index) provides a quarterly review of the latest sourcing industry data and trends for clients, service providers, analysts and the media. For more than a decade, it has been the authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider performance.

1. The Asia Pacific ISG Outsourcing Index
Market Data and Insights
Second Half and Full Year 2013
Hosted by:
Mitali Ghosh,
Bank of America Merrill Lynch
10 February 2014

2. 2
Welcome to the 15th Semi-Annual Asia Pacific Outsourcing Index Review
Covering the state of the outsourcing industry for global, commercial contracts.*
Sid Pai
Partner and President,
Asia Pacific
Gerry Clark
Partner,
Asia
Catherine Jaktman
Dinesh Goel
Partner,
Australia and New
Zealand
Partner,
India
© 2014
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Group, Inc.
All Rights Reserved
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®

3. 3
At a Glance
STRONGER SECOND HALF VALUES NOT ENOUGH TO LIFT ANNUAL VALUES
2013 GLOBAL DEAL ACTIVITY SLIGHTLY HIGHER, BUT VALUES FALL
AFTER SEVERAL YEARS OF GROWTH, FINANCIAL SERVICES ACTIVITY SLOWS AND
MANUFACTURING DECLINES SHARPLY
ITO ACTIVITY UP, ESPECIALLY IN ADM, BUT BPO ACTIVITY RECEDES DUE TO LACK OF LARGE DEALS
ASIA PACIFIC ACV FALLS COMPARED TO STAND-OUT 2012
EMEA SEES RISE IN ACTIVITY WITH SMALLER DEAL SIZES,
BUT LACK OF LARGE DEALS IN AMERICAS LEADS TO DROP IN VALUE
Scorecard
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Global Market
New Scope
Restructurings
Mega-relationships
ITO
BPO
Americas
EMEA
Asia Pacific
2H13
ACV (B)*
$
$
$
$
$
$
$
$
$
10.2
6.1
4.1
1.7
7.9
2.3
3.2
6.0
1.0
H/H
Change
20%
27%
51%
-18%
41%
-21%
-3%
44%
-1%
2013
ACV ($B)*
$
$
$
$
$
$
$
$
$
18.7
11.2
7.5
3.7
13.5
5.2
6.5
10.2
1.9
isg-one.com
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
Y/Y
Change
-18%
-27%
-2%
-38%
-8%
-37%
-26%
-6%
-40%
2013
Counts
1,155
798
357
24
790
365
442
587
126
Y/Y
Change
2%
-5%
22%
-31%
8%
-9%
-10%
18%
-11%

4. 4
Global Market Contract Award Trends
For the full year, ACV was down 18% from 2012; however, second half contract
counts reached their highest level ever to lift the full year ahead of 2012 by 2%.
Broader Market Full-Year ACV ($B)*
1H ACV
2H ACV
$20.6
$22.0
$22.0
$22.9
$9.9
$12.1
$10.9
$18.7
$15.2
$16.6
$18.2
$8.7
$6.7
$8.8
$8.5
$11.0
$8.7
$8.3
$8.5
$7.8
$9.7
$9.6
$12.1
$9.9
$12.0
$8.5
2004
05
06
07
08
09
10
11
12
2013
$16.2
$17.1
$7.4
$10.2
Broader Market Full-Year Contracting Counts
1H Counts
2H Counts
1,182
972
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774
562
611
617
259
277
306
304
316
285
305
313
379
05
06
07
08
575
2004
988
395
496
476
476
512
09
10
isg-one.com
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
1,132
1,155
577
526
661
605
606
494
11
12
2013

5. 5
Global Market Contract Trends by Deal Size
2013 saw the continued dominance of contracting in the smallest ACV bands, and
average deal size trended down across all bands.
Comparing Broader Market Contracting Awards ($B)*
Grouping in ACV Contract Size Bands
$5-39M
ACV($B)*
$40-99M
$100M +
Contract Counts
Average Contract Size
1,063
$14
$13
$11
$55
$57
$55
$179
$185
$11.3 60%
$8.5
673
$6.6
482
$4.0
$3.1
$3.8 20%
$153
70
$6.5
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$5.7
$3.7 20%
2004
2008
2013
57
36
2004
68
31
24
2008
2013
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
2004
2008
2013

6. 6
Global Market New Scope & Restructuring Trends
New Scope ACV dipped 27% from 2012, while Restructuring ACV held steady.
Restructuring counts rose 22% from 2012, but New Scope awards continued down.
New Scope Half and Full-Year ACV ($B)*
1H ACV
$13.5 $13.6
$12.8 $12.6
$10.1
$5.6
$7.2
2004
$6.3
$7.2
$6.1
2H ACV
1H ACV
$8.6
$6.4
$6.9
$11.2
$7.1
$4.5
$7.3
$5.1
$5.0
$6.3
$7.5
05
06
07
08
$7.4
09
$8.7
10
$7.2
11
12
$5.1
2013
895
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491
516
206 220
252
259
303
isg-one.com
08
266
226
239
257
2004
05
06
07
753
623
446
$5.1
$2.5
$1.4
$2.0
2004
05
$3.5
06
405
356
441
09
397
10
11
$2.4
$2.2
$2.2
07
08
09
839
$1.6
$3.6
$5.0
$3.3
$2.7
10
11
$7.5
$3.6
$4.1
$4.0
$3.4
12
2013
2H Counts
357
798
287
384
198
455 352
12
$7.6
$2.4
$3.1
1H Counts
320
369
$4.6
$7.7
Restructuring Half and Full-Year Counts
446
454
$4.6
$1.5
$1.6
2H Counts
774
472
$3.3
$2.0
$8.0
New Scope Half and Full-Year Counts
1H Counts
2H ACV
$16.0 $15.1
$14.3 $15.3
$6.1
$6.3
Restructuring Half and Full-Year ACV ($B)*
2013
151
103
116
120
101
53
50
57
59
54
66
45
56
2004
05
06
07
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
91
75
293
136
142 215
151
151 142
11
12
235
120
107
115
09
10
76
08
2013

7. 7
Global Market Industry Trends
Manufacturing stood out, with ACV off $2B+ from its prior 5-year average. Yet Energy
and Travel, Transport & Leisure performed close to their prior 5-year highs.
Broader Market 5 Prior Year ACV ($B)* by Industry
Range of Prior 5 Years
Avg of 5 Prior Years
2012
2013
$7
$6
$5.33
$5
$4
$3.48
$3
$2.59
$2.23
$2
$2.03
$1.41
$1
$1.01
$0.64
© 2014
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$Manufacturing
Financial
Services
Telecom &
Media
Energy
Travel,
Transport,
Leisure
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
Healthcare &
Pharma
Business
Services
Retail

8. 8
Regional Comparison of Contract Trends
As contract counts increase over the decade, average contract size shrinks. EMEA
ACV grows compared to 2004, Asia Pacific holds steady while Americas shrinks.
Full-Year ACV ($B)* Compare
Americas ACV
EMEA ACV
Asia Pacific ACV
$11.0
$9.9
$8.1
$7.2
$7.1
$7.6
$7.3
$7.5
$11.9
$10.9
$9.7
$8.3
Full-Year Contract Counts Compare
$8.8
$8.1
Americas Counts
$10.2
431
348
$6.5
251
$6.8
$1.9
2004
$1.5
$1.5
05
06
07
$2.1
08
$2.6
09
$3.2
$2.2
10
$2.1
11
241
$1.9
12
587
498
$8.8
$6.2
Asia Pacific Counts
535
$6.1
$2.5
EMEA Counts
2013
253
252
265
263
273
94
07
08
83
57
73
2004
05
06
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
517
493
442
414
431
127
115
130
141
126
09
10
11
12
2013
273
81
442
332

9. 9
Asia Pacific Contract Award Trends
Although 2H held steady, full year ACV dropped substantially from 2012 and
contract counts dipped 11%.
Asia Pacific Full-Year ACV ($B)*
1H ACV
2H ACV
127
83
57
$1.9
$0.7
94
81
73
$2.1
$1.3
$1.2
$1.0
$0.4
$1.5
$0.5
$1.0
$1.2
$0.7
2004
05
06
07
08
$1.4
Asia Pacific Full-Year Counts in Bands
Range of Prior 5 Years
Avg of 5 Prior Years
2012
2013
126
$2.6
$1.3
$1.3
09
$2.2
$2.0
$1.5
$1.0
$0.7
$1.0
10
11
$1.3
$1.9
12
$2.0
$1.0
$1.0
2013
Asia Pacific New vs. Restructuring ACV ($B)*
Range of Prior 5 Years
Avg of 5 Prior Years
2012
$2.5
$1.5
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141
$3.0
$2.0
$1.0
130
115
$3.2
$2.5
$1.5
Full-Year Counts
$2.0
$1.18
$1.5
$0.61
$0.5
$1.59
$1.0
$0.5
$0.15
$0.0
$5 - 39M
$40-99M
$0.36
$0.0
$100M +
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
New Scope
Restructuring
2013

10. 10
Asia Pacific Industry Contract Award Trends
Several of the largest industries in Asia Pacific suffered declines in 2013, notably the
Telecom & Media and Manufacturing sectors.
Asia Pacific Industries Prior 5 Years ACV ($B)*
Range of Prior 5 Years
Avg of 5 Prior Years
2012
2013
$1.2
$1.0
$0.8
$0.65
$0.6
$0.4
$0.32
$0.28
$0.2
$0.22
$0.22
$0.16
$0.07
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$0.03
$-
Telecom &
Media
Financial
Services
Manufacturing
Business
Services
Travel,
Transport,
Leisure
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
Energy
Retail
Healthcare &
Pharma

11. 11
Asia Pacific Sub-region Award Trends
Japan was the only bright spot as all other markets in Asia Pacific suffered declines
in 2013, most notably India and Australia-New Zealand.
Asia Pacific Sub-regions Prior 5 Years ACV ($B)*
Range of Prior 5 Years
Avg of 5 Prior Years
2012
2013
$1.6
$1.4
$1.2
$1.0
$0.8
$0.62
$0.6
$0.4
$0.40
$0.38
$0.33
$0.2
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$0.19
$0.03
$India and South Asia
ANZ
Greater China
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
ASEAN
Japan
South Korea

12. 12
Asia Pacific ITO Contract Award Trends
Full year ITO ACV finished around 5% down on 2012, but within its historical range,
supported by Infrastructure and Network Services contract awards.
Asia Pacific Full-Year ITO ACV ($B)*
1H ACV
2H ACV
ITO Full-Year Counts
98
61
39
54
60
64
$2.04
$1.90
$1.47
$0.5
$0.95
$1.0
$0.6
$0.4
2004
05
$1.26
$0.4
$0.9
$0.9
06
07
$1.0
87
74
$1.74
$1.35 $0.8
$0.8
$0.5
08
2013 Top AP ITO Providers1
94
86
Top ITO ACV Leaders
$1.46
$1.69
$1.3
$0.8
$0.9
$0.7
$0.9
$0.7
10
09
$0.7
$0.5
$1.2
CSC
IBM
Infosys
Nihon Unisys
Singapore Telecom
Wipro
$1.61
11
12
2013
Asia Pacific Full-Year ITO ACV ($B)* by Function
2012
Top ITO Counts Leaders
2013
ADM
ADM + Infrastructure
$0.307
Infrastructure
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Accenture
CSC
IBM
Infosys
TCS
$0.411
$0.689
Network Services
1Service
$0.201
$-
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
$0.7
isg-one.com
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
$0.8
providers in alphabetical order; no
rankings implied. Placements sourced from
ISG Contracts Knowledgebase®.

13. 13
Asia Pacific BPO Contract Award Trends
BPO ACV dropped to its lowest level since 2006 as large deals disappeared from the
market in 2013.
Full-Year Asia Pacific BPO ACV ($B)*
1H ACV
22
$0.42
$0.5
$1.0
41
29
43
$0.77
05
06
$0.56
$0.4
$0.2
$0.6
$0.2
$0.5
$0.41
$0.2
$0.2
07
$0.24
55
32
08
09
10
$0.60
$1.1
$0.3
$0.3
2012
11
12
2013
Accenture
FIS
IBM
Infosys
TCS
// $.72
$0.079
Industry-Specific
$0.124
F&A
$0.034
Facilities Mgmt
$0.030
Multi-Process
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Top BPO Counts Leaders
2013
$0.013
Contact Centers
Fujitsu
IBM
Infosys
Jones Lang LaSalle
Sutherland Global
TCS
$0.34
$0.1
$0.3
Full-Year BPO ACV ($B)* by Function
R&D/KPO
Top BPO ACV Leaders
$0.5
$0.57
$0.6
2013 Top AP BPO Providers1
BPO Full-Year Counts
$1.55
$0.53
$0.4
2004
30
21
19
18
2H ACV
$0.023
HRO
$0.018
Document Mgmt
$0.020
$-
1Service
$0.1
$0.2
$0.3
isg-one.com
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
$0.4
providers in alphabetical order; no
rankings implied. Placements sourced from
ISG Contracts Knowledgebase®.

14. 14
Asia Pacific Outsourcing Revenue Trends
With an active contracts CAGR of 10% and annualized revenue CAGR of 4%, the
Asia Pacific outsourcing market shows steady growth.
Asia Pacific Annualized Revenue & Active Contract Trends
Annualized Revenues ($B)*
Active Contracts
647
421
683
$11.3
$11.7
2012
2013
$9.7
2008
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2009
2010
2011
2008 to 2013 Active Contracts CAGR:
2008 to 2013 Annualized Revenue CAGR:
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
↑ 10%
↑ 4%

15. 15
Asia Pacific Market Share Comparison by Provider Category
Although India-heritage companies led BPO values in 2013, they lost market share
to the US-heritage and Other categories.
Percentage of All Asia Pacific Annual Awards
by Service Provider Category
Other
India-heritage
US-heritage
BPO Awards
BPO ACV
19%
ITO Awards
BPO Counts
25%
ITO ACV
51%
36%
ITO Counts
35%
43%
27%
30%
38%
31%
73%
46%
40%
32%
34%
32%
8%
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2012
29%
2013
9%
2012
38%
27%
34%
2013
2012
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*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
2013
2012
31%
31%
2013

16. OVERVIEW OF ASIA PACIFIC PUBLIC SECTOR
RECOGNIZING AND REACTING TO KEY SOURCING MARKET TRENDS
Special Topic for Full Year 2013
Catherine Jaktman
Partner,
Australia and New Zealand

17. 17
Asia Pacific Public Sector Trends
Australia-New Zealand continues to dominate public sector spend in the region.
AP Public Sector vs. Commercial ACV ($B)*
Public Sector ACV
$3.08
Commercial Sector ACV
$2.06
$2.15
2009
ACV Leaders
$3.24
$2.73
$2.60
AP Top Public Sector Providers1
2011
$1.95
$1.88
2010
$2.86
$1.84
2012
2013
Counts Leaders
AP Public Sector ACV % of All AP Contracts
54%
56%
48%
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2009
1Service
2010
Accenture
Fujitsu
IBM
Serco
Telstra
Transfield Services
Unisys
47%
49%
2011
2012
Accenture
Data 3 Group
Fujitsu
Harris Corp.
IBM
NEC
Serco
TCS
Telstra
Thales
Unisys
2013
providers in alphabetical order; no rankings implied. Placements sourced from ISG Contracts Knowledgebase®.
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®

18. 18
Recognizing the Key Forces for Change
in Outsourcing Market Dynamics
Market Saturation in Traditionally
Strong Segments
Sustained Period of Economic
Pressure in the West
Growth in G-2000 Sourcing
from 5 Years Ago
Northern Europe
and U.S. Regions
30%
Financial Services
and Manufacturing
15%
1%
Largest Western
G-2000 Companies
Americas
Unit Cost
Drops
Client
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Provider
Competition Up
Asia Pacific
Sourcing Model Matures
in Major Territories and Industries
Stepped-up Pressure on
Contract Pricing
Deal Term
Down
EMEA
Rise of the
Small Deal
SIAM*
*Service Integration and Management
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®
Multiple
ITO and
BPO
Providers

19. 19
Taking Advantage of
the New Market Forces
Force 1 Market Saturation in Traditionally Strong Segments
Get smarter with targeting strategies for
underpenetrated markets and industries.
Providers should
Seek out underpenetrated industries like Energy, Pharma and Transportation.
Cultivate new clients in bottom quartile of the G-2000 by offering new solutions.
Force 2 Sustained Period of Economic Pressure in the West
Solve the challenge of expanding into the
more rapidly growing Eastern economies.
Providers should
Note Eastern Service Providers are maturing rapidly, are better positioned and
are starting to win business from new G-2000 companies in the East.
Force 3 Stepped-up Pressure on Contract Pricing
Focus on delivering good returns,
even on reducing revenues.
Providers should
Improve margins by optimizing the efficiency of delivered service.
Drive down costs via technology innovations, process enhancements and automation.
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Force 4 Sourcing Model Matures in Western Markets
Providers should Leverage experience in
*
mature markets
to make sourcing relevant to new buyers.
Take the opportunity to move directly to current sourcing practices in new industries
and with new buyers, avoiding the growing pains the early adopters experienced.
*Service Integration and Management
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®

20. 20
Full-Year ISG Outsourcing Index Summary and Outlook
 2013 had increased deal activity but at a smaller average deal size, the new
market
summary





normal. Services cost less, holding down overall ACV.
ITO activity is up while BPO activity recedes due to lack of large deals.
Manufacturing fell back globally , as did Telecom & Media in Asia Pacific
Conversely, Energy and Travel, Transport & Leisure performed close to their
prior 5-year highs.
Asia Pacific results suffered from a lack of large deals that
drive their market, especially in Australia/New Zealand and India.
Americas results were down largely on a decline in U.S. ACV.
EMEA had a sizable increase in the number of contracts and saw its fourth
straight year of ACV over $10B.
 In 1H14, look for positive Global Market results, based on a stronger
market
outlook
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industry pipeline, and expect a Global Market increase of 3 - 5 percent.
 The Asia Pacific market , however, is likely to remain soft through 1H14.
 In 2014, expect service providers to continue to offer more varied
solutions, such as systems integration work, transformation work, project
services and, increasingly, automation.
 ACV declined, but the effect on the market from recovering economies
tempers that. Service providers’ responses to changing sourcing market
dynamics will be key to their success.
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®

21. 21
Learn More
Please contact us with your questions and comments.
► Gerry Clark
► Sid Pai
Partner, Asia
+65 9634 5927
gerry.clark@isg-one.com
Partner & President, Asia Pacific
+91 98800 33779
sid.pai@isg-one.com
► Dinesh Goel
► Catherine Jaktman
Partner, India
+91 98458 93787
dinesh.goel@isg-one.com
Partner, Australia & New Zealand
+61 2 6198 3283
catherine.jaktman@isg-one.com
© 2014
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Group, Inc.
All Rights Reserved
isg-one.com
blog.isg-one.com
*Contracts with ACV ≥ $5M from the ISG Contracts Knowledgebase®

22. Full Year 2013

23. 23
Full Year TCV Scorecard
The ISG Outsourcing Index has moved to ACV as the primary measure of the
Broader Market. In transition, we will continue to provide a high-level TCV view of
the market via a Scorecard analysis.
Scorecard
2013
TCV ($B)*
Y/Y
Change
Global Market
New Scope
Restructurings
Mega-deals
ITO
BPO
Americas
EMEA
Asia Pacific
$
$
$
$
$
$
$
$
$
82.9
-20%
53.5
29.4
14.7
55.2
27.7
26.3
47.8
-24%
-10%
-8%
-16%
-26%
-34%
-5%
8.8
-35%
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*Contracts with TCV ≥ from from Contracts Knowledgebase®
*Contracts with ACV ≥ $5M$25Mthe ISG the ISG Contracts Knowledgebase®

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managed services, with a focus on information technology, business process transformation, program management services and
enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the
deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory
services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.