Professional Documents
Culture Documents
Hosted by:
Louis Miscioscia and Ankur Rudra, CLSA
2016
Information Services
Group, Inc.
All Rights Reserved
14 January 2016
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
John Keppel
Partner & President
Esteban Herrera
Partner
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
At a Glance
BEST QUARTERLY BROADER MARKET ACV RESULT IN THE LAST FOUR YEARS.
AMERICAS 4Q ACV ABOVE $2B FOR EIGHT CONSECUTIVE QUARTERS.
EMEA QUARTERLY ACV UP ON FIVE MEGA-RELATIONSHIP AWARDS.
4Q AND FULL-YEAR ASIA PACIFIC ACV DOWN SHARPLY ACROSS MOST MAJOR INDUSTRIES.
2015 NUMBER OF AWARDS AT AN ALL-TIME HIGH.
CLOUD, DIGITAL AND AUTOMATION CONTINUE TO DRIVE DOWN AVERAGE ACV AND DURATIONS.
AMERICAS FULL-YEAR ACV TIED 2014 FOR THE BEST YEAR EVER, DRIVEN BY RESTRUCTURINGS.
EMEA ANNUAL ACV DOWN SLIGHTLY AS ACTIVITY SLOWS ACROSS MOST MAJOR GEOGRAPHIES.
2015 SAW A LACK OF LARGE DEALS IN ASIA PACIFIC.
Scorecard
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
Global Market
New Scope
Restructurings
Mega-relationships
ITO
BPO
Americas
EMEA
Asia Pacific
4Q15
ACV ($B)*
$
$
$
$
$
$
$
$
$
7.0
3.4
3.6
2.4
5.5
1.5
2.6
3.9
0.5
4Q Y/Y
Change
4Q Q/Q
Change
5%
-1%
10%
43%
15%
-20%
0%
17%
-34%
27%
-10%
110%
162%
55%
-23%
15%
44%
-10%
2015
ACV ($B)*
$
$
$
$
$
$
$
$
$
23.7
14.1
9.6
4.8
17.2
6.6
9.8
11.7
2.2
Y/Y
Change
-8%
-9%
-6%
-23%
-12%
4%
0%
-8%
-33%
4Q15 Broader Market ACV up 5% Y/Y, helped by larger awards. Cloud, digital and
automation drive the average contract values and durations to all-time lows.
4Q/Full-Year Broader Market ACV ($B)*
1Q to 3Q ACV
$17.6
$18.8
$4.7
$6.4
$12.9
2006
$23.2
$20.8
4Q ACV
$24.0
$24.9
$5.8
$7.5
$5.7
$5.4
$7.5
$12.4
$15.5
$15.8
$18.1
$17.4
$19.9
07
08
09
10
11
12
2016
Information Services
Group, Inc.
All Rights Reserved
741
745
212
190
529
555
2006
07
1,098 1,119
334
312
324
847
975
953
926
10
11
12
13
312
272
694
786
08
09
233
$4.9
1,411 1,445
388
355
$6.7
$19.1
$16.7
13
14
2015
4.5
$23.8
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
3.5
$20.2
1,023 1,090
2015
$7.0
$16.4
$21.1
14
$23.7
927
$21.3
4Q Counts
$25.8
$25.6
$16.4
2006
2009
2012
2015
4Q15 ACV is flat Y/Y. 2015 ACV tied 2014 for the best year, driven by the stepped-up
pace of restructurings.
Americas 4Q/Full-Year ACV ($B)*
1Q to 3Q ACV
$8.6
$2.0
$6.6
2006
$9.1
$7.5
$6.9
$2.9
$2.0
$4.7
$4.9
07
08
$2.4
$9.3
$1.2
$6.7
$8.2
09
10
$8.6
$2.5
4Q ACV
$9.5
$2.1
$6.1
$7.4
11
12
$7.4
$9.8
$9.8
$2.6
$2.6
$1.7
$5.7
$7.2
$7.2
13
14
2015
328
316
85
83
$8
243
233
2006
07
08
$6
$5
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
530
522
486
598
450
471
120
88
141
123
126
330
383
389
399
360
438
09
10
11
12
13
14
160
149
538
2015
$6.72
$5.33
1,587
$4.51
$4
687
$7
95
291
386
4Q Counts
$3.12
$3
$42.4
$40.9
$2
$1
New Scope
Restructuring
ITO
BPO
2006
07
08
09
10
11
12
13
14
2015
For the second straight year the U.S. value and number of contract awards set alltime highs. Smaller industries, like Transportation and Retail, are standouts.
Americas Sub-Regions Full-Year ACV ($B)*
Range of Prior 4 Years
$1.0
$0.8
$0.6
$0.4
$0.2
$0.0
2014
2015
$0.73
$0.24
Canada
$0.16
$0.08
Brazil
Mexico
Other LatAm
2014
2015
$3.0
$2.5
$2.0
$2.02
$1.5
$1.67
$1.0
2016
Information Services
Group, Inc.
All Rights Reserved
$0.97
$1.13
$1.03
$0.5
$0.0
Financial
Services
Manufacturing
Telecom &
Media
Healthcare &
Pharma
Business
Services
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
$0.80
Energy
$0.74
$0.55
Consumer
Packaged
Goods
Retail
$0.93
Travel,
Transport &
Leisure
The Building 10 Sourcing Standouts have no turnover for the second straight quarter.
Sitel and Hinduja Global Solutions achieve Top 10 status in the Breakthrough group.
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
The Big 10
Sourcing Standouts
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
Accenture
AT&T*
BT
Capgemini
Cognizant
Dell
HPE
IBM
TCS
Xerox*
Aon Hewitt
CGI
CompuCom
Convergys
Genpact
HCL
Infosys
Tech Mahindra
Teleperformance
Wipro
EXL
Hinduja Global Solutions*
Luxoft
Minacs
Mindtree
SITEL*
Sutherland Global
Syntel
UST Global
Virtusa
4Q15 ACV down 34% Y/Y with the continued absence of large awards. Annual results
remain uneven Y/Y as ACV declines 33%, the lowest performance since 2006.
Asia Pacific 4Q/Full-Year ACV ($B)*
1Q to 3Q ACV
$2.6
$1.7
$2.6
$0.9
$1.0
$1.7
$1.6
07
08
$0.4
$1.3
2006
4Q ACV
$2.3
09
1Q to 3Q Countd
$3.5
$3.1
$0.8
$2.5
$2.3
$1.1
$0.6
$1.4
$1.7
10
11
$0.7
$2.8
$3.2
$2.2
13
$2.2
$0.5
$0.6
$1.6
12
$0.7
$2.5
14
122
95
95
28
22
$1.7
67
73
82
2015
2006
07
08
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
40
149
151
46
44
103
09
4Q Counts
153
168
27
40
107
126
128
10
11
12
170
143
157
48
38
112
122
119
13
14
2015
31
868
$14.4
$1.68
384
$1.61
$8.4
$0.56
$0.49
New Scope
Restructuring
ITO
BPO
2006
07
08
09
10
11
12
13
14
2015
The majority of geographies fell since 2014, with notable weakness in ANZ and
India. Energy vertical activity is increasing, where as most industries fell short.
Asia Pacific Sub-Regions Full-Year ACV ($B)*
Range of Prior 4 Years
2014
2015
$1.5
$1.3
$1.0
$0.8
$0.70
$0.5
$0.61
$0.33
$0.3
$0.29
$0.21
$0.05
$0.0
ANZ
Japan
Greater China
Southeast Asia
South Korea
2014
2015
$1.2
$1.0
$0.8
$0.6
$0.4
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
$0.46
$0.51
$0.32
$0.2
$0.0
Financial
Services
Telecom &
Media
Manufacturing
$0.35
Travel,
Transport &
Leisure
$0.25
Energy
$0.12
Business
Services
$0.07
Consumer
Packaged
Goods
$0.08
$0.02
Healthcare &
Pharma
Retail
10
All Asia Pacific Top 10 segments experience turnover. For the second straight
quarter, CSC plans to acquire a service provider from the Breakthrough 10 segment.
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
The Big 10
Sourcing Standouts
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
Accenture
Canon*
Capgemini*
Cognizant
Fujitsu
HPE
Hitachi
IBM
TCS
Telstra*
CGI*
Genpact
HCL
Indra Sistemas*
Infosys
NEC
Optus
Orange Business Services*
Tech Mahindra
Wipro
Aegis
ChinaSoft
Hollysys Automation
Minacs
Neusoft*
Sutherland Global
TeleTech
UXC
Vertex
Xchanging*
11
4Q15 ACV is up 44% Y/Y driven by mega-relationship awards. Annual ACV down 8%
due to weaker the ITO market. Full-year results are down due to a slow first half.
EMEA 4Q/Full-Year ACV ($B)*
1Q to 3Q ACV
$11.3 $11.0
$7.3
$2.3
$8.7
$2.4
$2.7
$5.0
$6.0
2006
07
$8.9
08
$4.2
$6.8
09
$12.2
$3.6
$8.6
$9.6
10
11
1Q to 3Q Countd
4Q ACV
$14.0
$4.4
$12.6
$2.9
$9.7
12
$11.7
$2.7
$9.0
13
$12.7
$3.3
$9.4
$7.8
14
626
$11.7
$3.9
2015
318
334
99
85
219
249
2006
07
419
$11
$7
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
497
140
321
353
357
08
09
10
98
575
621
643
601
166
149
167
180
168
460
426
454
463
433
11
12
13
14
2015
$9
499
146
4Q Counts
3,114
$8.83
$7.08
$5
$4.62
$3
$2.87
$1
New Scope
$57.9
1,442
Restructuring
ITO
BPO
$35.8
2006
07
08
09
10
11
12
13
14
2015
12
Most geographic markets decline from 2014 with the exception of DACH, which
benefits from a few large awards. Financial Services declines relative to recent years.
EMEA Sub-Regions Full-Year ACV ($B)*
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0
$3.57
2015
$3.53
$1.31
2014
DACH
Nordics
$0.70
Benelux
$1.01
$0.79
$0.49
France
Southern
Europe
Africa &
Middle East
$0.32
E. Europe &
Russia
2014
2015
$5.0
$4.0
$3.0
$2.93
$2.0
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
$2.58
$1.65
$1.0
$0.0
Financial
Services
Manufacturing
Energy
$1.63
Travel,
Transport &
Leisure
$1.11
Telecom &
Media
$0.48
Business
Services
$0.39
$0.27
Consumer
Packaged
Goods
Retail
$0.68
Healthcare &
Pharma
13
All segment experience some turnover. Indra Sistemas joins the Building 10 group in
both EMEA and Asia Pacific.
SOURCING
STANDOUTS GROUPED BY COMPANY SIZE
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
The Big 10
Sourcing Standouts
The Building 10
Sourcing Standouts
The Breakthrough 10
Sourcing Standouts
Accenture
Atos
BT
Capgemini
Cognizant
HPE
IBM
TCS
Ericsson*
T-Systems
Capita
Ceva Logistics*
CGI
Computacenter
HCL
Indra Sistemas*
Infosys
MITIE
Serco
Wipro
Firstsource Solutions*
FleetCor*
InnerWorkings
ISON Group
Luxoft
MAYKOR
Mindtree
Transcom
Virtusa
WNS
14
Esteban Herrera
Partner
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
15
2016
Information Services
Group, Inc.
All Rights Reserved
Multi-tenancy
Delivers
Software Replaces
Labor
Embrace a cannibalistic
Embedded Tech
is the Goal
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
repackage existing
shared assets.
Invest in shared specialist
resources across clients.
16
Service Integration
is Key
CM
TBM
Be an outstanding
SIAM
Shadow IT
Returns
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
17
market
summary
awards. Americas has a flat 4Q, and Asia Pacific was down markedly.
For the year, the number of Broader Market awards sets an all-time
record, while Broader Market ACV finishes down slightly from 2014.
Cloud, digital and automation drive down average award values and
contract durations, resulting in the lowest annual mega-relationship
activity in 10 years.
Americas annual awards tied 2014 values for an all-time high, but EMEA
and Asia Pacific suffer a weak start and never recovered.
Expect positive but modest 1H 2016 ACV growth on an easier 1H15 compare.
market
outlook
2016
Information Services
Group, Inc.
All Rights Reserved
Longer term, expect increased activity in the second half of 2016 across all
three regions.
Award values will continue to trend down as companies demand more
technology at lower price points with shorter-term commitments.
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
18
&
I want to ask
a question live
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
19
Learn More
www.isg-one.com
Will Thoretz
Americas Media Contact
+1 203 517 3119
will.thoretz@isg-one.com
Denise Colgan
EMEA and AP Media Contact
+44 1737 371523
denise.colgan@isg-one.com
Paul Reynolds
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
20
2016
Information Services
Group, Inc.
All Rights Reserved
isg-one.com
*Contracts with ACV $5M from the ISG Contracts Knowledgebase
21
The ISG Outsourcing Index has moved to ACV as the primary measure of the
Broader Market. We will continue to provide a high-level TCV view of the market via
a Scorecard analysis.
Scorecard
2016
Information Services
Group, Inc.
All Rights Reserved
4Q15
TCV ($B)*
4Q Y/Y
Change
4Q
Q/Q
Change
2015
TCV ($B)*
Y/Y
Change
Global Market
$ 25.9
-14%
24%
$ 88.9
-21%
New Scope
$ 14.9
9%
-3%
$ 60.4
-11%
Restructurings
$ 11.0
-34%
102%
$ 28.5
-36%
Mega-deals
5.7
-49%
0%
$ 10.5
-60%
ITO
$ 19.9
-9%
56%
$ 63.5
-23%
BPO
6.0
-28%
-26%
$ 25.4
-15%
Americas
9.3
-16%
20%
$ 32.0
-23%
EMEA
$ 15.3
-5%
41%
$ 48.3
-14%
Asia Pacific
-57%
-41%
-41%
1.3
isg-one.com
*Contracts
with
$25M
from
ISG Contracts
Knowledgebase
*Contracts
with
ACVTCV
$5M
from the
ISGthe
Contracts
Knowledgebase
8.6
22
www.isg-one.com
Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services company,
serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector
organizations
2016
to transform and optimize their operational environments through research, benchmarking, consulting and managed
Information
Serviceswith a focus on information technology, business process transformation, program management services and enterprise
services,
Group, Inc.
resource
All Rights
Reserved 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 and global leadership in information and advisory services. Based
in Stamford, Conn., the company has more than 900 employees and operates in 21 countries.
isg-one.com