January to March 2016
It gives me great pleasure to bring to you the first quarter 2016 edition of the KPMG Global IT-BPO Outsourcing Deals Analysis.
- 2016 begins with a positive outlook with 1Q16 showing one of the highest deal activity for a first quarter since 2013. Past trends indicate that there is a slump in deal activity post the fourth quarter, but 1Q16 stands out in this regard. Whether this remains portent for the next of the year is yet to be seen
- Worldwide in 1Q16, 195 ITO contracts worth USD36.1 billion and 22 BPO contracts worth USD3.1 billion were signed
- Globally, 11 IT-BPO Bundled deals were signed in 1Q16 with aggregate contract value of USD614 million
- Average deal tenure for contracts in 1Q16 was 4 years 11 months in 1Q16 from 3 years 7 months in 4Q15
- Government and Defense sectors were the top consumers of IT-BPO services contributing to 65 per cent and 17 per cent in terms of value of outsourcing deals signed in 1Q16. Banking and Financial Services sector was the next big contributor in terms of deal value
- IT Bundled Services and F&A contributed approximately USD25.4 billion and USD797.6 million respectively and were the largest procured services globally within ITO and BPO outsourced services, respectively.
- Average annualized contract value in 1Q16 was USD27.3 million as compared to USD50.4 million in 4Q15 showing a decrease of 46 per cent between the two quarters.